eToro's Masterplan for Tokenization & Crypto Revealed! with Yoni Assia

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go to vchain dot org. Link will be in the description. Hey folks, welcome into the Thinking Crypto Podcast. I'm your host Tony Edward and joining me today's Yoni Asia, who is the co founder and CEO of e Toro. Yoni, it is great to have you back on. Thank you for having me.

to that and what does it mean for the company.

for Etro as a public company. It's definitely been one of the most exciting journeys I've ever been to. I think last time we spoke, just after the Warren Buffet dinner, I told you about like the three bigg Aha moments

I had in my life. One of them was, obviously the first time I saw the Internet, the second was the first time I traded stock, and the third was looking at crypto and bitcoins specifically understanding how blockchain technology eventually replaces everything in the financial services industry and everything

becomes digital. And no doubt that being in this process of the IPO process and meeting investors who manage more than thirty trillion dollars, which is mind blowing, like the size and scale of US capital markets and how you meet investors from all around the world is definitely another one of those amazing moments where you come out a bit of a different person understanding how the markets work.

because there was so much aggression against the industry. What are your thoughts on how the environment has changed, and obviously that has benefited you going public and much more so.

of crypto market. So I think it's definitely amazing to see how US and US public policy have really adopted the crypto mindset, the fact that capital markets are being digitizer, being tokenized, and have brought that into the front and center of policy. And that's definitely a very big difference from where it was and by the way we were regulated at ICTURO. Today still our biggest market is Europe, which has now NIKA, which is a Pan European a

digital asset regulation. We have the UK, which has been relatively early into crypto, the FC the regulator there with licenses, also in Australia, Singapore, Abu Dhabi and of course the US. So it's really amazing to see how their shift globally moved from where it was, you know, five and ten years ago very anti crypto. Banks are very anti crypto ten years ago, five years ago, gradually adopting talking about

it to where we are today. Every single financial institution in the world, every single bank, central bank has their blockchain strategy, their digital asset strategy. The largest financial services or asset managers in the world, including partners of ours and smart portfolios like Franklin Templeton, like Blackrock, like Fidelity,

are launching their own tokenized assets. So it's quite amazing to see that vision where we originally talked about that vision with colored coins in twenty twelve, of real world assets moving on chain really required that policy change, and now it's happening, and now is basically when things get real right with real world assets on chain.

everyone is recognizing the benefits and potential of this technology. Now you mentioned tokenization of markets and much more. E Toro has been leading the charge doing a lot there. Tell us about your plans for tokenizing assets such as stocks.

now started expending it. The biggest challenge has always been

one regulation and the other part is liquidity. So if you think of the sort of aha moment when starting to use bitcoin, it's really about the fact that this asset is potentially self custodied, whether it self is an individual or firm, right, so you can own the actual asset yourself, and it's twenty four seven transferable, which also means it's tradable twenty four to seven, and I think that coming to financial markets, meaning of ventually all markets

become twenty four to seven. And we are already seeing that shift in stocks, with many stocks moving from just nine hours a day to suddenly twenty four hour a day trading. That shift has come also in futures, which we recently launched, which are twenty three hours a day, five days a week. I think that transition where assets become digital, movable on chain without a dependency necessarily on a centralized entity being open at that time is the

future of all assets, from bonds to real estate. And I think now we're starting to see just again very early days of tokenizing real world assets and enabling global access into the global markets in the form of digital assets.

And again super interesting to see how front and center that is for now US policy talking about taking capital market it's on chain, and I do believe and we are already seeing many other market participants that are very keen to see how this creates more liquidity, more opportunity, more capital for formation opportunities across different industries.

assets gives a lot of people around the world who didn't have access to financial services and being able to invest and make their lives better. Right, even if they're just buying a handful of token ied stocks. They don't have to be millionaires. But maybe you're in some country in Africa or Latin America, any want to buy some Tesla stock, maybe to buy two tokenized versions of it. That is the access they never had before, and they can benefit from the appreciation of those stocks.

relates also directly to owning stocks and capital markets. And I think the four hundred million research people using digital assets or crypto assets will now shift into those individuals will relearn how to invest in trading crypto assets into also capital markets.

vast majority of assets physical assets, real assets are. The beautiful thing is if you look at a lot of the DeFi projects, everything around lending, collateral, everything around things like flash loans, which are you know, mind blowing, don't exist in the wural world of multi party smart contracts, which again are extremely hard to do between financial institutions.

When all of that get unlocked in financial services, in connecting financial services entities and companies and people around the world, I believe that unlocks a lot of innovation that for some extent it's hard for us to imagine. But if you just think of the simple, like big benefit of

smart contracts. Within a smart contract, you define the contract as code, then you have multi you know a lot of different individuals, whether it's user or companies, and then access to that con If you compare that to how traditional financial services work, it's like us as a company Toro with Goldman Zacs or black Rock or another participant. Each of us need to have a contract between ourselves.

