eToro Developing Blockchain to Scale Tokenized Asset Transactions as Offerings Expand

eToro Group Ltd. (NASDAQ:ETOR), the Israeli online brokerage that recently went public on Nasdaq in May, is advancing plans to develop its own blockchain network to scale transaction capacity for tokenized assets. CEO Yoni Assia confirmed in multiple interviews that the firm is in discussions with “four or five” blockchain ecosystems to create a sidechain, though he declined to name partners or specify a timeline beyond noting a potential launch is “months away” [1]. The initiative aims to address limitations in handling its growing volume of monthly transactions on existing crypto rails, as the platform prepares to expand its tokenized stock offerings and fractional ownership features [2].

The move aligns with eToro’s broader strategy to position itself at the forefront of tokenized finance. The platform recently announced it will launch tokenized stocks on Ethereum, enabling 24/7 trading of blockchain-wrapped shares from 100 U.S. companies and ETFs. European users will initially access the feature through a waitlist system [3]. This follows a trend among fintech competitors like Robinhood Markets Inc., which introduced tokenized stock trading in the EU in June and plans to leverage Arbitrum’s layer-2 technology for its blockchain [4].

Assia emphasized the necessity of a dedicated blockchain to support “millions of transactions” as the firm’s user base and product offerings grow. By building a sidechain, eToro could reduce reliance on existing networks, lower costs, and streamline cross-border transactions. The infrastructure would likely operate in parallel with the company’s current services, facilitating integration with its social trading and copy-trading models [5]. The CEO also hinted at potential expansion into tokenizing private company shares “in the near future,” further signaling eToro’s commitment to innovation in the asset tokenization space [6].

The project faces challenges, including regulatory scrutiny of tokenized stocks. Critics have raised concerns about potential circumvention of disclosure requirements, as seen in Robinhood’s controversial offering of tokenized OpenAI shares without the company’s authorization [7]. eToro’s approach, however, appears to prioritize compliance, with the platform’s tokenized stock launch framed as a strategic move to reduce trading costs and enable round-the-clock operations [8].

Analysts have responded with cautious optimism. Needham analyst John Todaro initiated coverage with a Buy rating and $80 price target, citing eToro’s unique position as a bridge between crypto and traditional finance [9]. Meanwhile, Cathie Wood’s ARK Invest has shown confidence in the firm, with the ARK Fintech Innovation ETF purchasing 35,461 shares in June [10]. However, the stock has faced recent volatility, closing at $60.71 on Tuesday—a 4.39% drop for the day—after hitting an all-time high [11].

eToro’s blockchain ambitions reflect a broader industry shift toward infrastructure development rather than incremental product updates. By leveraging its public company status and market capitalization, the firm aims to attract partners with expertise in layer-2 solutions or cross-chain protocols. The undisclosed ecosystems under evaluation may include established blockchain networks or emerging projects with experience in high-volume transaction processing [12].

The CEO’s focus on vertical integration underscores eToro’s vision for democratizing access to global markets. Tokenized stocks and fractional shares have already drawn millions of new investors to the platform, and a custom blockchain could further reduce friction for retail traders. While technical and regulatory hurdles remain, the initiative highlights the company’s long-term strategy to redefine financial infrastructure in the digital age [13].

Sources:

[1]https://news.futunn.com/en/post/59821194/post-ipo-etoro-eyes-own-blockchain-amid-tokenized-stocks-push

[2]https://www.coinlive.com/en/news-flash/863030

[3]https://www.marketbeat.com/stocks/NYSE/POST/news/

[4]https://www.inkl.com/topics/crypto-news_topic

[11]https://www.benzinga.com/markets/equities/25/07/46714215/post-ipo-etoro-eyes-own-blockchain-amid-tokenized-stocks-push-ceo-yoni-assia-says-talks-underway-with-multiple-ecosystems?utm_source=coingecko&utm_campaign=partner_feed&utm_medium=partner_feed&utm_content=site