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eToro Explores Blockchain Innovation
In a recent conversation with Fortune, Yoni Assia, the CEO of eToro (ETOR), expressed the company’s growing interest in developing a proprietary blockchain. This initiative arises as eToro, which debuted on the Nasdaq in May, examines potential collaborations with multiple blockchain networks.
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eToro’s Vision for Blockchain Development
Assia revealed that eToro is currently in talks with “four or five” different platforms, though he refrained from naming any specific partners. He pointed out that while the launch of a blockchain isn’t on the immediate horizon, a side chain—a streamlined blockchain that operates on top of another—could potentially support their operational requirements.
Highlighting the constraints of current blockchain systems, Assia remarked, “We are unable to handle the millions of monthly transactions on existing blockchains.” He envisions a specialized blockchain as essential for accommodating eToro’s ecosystem, its growing user base, and significant transaction volumes.
Assia’s remarks align with eToro’s recent announcement about launching tokenized stocks on the Ethereum blockchain. Tokenization involves converting conventional stocks into digital assets, facilitating more efficient trading on the blockchain.
This innovative feature will enable users to trade tokenized stocks around the clock, initially featuring 100 prominent US companies and exchange-traded funds (ETFs). Presently, these blockchain-based assets will be accessible solely to European users through a wait-list system.
ERC20 Tokens for US Stock Trading
According to Bloomberg, eToro plans to introduce tokenized versions of US-listed stocks, offering 24/7 trading opportunities. These assets will be issued as ERC20 tokens on Ethereum, allowing users to seamlessly transfer tokenized shares between eToro digital wallets. Initially, the platform will support 24/5 trading, enhancing asset accessibility for users.
During a recent webinar, Assia expressed enthusiasm, stating, “This marks the dawn of digital assets and tokenized real-world assets.” He emphasized the integration of eToro’s cryptocurrency wallet services with traditional stock trading, aiming to provide customers with a unified experience in handling both digital currencies and traditional equities.
This strategic initiative mirrors a similar move by competitor Robinhood Markets Inc. (HOOD), which revealed plans to deliver tokenized US securities to its European clientele. However, Robinhood faced regulatory scrutiny, particularly concerning a promotional giveaway of OpenAI “tokens,” which were later revealed to be derivative contracts rather than genuine equity.
As indicated by the 1-hour chart, eToro’s stock, ETOR, experienced a 4% decline, closing at $60 per share as of Tuesday’s close. This represents a 24% decrease from its peak value of $79 on June 10.
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