It's very hard to create innovation that basically pens around multiple participants, and I think again we're very early stages of that. We've seen a lot of that technology evolve in the crypto space. The benefits of those technologies coming into basically mass retail usage are again very exciting.

traditional institutions. You know, with the emergence of the Internet around the globe, people having smartphones being able to trade on e Toro or other apps. Right, do you see in the future we're less dependent on investment banks like a Goldman Sachs because we have to token ize version of these assets. The markets are opened up and I

could just do it from my phone. I have more education because I'm learning from brands and companies like e Toro, but also the wealth of information on the Internet that trad file is kind of losing some of their market share or power, so to speak.

generational shift. And if you look at this generational shift, you can sort of split into two front in the mechan On the front end, you have what will become in the next twenty five years the wealthiest cohort of individuals on the planet. Younger generations gen Y is going to roughly have eighty more trillion dollars in the US alone, sixty trillion additional dollars in US and Europe, so that's one hundred and forty trillion dollars moving from older generations

to younger generations. Where our generations gen Y really expects to access technology through their mobile phone. It's it's going to be your AI glasses, but it's technology first, product first approach where people expect to basically interact with whoever provides them financial services across different verticals, whether it's money transfers, whether it's trading and investing, with constant focus on how can I use the latest technology, any tous case to

help make me a better, more successful investor. So on the front end, we're moving to where my father used to tell me that, you know, a financial product is a hedge fund or an ETF, basically a list tread fi product, usually denominated in a local currency, the local exchange to asking jen y what's the financial products and they would say any Toro app or basically nick app on their phone. That's happening on the front end. Then on the back end, that's where blockchain technology transforms from

being dependent on basically local financial institutions. So if you think you know the world, it's still extremely fragmented. Every country has their own financial institutions. We operate in seventy five countries and it's quite amazing you go into almost each of those countries. Because I've been doing this for eighteen years, I can name you where the brokers, banks and insurance companies in France and Metally and Spain in the UK and Australia and Singapore in the US very

different companies. Because again financial services has grown from being basically a local industry on the B to B side a global industry, but still all of the consumer company are very much still hyper local. When you think of blockchain unlock basically access to all of those markets twenty four to seven, so a lot of new technologies on

the beck and transforming the entire financial services paradigm. That's another. Okay, maybe it's by the way, the same one hundred and forty trillion dollars who are going in my view to move on chain, right, So you have one is those assets are going to move from older generations to younger generations which have a very different user experience expectations from the firms constantly providing them with the most advanced technology.

And on the other hand, you have those assets that are moving from our cake by the way, in some cases cobol systems and banks that were written in the eighties of the nineties moving to twenty four to seven blockchain based technologies, and those basically two very very big paradigm shifts are going to transform everything around finance in my view, to the better.

markets and access to all these new assets because they're being tokenized. Do you envision that we're going to need the support of AI AI agents when we're sleeping to manage our portfolio? So a two part question, will the envision AI being part of it? And is Etra looking to leverage that technology as well?

technologies happening right now. AI and smart contracts, and the relationship between the fact that AI agents can actually interact both viapis as well as via a ricly smart contracts, and we launched is one an AI analyst story enables all of our customers to actually interact through chat to basically look and understand what other people are doing on

the platform. To immediately after earnings, ask the analysts to compare what's happened right now in earnings, how does that impact my personal portfolio, what's happening in the markets, how does that impact my portfolio? Or to other people like me are doing? Me can do all that through chat and on the back end, we're opening APIs for all of our pro investors to actually build apps with vibe coding.

So think about the difference of I've been passionate about building algorithmic systems since I was about I think thirteen I started to trade. Sixteen I already wrote my first program trying to basically build algorithmic trading for me, which

was a very very big project. And over time what you see is the ability and how fast you can actually launch a quantitative strategy, an agent that looks at your portfolio, that looks at what's happening in the world in real time, that's able to adjust to what's happening in the world twenty four to seven. Maybe another agent which is your chief risk officer who's managing the risk

parameters of your portfolio. I have no doubt that retail investors can become significantly more successful investors using AI and using AI agents that operate easily over those APIs. We're opening that world now on top of obviously real world assets stocks on etoral from twenty two different capital markets, and obviously that connects directly to our Toro Proper Investor program.

So when our most sophisticated investors are starting to use those APIs and tools, the rest of our customers can actually copy them on our platform very easily, basically gaining that alpha themselves as well.

the ability to launch more crypto assets. And as they said, we already support one hundred crypto assets, and we do plend to continuously now expand basically more and more assets on nitauros only Toro. We're constantly looking not only at let's say, more crypto assets, but we add futures trading, twenty four or five trading, starting to look at tokenized

stocks trading, as well as options trading. So continuously expanding the universe to find opportunities eventually for people to trade and invest in.

risks and benefits of crypto assets and digital assets. And I do believe US being by far the largest capital markets in the world now adopting better regulations and have more clarity will bring in just more liquidity into the markets. And more liquidity into the markets means more assets in the market that are more liquid potentially and eventually twenty

four to seven. So I think this is definitely the steps in the right direction to again foster innovation and enable companies to succeed in a more clear way both in the US and outside the US.

stable cooin bill. Of course, do you expect a stable coin innovation explosion, is etal looking at launching its own stable coin or will you be using stable coins already in the market.

