Binance is considering a return to stock trading on its platform, revisiting a product it shut down in 2021 amid mounting regulatory pressure. According to people familiar with the matter, the crypto exchange is exploring the reintroduction of tokenized equities that mirror the performance of U.S.-listed stocks.
If revived, the offering would allow users outside the United States to gain exposure to American shares through blockchain-based tokens rather than direct ownership. The initiative would mark a significant strategic shift for Binance as major crypto platforms seek to expand beyond digital assets into traditional financial markets.
Binance is revisiting tokenized equities
Binance originally suspended its tokenized stock products in 2021 after regulators in several jurisdictions raised concerns about investor protection and licensing requirements. At the time, authorities questioned whether such tokens constituted securities and whether crypto exchanges were authorized to offer them.
Since then, demand for hybrid financial products has grown. Large crypto exchanges increasingly view tokenized equities as a way to bridge traditional markets and digital infrastructure. As previously covered, tokenization allows assets to trade around the clock, settle instantly, and reach investors in regions where access to U.S. markets is limited.
Industry participants say the renewed interest is also driven by regulatory fragmentation. By structuring products that operate outside U.S. jurisdiction, exchanges may offer exposure to American stocks without falling directly under U.S. securities laws. This effectively creates a “parallel stock market” that functions beyond the reach of U.S. regulators.
Implications for markets and regulation
A return of tokenized stocks on Binance would have far-reaching implications for both crypto and equity markets. For investors, such products offer a new way to access U.S. equities using crypto wallets, potentially lowering barriers related to brokerage accounts, trading hours, and cross-border restrictions.
However, regulators are likely to scrutinize the move closely. Tokenized stocks raise unresolved questions around custody, shareholder rights, transparency, and market integrity. Critics argue that replicating equity performance without direct ownership could expose investors to additional risks, particularly during periods of volatility.
For traditional exchanges and brokers, the development could represent growing competition from crypto-native platforms. If tokenized equities gain traction, they may pressure legacy market infrastructure to accelerate modernization efforts, including shorter settlement cycles and broader international access.
Looking ahead, Binance’s decision could signal a broader shift across the industry. As crypto exchanges search for new growth avenues amid tighter oversight of digital assets, tokenized versions of traditional securities may become a central battleground between innovation and regulation.
