Tokenization of Stocks Bridges the Gap between DeFi and the Legacy Financial Sector

Investors can easily trade tokenized stocks. This is because the procedure to buy and sell them is simpler than purchasing the real stocks.

Tokenized stocks

Tokenized stocks are digital coins, or tokens that represent shares in a traditional financial market. This is possible through the use of decentralized blockchain system. In simple terms, tokenized stocks are just like standard shares of a listed company. The only difference is that tokenized stocks are in form of crypto tokens.

Why should an individual interested in tokenized stock?

With the traditional shares, an individual can only buy at least one full share. However, with tokenized stocks, a person can buy a fraction of it. Thus, this opens a greater possibility for many people to take part in stock trading.

Importance of tokenized stocks

Tokenized stocks have positive effects on trading of shares.

Enhanced liquidity: Many people can trade tokenized stocks, thereby increasing the liquidity of the shares.

Near instant transactions: For someone to transfer a stock in the traditional financial market, it takes a long time. However, transferring ownership of tokenized stock is completed within minutes, if not seconds.

Low cost: It is relatively cheaper to buy and own tokenized shares than traditional stocks. This is because some cryptocurrency exchanges such as Binance do not charge trading fees on these.

Trading is open every time: Unlike traditional stock exchanges that close during specific periods, people can buy and sell tokenized stocks any time. The reason is that decentralized exchanges do not have fixed work time.

Disadvantages of tokenized stocks

Ownership of these tokens does not grant investors the same rights and privileges as those who own the real stocks. For example, token holders do not attend annual general meetings. Also, they do not have any voting rights.

Where to buy tokenized stocks?

There are several crypto exchanges where people buy tokenized stocks.

Binance Exchange: Binance has several tokenized stocks. Investors have a wide choice of tokens to choose from. The major advantage of using this exchange is the absence of trading fee for tokenized stocks.

Cryptoworldnews reports that Binance will gradually list tokenized stocks of tech giants: Apple (AAPL), Microsoft (MSFT), and MicroStrategy (MSTR).

Interestingly, real shares of the corresponding companies back these tokens. Therefore, token holders benefit from dividends from these companies. Usually, these stocks pair with BUSB.

Bitpanda Exchange: This is another exchange that lists tokenized stocks, referred to as Bitpanda Stocks.

Mirror Protocol: This exchange has several tokenized stocks known as MAssets.

 Conclusion

It is interesting to note the synergy that currently exists between blockchain system and traditional financial market, regarding stock trading. No wonder why it is not surprising that established crypto exchanges such as Binance are once again taking the lead in revolutionizing the trading sector through tokenized stocks.

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