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Ondo Finance’s tokenized stock platform receives regulatory clearance in Abu Dhabi from Binance.
The regulatory approval will enable financial institutions in the UAE to engage in tokenized equities on Binance’s regulated trading platform.
Abu Dhabi skyline (Shutterstock, modified by CoinDesk)
Key points to note:
- The regulator of the Abu Dhabi Global Market has authorized the trading of Ondo Finance’s tokenized stocks and ETFs on Binance’s regulated trading venue.
- This marks the initial instance of the ADGM sanctioning the trading of tokenized securities within its regulatory framework, enabling institutions to trade in digital equities.
- Ondo, which organizes its offerings as equity-linked notes and has facilitated over $11 billion in trading volume, is part of a larger initiative to transition traditional equities to blockchain technology, a market currently valued at more than $1 billion.
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Binance’s renewed focus on tokenized stocks received regulatory support on Tuesday as the Abu Dhabi Global Market (ADGM) approved the trading of Ondo Finance’s tokenized equities on the exchange’s regulated platform.
The Financial Services Regulatory Authority of ADGM authorized Ondo Global Markets’ tokenized stocks and ETFs for trading on Binance’s FSRA-regulated Multilateral Trading Facility, as detailed in a press release provided to CoinDesk. The listing features tokenized versions of Amazon, Alphabet, Apple, Circle, Meta, Microsoft, Nvidia, Tesla, and the Invesco QQQ ETF. These products are accessible to non-U.S. users.
This is the first occasion where the ADGM has approved the trading of tokenized securities under its regulatory framework, allowing financial institutions, intermediaries, and counterparties based in the UAE to engage in tokenized equity trading, as stated by Ondo.
The approval grants Binance a regulated platform for trading tokenized equities, nearly five years following the discontinuation of a similar service due to scrutiny from regulators in the U.K. and Germany. This development follows Binance listing Ondo’s tokenized equities on its Alpha platform, which is tailored to riskier, early-stage projects.
Tokenized stocks have attracted attention from cryptocurrency exchanges like Kraken, brokerages such as Robinhood, and traditional market players including Nasdaq and the New York Stock Exchange. The overall market value has exceeded $1 billion, as indicated by RWA.xyz data.
Proponents argue that placing equities on blockchain infrastructure can enhance investor access and facilitate the movement of assets across trading and lending platforms, effectively linking stock markets with decentralized finance.
Ondo organizes its offerings as equity-linked notes associated with the underlying shares. The company reports having processed over $11 billion in cumulative trading volume, with more than $600 million in total value locked since the inception of its offerings less than six months ago.
Last year, Ondo obtained approval for its base securities prospectus in the European Union, which permits public distribution across the EU.
