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- eToro will tokenize U.S.-listed stocks using Ethereum blockchain technology.
- The plan aims to expand access to equity trading and link stocks with decentralized finance (DeFi).
- Other firms like Robinhood and major crypto exchanges have already launched similar services.
eToro, a global trading platform, is moving traditional stocks onto the blockchain. The firm announced its plan to tokenize U.S.-listed equities using the Ethereum network. This decision puts eToro in line with a broader trend. Other platforms are already offering tokenized stock options.
These digital tokens will follow the ERC-20 standard. The token will represent a real share held by eToro. The tokens will later be exchanged back into normal shares. Traders are therefore able to use stocks in blockchain-based systems. It also allows them to trade outside of normal trading sessions.
EToro Merges Stock Trading With Ethereum DeFi
The plan is to integrate conventional finance with the world of decentralized finance, or DeFi. Tokenized assets would be able to engage with the DeFi protocols such as lending platforms or liquidity pools. The users would then be able to do more than simply trade their stocks.
By moving stocks on-chain, eToro will allow trading anytime, without the restrictions of traditional market hours. The shift also creates new ways for investors to diversify portfolios and access financial tools directly from a blockchain wallet.
EToro is not the only player in this move. Robinhood recently added tokenized stock trading for European users. Crypto exchanges such as Kraken, Gemini, and Bybit also made the same move. These are signals of rising interest in the integration of regulated assets with blockchain.
EToro Follows Up With New Tokenized Assets
eToro has gained such experience in the market over time. In 2019, the firm purchased the Danish token firm Firmo. Then, digital versions of silver and gold followed. The new stock token service also continues the same trend.
New global regulations for cryptos are also urging companies to offer legally compliant tokenized assets. Laws like MiCA in the EU and proposed legislation in the United States are offering clear paths for such offerings. This is helping companies like eToro move forward with confidence.
The step is also an indication of rising confidence in blockchain for the digital age of investing. There is increased market access, fuller convergence with DeFi, and increased trading flexibility through the tokenization of stocks. With the regulatory lag, others will follow the trend in the months ahead.
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