Binance and Alpaca have entered a revenue-sharing agreement regarding the custody of tokenized U.S. stocks and exchange-traded funds [1].
This partnership integrates traditional equity markets with digital asset infrastructure. By sharing revenue from order-flow, Binance aims to strengthen its ability to offer tokenized U.S. equities to its users [1, 2].
Under the terms of the agreement, Binance will receive 50% [1] of the order-flow revenue generated by Alpaca's tokenized U.S. stock and ETF custody services [1, 2]. The deal leverages Alpaca's existing brokerage infrastructure to facilitate the movement of these assets [2].
Tokenized stocks are digital representations of traditional shares on a blockchain. This process allows investors to hold fractional interests in companies, and trade them with the speed and efficiency of cryptocurrency markets [1].
Alpaca provides the underlying custody and brokerage services required to maintain the physical assets that back these tokens [2]. The revenue-sharing model ensures that both the exchange and the custodian benefit from the volume of trades flowing through the system [1, 2].
This collaboration follows a broader trend of financial institutions bridging the gap between legacy finance and decentralized ledger technology. By partnering with a specialized custodian, Binance can expand its product suite without building a full-scale brokerage from the ground up [2].
“Binance will receive 50% of Alpaca's order-flow revenue”
The agreement signals a deeper convergence between traditional equity markets and crypto exchanges. By sharing order-flow revenue, Binance is effectively outsourcing the regulatory and operational burden of stock custody to Alpaca while maintaining a financial stake in the trading volume. This move reflects a strategy to diversify revenue streams beyond cryptocurrency trading fees by tapping into the U.S. equity market through tokenization.
