Crypto exchange Binance has rolled out new features for its application programming interface (API), signaling that the platform may soon offer stock trading capabilities.
According to Binance’s changelog, the exchange introduced three new API endpoints on Thursday, including one that utilizes a URL with stock/contract — enabling users to “sign [a] TradFi-Perps agreement contract.” The other two endpoints allow users to check “trading session schedules for a one-week period” and “current trading session information.”
This development suggests that Binance is gearing up to launch perpetual futures trading on its platform. The current trading schedule endpoints imply that trading may take place in sessions akin to traditional finance, as opposed to the continuous nature of cryptocurrency trading.
This follows Binance’s introduction of tokenized stocks in 2021, which was a brief initiative. Shortly after the announcement in late April, sales of tokenized stocks were halted by mid-July 2021 due to regulatory scrutiny.
Binance has acknowledged Cointelegraph’s request for comment but had not responded by the time of publication.
Related: Ondo wins Liechtenstein approval to offer tokenized stocks in Europe
Tokenized stocks are trending
Binance’s move aligns with various efforts by both traditional and crypto finance players, bringing stock tokenization into the mainstream. Recent reports suggest that major US-based crypto exchange Coinbase is set to launch its own tokenized stocks and prediction markets soon.
However, the rollout of stock tokenization has not garnered unanimous support. Market maker Citadel Securities stirred controversy earlier this month by urging the US Securities and Exchange Commission to enforce stricter regulations on tokenized stock trading on decentralized finance (DeFi) platforms.
Citadel argued that DeFi developers, smart-contract coders, and self-custody wallet providers should not receive “broad exemptive relief” for trading tokenized US equities. The firm claimed that these platforms likely meet the definitions of an “exchange” or “broker-dealer” and should be governed by securities law.
It further contended that allowing such platforms to operate without regulation “would create two separate regulatory regimes for the trading of the same security.” Additionally, the World Federation of Exchanges (WFE) expressed concerns in late November regarding the SEC providing broad regulatory concessions to companies launching tokenized stock offerings.
The WFE acknowledged that tokenization “is likely a natural evolution in capital markets” and that it is “pro-innovation.” However, it emphasized that this must be achieved responsibly, safeguarding investors and market integrity.
These comments come as tokenized stocks have begun to appear not only on centralized crypto exchanges but also within the DeFi ecosystem. By the end of June, over 60 tokenized stocks had been launched on Solana-based DeFi platforms as well as through crypto exchanges Kraken and Bybit.
Related: Robinhood tokenizes nearly 500 US stocks, ETFs on Arbitrum for EU users
Traditional finance shows mixed reactions
Some traditional finance players seem to adopt a “if you can’t beat them, join them” mentality regarding the situation.
Last month, Nasdaq’s head of digital assets strategy, Matt Savarese, stated that getting SEC approval for offering tokenized versions of stocks listed on its exchange is a top priority.
The urgency has increased after reports indicated that the SEC is preparing to allow blockchain-based stock trading on cryptocurrency exchanges by the end of September.
SEC Chair Paul Atkins recently referred to tokenization as an “innovation” that should be encouraged, not stifled. The SEC also issued a “no-action” letter to a subsidiary of the Depository Trust and Clearing Corporation specializing in tokenizing securities, suggesting that the regulator is open to allowing the company to provide a new securities market tokenization service.
