Crypto Exchanges Pivot to Traditional Finance with Stock Trading Services

The biggest crypto exchanges are expanding into traditional finance (TradFi) by offering stock trading services. Binance, the largest exchange by volume, has been at the forefront of this shift. Since June 1st, users have been able to buy stocks such as Apple and Alphabet directly through the Binance app.

Binance's interest in stock markets dates back to 2021 when it launched tokenized stock trading covering Tesla, Apple, and Microsoft. However, due to regulatory pressure, the service was shut down entirely by July of the same year.

This time around, Binance has taken a different approach. It has routed order execution through a broker-dealer licensed by the Abu Dhabi Global Market (ADGM), giving the service a clear legal classification as brokerage. The exchange does not hold securities directly, which keeps it outside the scope of direct securities regulation.

The expansion into TradFi is driven by several factors. Falling crypto trading volume has put pressure on exchanges to diversify their offerings. Additionally, the rise of perpetual futures DEXs led by Hyperliquid has drawn on-chain liquidity away from traditional exchanges. Lastly, a more permissive regulatory environment following the Trump administration has emboldened exchanges to pursue conventional financial products.

Binance's strategy is to become an 'everything store,' keeping all trading activity within its own platform and preventing users from leaving. Bybit, another major exchange, has also taken a two-track approach by porting centralized exchange liquidity onto the blockchain and listing conventional asset derivatives directly on the centralized exchange.