Binance opened bStocks collateral to all of its margin accounts on September 21, lifting the restriction that reserved it for VIP 3 and above clients. The line has surpassed $30 billion in cumulative volume in less than 90 days. However, the announcement adds a questionnaire and automatic restrictions for ordinary accounts.
In brief
- Binance extends bStocks collateral to cross-margined and portfolio-margined accounts.
- Ordinary accounts and VIPs 1 and 2 pass a suitability questionnaire and are subject to automatic restrictions beyond certain thresholds.
- The monthly volume of tokenized stocks increased from $237 million in January to $7.9 billion in August.
A collateral open to all margin accounts
Binance released an expansion to its margin rules on September 21. bStocks, its line of tokenized securities backed by U.S. stocks and ETFs, now serves as collateral on all cross-margined and portfolio-margined accounts.
The feature was reserved for VIP 3 and above accounts. The expansion weighs on a still young tokenized stock market, where two platforms account for most of the volume.
Leverage can reach 5x to purchase bStocks with borrowed assets, under valuation discounts and collateral ratios. A deposited security can also cover a short position on futures.
For Shunyet Jan, head of exchange and trading at Binance, the user no longer has to treat tokenized stocks and crypto positions as two separate wallets.
Certificates, not shares, and a filter for small accounts
Openness is not unconditional. Ordinary accounts and VIP 1 and 2 must complete a suitability questionnaire before using bStocks as collateral, specifies theofficial announcement from Binance.
Beyond certain risk thresholds, the platform can limit incoming transfers of bStocks, restrict the purchase of illiquid assets, block any new future positions in the portfolio margin and suspend auto top-up. These measures fall as soon as the account falls below the threshold. VIP 3 and above are exempt.
Product qualification deserves attention. The issuer specifies that bStocks are certificates representing certain financial instruments, and not shares: the holder does not own the underlying share. Product is available in ADGM, outside the United States.
A market 33 times more active, but very concentrated
Monthly volume of tokenized stocks increased from $237 million in January to $7.9 billion in August, according to Binance Research. Active capitalization reached approximately $4 billion as of September 9, up 314% since January. The comparison is therefore still on a narrow basis.
The turnover followed, from 0.23 times the average active capitalization in January to 2.14 times in August, after a peak at 3.32 times in July. Two platforms concentrate the activity: bStocks and Robinhood represented 87.8% of the volume of issuers followed in September, compared to 0.8% in June. This concentration is the main point of weakness, while the SEC’s experimental framework does not cover a product issued in the ADGM.
The next test comes down to one number: bStocks and Robinhood’s share of October volume. Above 85%, the opening will have mainly broadened the base of two platforms. If it declines, the market will have gained depth. The dynamics of tokenized assets on the BNB Chain will remain the indicator to follow.
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