In a groundbreaking move, eToro has announced plans to tokenize 100 of the most popular US stocks and ETFs as Ethereum ERC-20 tokens, set to launch in August 2025. This initiative promises to revolutionize trading by enabling 24/5 access to tokenized equities, blending traditional finance with blockchain innovation.
What Are Tokenized Stocks on Ethereum?
Tokenized stocks are digital representations of traditional equities issued as ERC-20 tokens on the Ethereum blockchain. Each token is backed 1:1 by physical shares held by eToro, ensuring direct alignment with the underlying asset’s value. This approach offers:
- 24/5 trading outside traditional market hours
- Seamless transfers across blockchain networks
- Potential use as collateral in DeFi applications
Why Is eToro Tokenizing Stocks on Ethereum?
eToro’s CEO Yoni Assia emphasizes this move as part of democratizing finance. By leveraging Ethereum’s global accessibility, the platform aims to:
- Remove geographic and time restrictions
- Enhance liquidity and interoperability
- Bridge traditional and digital finance
The selection focuses on 100 popular NYSE and NASDAQ stocks and ETFs, ensuring broad market relevance while mitigating risks associated with less liquid securities.
How Will Tokenized Stocks Impact Traditional Markets?
This initiative challenges conventional market structures by:
| Aspect | Traditional Market | Tokenized Market |
|---|---|---|
| Trading Hours | Limited to exchange hours | 24/5 availability |
| Settlement | T+2 days | Near-instant |
| Accessibility | Geographic restrictions | Global access |
What Are the Regulatory Considerations?
eToro ensures compliance by maintaining existing ownership structures rather than creating new ones. The tokens simply digitize traditional equities, aligning with SEC guidelines for blockchain-based securities.
The Future of Tokenized Assets
This move signals growing institutional interest in real-world asset tokenization. As more platforms explore this space, the line between traditional and digital finance continues to blur, potentially reshaping global markets.
FAQs
1. When will eToro’s tokenized stocks launch?
The platform plans to launch in August 2025.
2. Which stocks will be tokenized?
eToro will tokenize 100 popular US stocks and ETFs from NYSE and NASDAQ.
3. Can I use tokenized stocks in DeFi?
Yes, the ERC-20 tokens may be used as collateral in compatible DeFi applications.
4. How does this differ from traditional stock ownership?
Ownership remains the same, but trading becomes available 24/5 with blockchain-based transfers.
5. Are tokenized stocks regulated?
Yes, they comply with existing securities regulations through the 1:1 backing structure.
