eToro CEO Hints At Launching Own Blockchain Following Public Debut

In a recent interview with Fortune, eToro (ETOR) CEO Yoni Assia shared the company’s interest in potentially developing its own blockchain. This exploration comes as the online brokerage, which went public on the Nasdaq in May, evaluates partnerships with various blockchain ecosystems. 

eToro Reveals Plans For Potential Blockchain Development

Assia mentioned that eToro is in discussions with “four or five” different platforms, although he did not disclose specific names. He emphasized that any blockchain launch is not immediate, but indicated that a side chain—essentially a lightweight blockchain built atop another—might be a viable solution for their operations.

Assia highlighted the limitations of existing blockchains, stating, “We can’t run today the millions of transactions that we’re transacting on a monthly basis on existing blockchains.” 

The executive believes that a dedicated blockchain is necessary to support the entire eToro ecosystem and accommodate its user base and transaction volume.

The timing of Assia’s comments coincided with eToro’s announcement of its plans to introduce tokenized stocks on the Ethereum blockchain. Tokenization refers to the process of converting traditional stocks into digital assets that can be traded more efficiently on the blockchain. 

This new feature will allow users to trade tokenized stocks 24/7, with an initial offering of 100 popular US companies and exchange-traded funds (ETFs). Currently, access to these blockchain-based assets will be available only to European users on a wait-list basis.

ERC20 Tokenized Shares For US Companies

Bloomberg further reported that eToro aims to launch tokenized versions of US-listed stocks, enabling round-the-clock trading. The assets will be issued as ERC20 tokens on Ethereum, allowing users to transfer tokenized shares between eToro digital wallets. The platform will initially support 24/5 trading, expanding the accessibility of these assets for users.

“This is really the beginning of digital assets and tokenized real-world assets,” Assia stated during a recent webinar. He expressed enthusiasm about merging eToro’s crypto wallet services with the stock trading environment, creating a seamless experience for customers who deal in both cryptocurrencies and traditional equities.

This strategic move follows a similar initiative by competitor Robinhood Markets Inc. (HOOD), which announced plans to offer tokenized US securities to its European customers. 

However, Robinhood’s announcement faced skepticism from regulators, particularly due to its association with a promotional giveaway of OpenAI “tokens” that were later clarified as derivative contracts rather than actual equity.

As of Tuesday’s close, eToro’s stock, ETOR, had dropped 4%, closing at $60 per share. This decline represents a %24 gap from its record peak of $79 reached on June 10.

Featured image from DALL-E, chart from TradingView.com