Binance’s tokenized stock trading is currently being dominated by emerging markets. According to a recent Binance Research report, 93% of the trading volumes come from emerging markets, flashing similarity to the global stablecoin adoption pattern.
Tokenized stocks and ETFs allow native crypto users to trade U.S equity markets via blockchain rails. While investors’ rights vary based on the issuer of the particular tokenized stock offering, they seem to be closing the gap in participation in the global equity market.
According to the Binance Research report, the U.S equity market is about $80 trillion, and about half of the total global market capitalization. However, 82% of the world’s population lacks access to the largest equity market on earth.
In fact, China and India, which control a third of the current global population, have a less than 20% participation rate.
Binance’s report also found that crypto platforms have eliminated brokerage barriers that had previously limited participation in the U.S equity market.
This draws a striking comparison to stablecoin adoption, which exploded in emerging markets due to demand for the U.S dollar to hedge against local currency devaluations and volatility.
Now, ‘crypto super-apps’ allow users to consolidate their crypto, equities, and cash management in one platform.
This is why Coinbase, Binance, Gemini, Hyperliquid, and others are all racing for the financial ‘super-app’ vision. And, what’s at stake? Well, there is a potential to unlock 300 million new users, with $2T in capital inflows at stake too.
Will crypto super-apps unlock 300M new investors?
Binance Research’s report also claimed that by 2031, crypto platforms will drive the new demand for equity market trading.
Binance Research projects that by 2031, crypto exchanges could collectively funnel US$2T in incremental capital and nearly 300M new users into global equity markets in the base case.
For the bullish case, the report expects the demand to hit $5 trillion or close to 300 million new stock users from emerging markets.
The bumpy path to tokenized stocks adoption
However, the future is not wholly smooth as the report paints it to be.
For starters, tokenized assets perps or RWA (real-world asset) perps have seen more explosive demand than spot products. This means users taking RWA perpetual positions can be swiftly liquidated and must contend with volatility.
Besides, not all tokenized stocks are equal. As such, there are some offerings that holders may not get the dividends that traditional investors enjoy.
Finally, there is an ongoing crackdown on crypto exchange capital flows, especially across Africa. In short, some users could have their entire equity investments and cash flows locked up by governments.
Overall, the trend of tokenized stocks and ETFs will help bridge the gap in global equity market participation. Unfortunately, there will likely be some unintended consequences for some users too.
Final Summary
- Emerging markets control 93% of Binance stock trading, and the trend could attract 300M new users.
- However, there are ongoing crackdowns on crypto exchange flows across some emerging markets that could derail full adoption.
