Gemini has launched tokenized stocks for its European Union customers, starting with MicroStrategy (MSTR), the company led by Michael Saylor known for its significant Bitcoin holdings. This move allows EU investors to purchase tokenized shares of MSTR and move them on-chain.

Tokenized Stocks: Bridging Traditional Finance and Crypto

Tokenized stocks represent a fraction of a traditional stock, in this case, MSTR, on a blockchain. Each token represents a share of the underlying asset, and is backed 1:1 by corresponding U.S. equities. This allows investors to gain exposure to U.S. equities without needing to purchase a full share, lowering the barrier to entry. This fractional ownership is particularly appealing to investors who may not have the capital to invest in whole shares.

The launch of tokenized stocks aims to combine the best aspects of traditional assets with the benefits of cryptocurrency, such as 24/7 trading and faster settlement times. Gemini's initiative provides greater access, reduced restrictions, and faster transactions in a globalized financial landscape.

Partnership with Dinari

To facilitate this offering, Gemini has partnered with Dinari, a leading provider of tokenized U.S. public securities. Dinari's platform enables Gemini users to trade fully backed MicroStrategy (MSTR) dShares alongside crypto. Dinari utilizes a "tokenization-on-demand" model to offer greater liquidity and transparency. Dinari recently obtained a broker-dealer registration from the Financial Industry Regulatory Authority (FINRA), enabling it to offer tokenized versions of U.S. stocks.

Benefits for EU Investors

The launch of tokenized MSTR shares offers several benefits for EU investors:

• Expanded Access to U.S. Markets: Non-U.S. investors often face challenges such as currency fluctuations and high transaction fees when buying and selling U.S. equities. Tokenized stocks reduce these frictions, providing easier access to the U.S. market.
• Fractional Ownership: Tokenized stocks enable investors to buy fractions of U.S. equities, eliminating the need to purchase a full share.
• On-Chain Investing: Investors can conduct their financial activities almost entirely on-chain, buying and selling tokenized stocks without delay. This eliminates the need to move assets between different platforms.
• Transparency and Liquidity: Dinari's tokenization-on-demand model offers customers traditional-market liquidity and transparent pricing, while Gemini's infrastructure offers seamless DeFi interoperability while maintaining a focus on compliance.

Future Expansion

Currently, the tokenized MSTR shares are available on the Arbitrum network, with plans to support additional networks in the future. While the initial launch focuses on European customers, Gemini intends to expand the offering to other regions, including the United States, in the coming months. Gemini plans to roll out more tokenized stocks and ETFs in the coming days.

MicroStrategy's Bitcoin Strategy

MicroStrategy, under Michael Saylor's leadership, has gained recognition for its substantial investments in Bitcoin. As of now, Strategy holds 592,345 Bitcoins. The company's Bitcoin holdings have significantly impacted its financial performance, with substantial unrealized profits. The company's stock ($MSTR) is trading at $393.24 with a market cap of approximately $107.51 billion, reflecting investor confidence in the company's Bitcoin-focused strategy.

Wider Adoption of Tokenized Assets

Gemini's move into tokenized stocks reflects a growing trend in the crypto industry, with other major players like Coinbase and Kraken also exploring tokenization. Robinhood is also reportedly working on offering tokenized U.S. stocks for EU users. This increasing interest suggests a broader shift towards integrating traditional financial assets with blockchain technology.