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How To Invest In The Stock Market Without Geographical Constraints: Tokenized Stocks
The world is currently undergoing a digital transformation, in every aspect of our daily lives and most especially in the industries that revolve around our lives. As is the case with the financial sector there have been leaps of improvement in how technology can improve in our daily lives yet so little adoption from the “main players” in the financial sector, and more than ever is beginning to fall short of the expectations and needs of the public. Stock market is one of these financial services with many shortcomings like geographical constraints, minimum investment requirements, extra fees, extra steps, memberships and needed qualifications on different platforms etc.. Stock market has not yet been a widely used, easy to use investment option for the average person. It was not a no-minimum, one-click, internationally available, do it digitally through your bank type of easy investment. Until now…
As we discussed in an earlier article on DeFi, decentralized finance makes financial services accessible and more affordable for the masses. One key feature is accessibility to invest in the stock market via Tokenized Stocks.
What are tokenized stocks?
To understand the basic concept of what a tokenized stock is, we have to recall that another blockchain born product is stable coin. If you recall from previous articles, a stable coin is a type of cryptocurrency that has its value pegged to a real world asset like a fiat currency, mirroring the pegged asset 1-to-1. That is the same underlying concept of a tokenized stock. We can define it as a stock that has been digitized to be able to be moved, traded and stored on the blockchain, while mirroring its real world parent.
When you buy a tokenized stock, you are not buying the original stock of that certain company but it gives you the same opportunity to experience the very same financial returns. You can trade tokenized stocks by removing the middleman (brokers) between your money and the profits you make.
What benefits do tokenized stocks provide that traditional stocks couldn’t?
Better Geographical Accessibility
One of the many benefits of tokenized stocks is its accessibility. Since these assets are tokenized on the blockchain they are visible and purchasable by anyone with a phone or computer on the blockchain network from anywhere in the world. Kash’s availability to a worldwide user base also permits users from anywhere on the globe to purchase these assets with one click, through the Kash app. Due to traditional investment houses making it strenuous for retail investors to buy a stock due to paper hurdles, geographic location restrictions and a minimum cost to participate in the global stock market, this type of opportunity was not always presented to all.
In fact, after tokenized stocks, we can only now see how bad things were in the traditional investing method. For instance, imagine Ali (who lives in Turkey) wants to invest in foreign stocks by using a locally available FinTech company. Ali has to invest at least $1000 for a single stock -because it is the minimum amount he has to invest, and has to pay a $25 fee for each transaction (buying and selling). Also, the FinTech company Ali uses, asks him to pay $5 per month to hold the stock he invested because the FinTech company keeps the stocks in a bank, in Denmark.. You already got the idea, right? It should not be that hard to reach financial services in this day and age but unfortunately for some people it still is hard in today’s financial ecosystem.
However, by using the KASH app that is powered by Mirror Protocol, Ali can buy the foreign stocks as tokenized stocks in his country. Ali doesn’t have to have a minimum amount for investing; he only needs a couple dollars to cover the transaction fee and can buy as much as he wants.
Fractional Ownership
Don’t have enough money to buy a whole stock? No worries. Kash allows users to own fractional shares of an asset. For example, as of the time of writing this article, one share of Amazon (AMZN) costs $3494.21 or 3494.21UST (UST is a stable coin pegged to the value of USD). In most traditional investment houses an investor will be required to have enough money to buy 1 share or a higher amount to buy a set quota of share but not everyone has 3 grand sleeping in an account. If all an investor’s got is $50 or 50UST to invest in Amazon, Kash allows that investor to purchase fractional shares of mAmazon (tokenized Amazon share) at $50/50UST.
Thanks to the tokenized stocks, people can trade without any minimum balance, also without any regulation and paper work as well as without any broker and high commissions. Therefore, it gives everyone a chance to benefit from such advantages of finance equally.
Below we show you how to use the KASH investing account, and how you can easily access the tokenized foreign stocks with an easy-to-use interface.
Always Open for Business
The stock market opens between 9:30 and 17:00 in most markets. Most of the majorly traded stocks are listed on the New York Stock Exchange which is also in a different time zone from the rest of the world. Time is of the essence in the financial market and when major stock markets like the New York Stock Exchange closes for the day, not much can be done for investors who might live in a different time zone.
However, tokenized stocks are not limited by time constraints for trading, since they are decentralized and on the blockchain they can be traded 24/7. This gives traders in all the different time zones the chance to trade from anywhere in the world at their own time even when the traditional market is closed whether it’s for public holidays or in the wake of a major political event.
Wide Open Space
Tokenization comes with many added benefits. Like stocks, other assets can also be tokenized. On the Kash platform you can also trade with tokenized commodities and Exchange Traded Funds (ETFs).
Commodities are tradable assets such as raw materials and agricultural products like gold, beef and oil. ETFs are indexes of a certain market and people instead of choosing trading a single stock, they can invest in the whole market via ETFs.
For instance, by using KASH, instead of investing single stocks and diversifying your portfolio, you can invest in an S&P 500 ETF which gives you a chance to invest in 500 American companies. Therefore, you can speculate on the success of 500 companies instead of a single company. ETFs help investors to lower their investment risks.
No Lending
As tokenized stocks are available through decentralized platforms, this means you can have the same financial gains while still keeping your money in your wallet in stable coins like UST. Mirror Protocol makes this possible by mirroring the stock prices as mentioned above.
Click here to create your Kash neo-bank account by using your Gmail, Discord, Twitch or Facebook in seconds. Start enjoying the benefits of DeFi and trade tokenized stocks 24/7!
Disclaimer: Please note that tokenized assets do not give dividends as they do not confer the rights of the underlying real-world asset.
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