eToro Explores Launching Own Blockchain Amid Push for Tokenized Stocks

Newly public eToro may launch its own blockchain, says CEO

The online brokerage eToro is exploring whether to spin up its own blockchain, CEO Yoni Assia told Fortune in a Tuesday interview. "We're now evaluating a couple of potential partnerships with both layer 1s and layer 2," he said, referring to two different types of blockchains. "So, we might launch basically a side chain of eToro." The Israeli stock trading company, which recently went public in May on the Nasdaq, is speaking with "four or five" different blockchain ecosystems, he said, declining to specify which ones. He was quick to say that any launch isn't imminent. Still, if eToro decides to put a portion of its operations on crypto rails, a side chain -- crypto industry lingo for a light-weight blockchain built on top of another one -- makes sense, he said. "We can't run today the millions of transactions that we're transacting on a monthly basis on existing blockchains," he said. "We'll need, by definition, to have a dedicated blockchain if we want to run the entire eToro ecosystem." The company's shares were down almost 4% since markets opened Tuesday. Assia's comments came directly after his online brokerage, which lets users trade both stocks and cryptocurrencies, announced Tuesday that it was planning on launching tokenized stocks on the blockchain Ethereum. Tokenization refers to the act of putting stocks in blockchain wrappers, which theoretically lets traders buy and sell the shares more quickly without a middle man. Tokenized stocks on eToro will be tradeable 24 hours a day, five days a week, and will include 100 of the most popular companies and ETFs listed in the U.S., according to the announcement. The online brokerage is first opening up access to the blockchain-based assets to users based only in Europe on a wait-list basis, Assia said. EToro's plans for its own blockchain and tokenized stocks mirror similar moves from its competitor Robinhood. In late June, Robinhood CEO Vlad Tenev said his company was letting customers in the European Union trade tokenized stocks for U.S public companies and ETFs. It also said it planned to launch its own blockchain using technology from the Ethereum layer-2 chain Arbitrum. (Layer 2s are a variant of side chains and are likewise built on top of other blockchains, and offer faster and cheaper transactions.) Both Assia, who's mulled the utility of tokenized stocks for more than a decade, and Tenev argue that tokenization reduces costs for traders and helps markets operate 24 hours a day, seven days a week. Still, critics say that tokenized stocks can be a strategy to circumvent public disclosure requirements for publicly traded companies. As part of its tokenized stock announcement, Robinhood said it would allow traders to buy and sell tokenized shares in OpenAI, the privately owned AI behemoth. After the announcement, OpenAI shot back that it hadn't authorized or endorsed Robinhood's offering. While eToro's tokenized stock offerings currently don't include private companies, Assia said he's looking into it: "That's definitely on the radar. I think we'll see that in the near future."

Post-IPO, eToro Eyes Own Blockchain Amid Tokenized Stocks Push, CEO Yoni Assia Says Talks Underway With Multiple Ecosystems - ARK Fintech Innovation ETF (BATS:ARKF), Etoro Group (NASDAQ:ETOR)

eToro Group Ltd. ETOR is evaluating partnerships to potentially launch its own blockchain network, CEO Yoni Assia said on Tuesday, as the newly public trading platform seeks to handle millions of monthly transactions on crypto rails. The Israeli online brokerage, which went public on Nasdaq in May, is in discussions with "four or five" different blockchain ecosystems about creating a sidechain, Assia told Fortune. He declined to identify the specific partners but emphasized that a launch remains months away. Get StartedTrade Bitcoin, Ethereum, and More Instantly -- No Wallets, No Hassle Speculate on price movements, claim up to $200 in bonuses, and start with risk-free paper trading with crypto futures on Plus500. Get StartedDisclosure: 82% of retail CFD accounts lose moneyThe Need For Own Blockchain "We can't run today the millions of transactions that we're transacting on a monthly basis on existing blockchains," Assia said. "We'll need, by definition, to have a dedicated blockchain if we want to run the entire eToro ecosystem." Why EToro's Blockchain Ambitions Matter Now The blockchain exploration comes as eToro announced Tuesday it will launch tokenized stocks on Ethereum, allowing 24/7 trading of blockchain-wrapped shares from 100 popular U.S. companies and ETFs. European users will gain initial access through a waitlist system. See Also: Bitcoin Trades Flat Ahead Of Fed Interest Rate Decision; Ethereum, Dogecoin Gain: Analyst Says 'Next Impulse' Will Send BTC To $130,000 The move mirrors competitor Robinhood Markets Inc. HOOD, which launched tokenized stock trading in the European Union in June and plans its blockchain using Arbitrum's layer-2 technology. Both CEOs argue that tokenization reduces trading costs and enables round-the-clock market operations. However, tokenized stocks face regulatory scrutiny over potential disclosure requirement circumvention. Robinhood sparked controversy by offering tokenized OpenAI shares without the AI company's authorization. Can Tokenized Stocks Revolutionize Trading? Assia, who has considered tokenized stocks for over a decade, indicated eToro may expand into private company tokenization "in the near future." Cathie Wood's ARK Invest has shown confidence in eToro, with ARK Fintech Innovation ETF ARKF purchasing 35,461 shares in June. Needham analyst John Todaro initiated coverage with a Buy rating and $80 price target, viewing the platform's crypto-traditional finance bridge as strategically positioned for growth. Price Action: eToro Group Ltd closed at $60.71 on Tuesday, down $2.79 or 4.39% for the day. As of the latest data, the stock is down $3.44 or 5.36% from its all-time high, according to data from Benzinga Pro. Read Next: Anthony Scaramucci Thanks 'Crypto Mom' Hester Pierce For 'Hard-Fought Contribution' After SEC Approves In-Kind Redemption For Bitcoin, Ethereum ETFs Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo Courtesy: Grey82 On Shutterstock.com ARKFARK Fintech Innovation ETF$53.540.77%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum93.14Price TrendShortMediumLongOverviewETOREtoro Group Ltd$61.000.48%HOODRobinhood Markets Inc$104.000.66%Market News and Data brought to you by Benzinga APIs