Equity Tokenisation: A Novel Way to Buy Stocks

It is now possible to trade stocks like Tesla on a cryptocurrency exchange. Traditional finance needs a response, while the retail investors this is aimed at have to decide whether this is a new era or just a flash in the pan.

As of early this year (2026), Binance announced the ability to buy and sell digital “tokens” representing Tesla shares via its crypto asset exchange platform. These tokens allow investors to trade fractions (up to 1/100) of Tesla stock and receive most of the benefits reserved for shareholders, namely dividends and transferability. However, the tokens do not carry voting rights at general meetings. Tesla Tokens are currently quoted in Binance USD (BUSD), a “stablecoin” that is pegged to the US dollar. Note that it is a Swiss company, Digital Assets AG, that has facilitated the development of these digitised shares.

Binance is not the first platform to tokenise stocks. Many equity tokens were already available from Bittrex and FTX. What does this all mean for the casual investor? And what are the future prospects for this type of securitisation?

Tokenisation and blockchain

Binance is a platform that allows an investor to store, buy, resell and exchange cryptocurrencies for other cryptocurrencies, as well as supporting transactions in euros or U.S. dollars. It currently provides access to more than 340 kinds of digital tokens and more than 1,100 currency pairs (comprising both those between different cryptos and cryptos/fiat). Binance is now expanding its offer to other types of tokens by using blockchain technology to tokenise securities.

As a reminder, tokenisation of an asset involves converting the rights attached to it into a digital token. The process is very similar to securitisation, except that tokenisation uses a blockchain in addition to the normal legal process.

The advantages of blockchain for capital markets

Blockchain has major advantages over conventional practices and technologies. It offers greater transparency to all parties because they each have access to the same documents. This technology offers enhanced security through safer record-keeping than what is possible using traditional means. Another advantage is better traceability, since every transaction is recorded and stored simultaneously (though not instantaneously) on the blockchain. The blockchain is shared among all users instead of being hosted on one central computer.

This leads us to the other advantages of blockchain, namely flexibility, efficiency, and speed. In principle at least, it can largely eliminate paper processes and the associated risk of human error. Finally, it reduces costs by streamlining workflows and reducing the number of intermediaries.

Blockchain applied to financial markets

While the benefits of blockchain may seem somewhat abstract at first glance, they make perfect sense in the context of capital markets.

In practice, the whole thing is simple: a financial body buys the stock, holds it and issues a digital token that represents the security. The token can change hands an infinite number of times. Ultimately, it can be redeemed in shares at the request of the holder.

The digitisation of shares offers the following advantages:

Improved liquidity and 24/7 trading. This is the biorhythm that many traders have already become accustomed to since the advent of cryptocurrencies. Understand, however, that 24/7 trading in share tokens is not yet available on Binance (they are aligned with Nasdaq’s trading hours). However, FTX does offer 24/7 in Tesla and other stocks.
Fractionalization. The fact that shares can easily be split allows a larger community of investors to access the markets. Of course, this technology is already available through online banks and brokerages. However, tokenisation will further expand the spectrum of opportunities. In theory, anyone with an internet connection can access a large number of markets, no matter where they are, at very low cost, even if they can’t afford a whole share.
Lower costs due to strong disintermediation. In theory, there is no need to conduct transactions through a bank or a broker, since the buyer and the seller can interact directly, from “wallet” to “wallet”.
Ultra-fast transfers. The use of blockchain reduces or even eliminates the number of intermediaries. With digital shares, the transfer is done in a few clicks, and shares are transferable 24/7 with almost instantaneous settlement.
Automated share register. This allows you to view your shareholding at any time.
Simplified and accelerated securities transactions. For example, splits, capital increases or dividend payments can be executed through software alone.
A significant reduction in market manipulation. Because each transaction is recorded in real time and is transparent and accessible at all times to all stakeholders, regulators and other parties are never in the dark.

The wave of the future?

The arrival of tokenised assets could mark the beginning of a process similar to that of the creation of joint stock companies and the opening of the first stock exchange in the 17th century. The major hurdles are not technical but rather regulatory and, of course, in the form of public acceptance.

Indeed, the process described above can potentially be applied to other liquid assets such as bonds. While it is complicated to build a bond portfolio because of the minimum size per transaction, tokenisation (and thus fractionalization) of bonds will allow investors to build a diversified portfolio with a low initial investment. The same goes for leveraged loans, which have until now been reserved for institutional clients.

Tokenisation also applies to illiquid assets, such as venture capital, private debt, real estate, works of art or collectable cars. Incidentally, it is already possible to buy “pre-IPO” securities on the crypto asset trading platform FTX. Many users, for example, used this platform to buy derivatives on Coinbase tokenised stocks before its IPO.

Crypto specialists vs traditional finance

Any development of this scope and magnitude inevitably calls for a general reflection on the future of the financial industry.

Indeed, the contest between crypto asset specialists and traditional players is becoming clearer and more pointed. As we have seen, crypto specialists such as Binance, Coinbase and FTX now have the opportunity to compete with banks and brokers on their own ground, i.e. the capital markets. In the case of Binance, a client wishing to reduce their cryptocurrency exposure can easily switch some of their profits to equity tokens or even other underlying securities. This can only be expected to result in a head-on collision with traditional players.

Banks are gradually opening up to cryptocurrencies. Of course, there are still some naysayers, such as the major British bank that excluded Microstrategy stock from its activities due to a high share of bitcoins in the company’s balance sheet. At the same time, though, many banks have chosen to make bitcoin futures available on their platforms as well as ETFs that use cryptocurrencies as their underlying assets.

Others are going even further by creating partnerships with crypto banks to allow their clients to trade cryptocurrencies. Finally, the most reckless or forward-thinking have decided to make a long-term bet on cryptocurrencies and tokenisation by investing in the infrastructure necessary for the storage, trading and creation of crypto assets. These visionary banks have understood the very strong potential blockchain holds for the finance industry. In part, this is motivated by giving access to a wider universe of investment possibilities to customers (whether in terms of the underlying and instruments) and improving the user experience.

These initiatives also demonstrate that banks have now grasped the degree of urgency involved: if they are not able to offer their customers these new opportunities, new entrants such as Coinbase and Binance will be the ones to take advantage of the cryptocurrency boom and take market share even in traditional trading activities.

In conclusion

The possibilities of trading digitised stocks on crypto asset trading platforms are certainly exciting. The financial industry has always been a curious mixture of the conservative and the innovative; hopefully, private investors will be able to reap the best benefits of both worlds once things settle down into a new normal.