Author: Jeff John Roberts, Fortune

Translation: Yulia, PANews

Binance announced on Monday that its users would be able to trade over 7,000 U.S. stocks and ETFs. Moreover, they also announced an upcoming plan that allows customers to convert their held stocks into digital assets similar to cryptocurrencies, which is part of their ambitious goal to become a "multi-asset financial super app."

In an interview with Fortune magazine, Binance co-CEO Richard Teng pointed out that U.S. stocks account for more than half of the global stock market, but for many overseas markets, purchasing U.S. stocks is not only expensive in terms of fees but also particularly cumbersome in process. To address this pain point, Teng stated that Binance is trying to offer zero-commission stock trading and fractional shares starting at $5 to non-U.S. customers.

So how do you buy stocks on Binance? Specifically, trading operations will be handled by a brokerage called Nest Trading, while the custody of stocks, dividend distribution, and handling of corporate affairs will be managed by Alpaca in New York. The most convenient aspect is that users can directly buy stocks using stablecoins like USDC or USDT, or several types of digital currencies, including Binance's own BNB.

Teng also specifically mentioned that this is not Binance's first foray into the non-crypto asset space; Binance has long launched a series of derivatives allowing users to invest in gold, petrochemicals, and even shares of companies that are not yet listed.

On a larger scale, Binance's entry into the stock market once again proves that the crypto space and traditional finance are increasingly converging. This trend is recently exemplified by Binance's competitor Coinbase adding stock trading features in an attempt to become a "universal exchange"; meanwhile, traditional Wall Street companies like BlackRock are also beginning to package traditional investment products such as treasury bonds into blockchain assets for sale.

Binance's Ambitious Plan for Tokenized Stocks

When announcing its stock trading project, Binance also threw out a bold plan called "bStocks," which would allow users to tokenize the stocks they purchase. Teng explained that in practical terms, this means that customers will soon be able to create synthetic versions of these stocks by converting certain stocks into digital tokens on Binance's own BNB chain.

In fact, companies like Kraken and Robinhood have offered similar services over the past year. However, Binance claims that their version (expected to launch in the coming weeks) might be different, with the biggest highlight being that they promise to allow customers to carry out the stock tokenization process themselves.

At first glance, the idea of tokenizing stocks may seem novel or unnecessary. However, compared to traditional ways of trading stocks, this approach offers numerous advantages. The biggest advantage is "speed": blockchain-based stock trading can settle almost instantly; while traditional Wall Street intermediary processes often take a day or even longer to fully finalize a trade.

Although there are concerns that tokenizing stocks may bring risks or uncertainties to the critically important U.S. stock market, this concept is quickly gaining attention, with even the New York Stock Exchange and Nasdaq announcing plans to introduce this technology.

In an official statement, Binance said that their bStocks product is like a bridge, "capable of transforming traditional ownership of stocks into programmable, 24/7 tradable tokenized assets globally... This not only allows real-world stocks to flow within and outside the Binance ecosystem, becoming more useful, but also enables users to operate on-chain at any time, and even play around with various DeFi novelties such as lending and providing liquidity."

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