(Seoul = News 1) Blockchain reporter Park Hyun-young = Overseas virtual asset exchanges that support 24-hour trading by issuing stocks such as NVIDIA and Tesla as tokens on the blockchain are increasing.
Virtual asset exchanges appear to be seeking expansion into ‘financial super apps’ by supporting stock trading.
According to related industries on the 1st, Binance, the world’s largest virtual asset exchange, recently signed an agreement with Ondo Finance and decided to support ‘tokenized stock’ (stock token) trading. It has been five years since stock token trading was suspended due to regulatory risks.
On the 26th of last month, Binance listed a product implementing US stocks and exchange traded funds (ETFs) in the form of blockchain-based tokens on the ‘Binance Alpha’ platform. Specifically, Apple, Google, Tesla, Nvidia ‘stock tokens’, and QQQ token, which is a tokenization of QQQ, Invesco’s Nasdaq tracking ETF, were included in the listing list.
Previously, Binance supported trading by tokenizing stocks such as Tesla, Coinbase, Microsoft, and Apple in 2021. However, the service had to be discontinued due to regulatory pressure from British and German financial authorities at the time.
Afterwards, Binance announced that it would re-enter the stock token market in January and put it into action. Regulatory risks were also avoided by allowing trading only for users outside the U.S. and listing tokens issued by a third party (Ondo Finance) instead of directly issuing stock tokens.
Binance’s resumption of support for stock token trading was largely due to the recent entry of all major overseas exchanges into related markets.
Stock tokens are stocks such as Apple, Tesla, and NVIDIA issued as tokens on the blockchain, and unlike the stock market, they can be traded 24 hours a day. There is also the advantage of being able to do ‘split trading’ rather than buying in units of one week.
Additionally, individual investors in emerging countries with low access to U.S. stocks can also make indirect investments through stock token sales. It can also be used as loan collateral in the DeFi (decentralized finance) market. This means that it is possible to make a transaction by depositing NVIDIA stocks as collateral and borrowing stablecoins.
Thanks to these advantages, since last year, large overseas exchanges such as Kraken, Bybit, and Gemini have started providing stock token trading services for users outside the United States. The New York Stock Exchange (NYSE) and Nasdaq have also announced plans to introduce stock token trading.
In particular, Kraken, which acquired stock token issuer Backed Finance, recently took a step further.
On the 24th of last month, Kraken announced that it would launch stock token-based perpetual futures without an expiration date for qualified investors outside the United States. Accordingly, investors can perform leveraged trading on individual stocks such as Nvidia, Apple, and Tesla 24 hours a day.
This trend of overseas virtual asset exchanges is expected to continue in the future. This is because stock token support is effective in making the leap into a ‘financial super app’ that can trade not only virtual assets but also stocks and ETFs. Since it supports blockchain-based token trading, it can expand investors’ options without losing its identity as a virtual asset exchange.
For example, Coinbase, the largest virtual asset exchange in the U.S., also announced that it would support stock token trading.
Coinbase CEO Brian Armstrong revealed this fact through X (formerly Twitter) and said, “Coinbase is growing into an ‘Everything Exchange’.”
hyun1@news1.kr