trade stocks from your crypto directly. It's definitely a place where I do believe the fact that there's better clarity on regulation helps more people actually expand from crypto or diversify it from crypto into the stock markets. We haven't thought on us basically launching our own stable coin. I'd say never say never, but again definitely that unification. I

think what's happening really is unifying the world eventually. People right now when they look at it Toro and they look at our customers three and a half million customers, who then of Q two add seventeen and a half billion dollars of assets, you actually see almost every quarter our customers have the same amount of stocks and crypto in their accounts, which is very unique because if you look at traditional brokers, even if they have added crypto, it's going to be a very small part of their

assets and e towards roughly fifty to fifty between crypto and crypto assets and the stock markets for the past four or five years. And I think what's gradually happening again is that concept of digital assets, which is the unification between capital markets and existing real world assets in crypto assets, which is the technology of blockchain right now powering mostly crypto assets, and that unification in the middle eventually will be in my view, bigger than the two parts separated.

than twenty different capital markets. Think about fractional ownership of real estate, think about democratizing quantitative trading, which is something we're doing now in ne Toro, to quantitative more bond trading, or access to private markets. So again, when you think of those technologies of fractional global twenty four to seven transferable assets, I think those opportunities will create a lot of opportunities of capital formation as well.

excuse me, is the trend of digital asset treasury companies. A lot of companies buying crypto assets, putting it on their balance sheet, and there's that, you know, the nav aspect of you know, increasing their stock value and much more. And this seems to be a global movement recently, Ethereum specifically, it has been getting a lot of adoption. What are your thoughts on what's happening there in this new avenue so to speak of people buying assets crypto acids.

we bought about three thousand bitcoins. We had treasury for a while, but eventually sort of that became working capital in ititro to actually fuel the growth of our crypto business that significantly scale in two thousand and seventeen and then later on in the bull run of twenty twenty twenty twenty one. So I think, you know, owning or diversifying your treasury or diversifying your balance sheet always makes

sense to against significantly large public companies. Regarding sort of the specific companies that are only treasury companies, I think again you can't really argue necessarily with what I would say is significant success of micro Strategy building I think roughly one hundred billion dollar market cap of that specific treasury.

I do believe in bitcoin as an asset class as a hedge against inflation, and what micro Strategy or today's strategy did is that they made access to those markets in a simpler way to different type of investors, whether it's investors who are looking to invest in it, or convertible debt or just equity markets. That was prior to the ETFs. Right now we also have the entire ETF

industry and crypto, which is quite significant. I would say that there are risks or even more significant systematic risks when you think of usage of leverage in some of those entities. Though I would definitely say that there's sense in leveraging crypto, there's also a lot of risk in leveraging crypto when too many people jump on basically leveraged crypto ships. My concern is that in a de leveraging scenario, and usually what happens is when markets contract and markets correct.

And I've been in capital markets now for thirty years, so every time you see capital markets contract and correct, a lot of times leverage comes out very fast. When we think of the entire sort of a digital treasury public companies space, you need to understand the leverage of those companies. You need to really understand what happens in a significant market correction. And remember that you know, sometimes markets as much as they go up, when they correct,

it's usually a faster correction. We've seen this a couple of times with crypto, whether it's eighteen nineteen correction or relatively recently twenty twenty two correction, and just people need to remember lit it goes both sides. And I think a lot of people still remember the Gray Scale Fund, which was actually at a significant discount to its now

for a while. So again, premium and discounts announce is something that is seen in the markets, and now that there are more and more companies, I think those companies need to make sure people understand the risks of basically leveraging crypto and maybe a bit more conservative I like owning my own vehicle.

talk to people about it. If you take some of the cash on your balance sheet and you buy some baitcoorinn or eat, I don't think there's a big deal with that. Maybe take twenty five percent of your cash. But then if you go raise billions of dollars to go buy an acid and put yourself in debt, and that's that's the risk has increased one hundredfold.

reacted in my view but irrationally to tariffs. Everything fell sort of you know, twenty thirty forty percent. You can actually look at my public portfolio. I just bought that week. I think Google and Nvidia and Tesla after they felt like thirty fifty percent from all times high. So the I think a part of the markets is cycles. I think in public markets we've seen not long ago in twenty twenty two. So following twenty twenty one, we've seen

one of the most bearish years. We used to call this inn ey Toro the year of Education, where everybody sort of were educated about the fact that we went up ten times can actually go down ninety five percent at the same reason, sometimes faster, And we saw that sort of bear sentiment. A lot of retail investors, by the way, with the Toro actually stayed and huddled both

their crypto assets and their stocks. So I think retail investors Act of twenty twenty five have already learned sort of the worst time or bad times of the markets during twenty twenty two, both in crypto markets and capital markets, and the best way to avoid a significant sort of

drop in your portfolio diversify your portfolio. We believe that customers should diversify both between stocks, different industries, value investing, growth investing, tech investing, crypto investing, understand the different risks and understand the correlation between the different assets in your portfolio. I think I probably have as an investor one of the most diversified portfolios as a person. I'm copying about forty different smart portfolios in ETRO which are managed by

our chief investment office. I'm investing and copying about ninety different strategies of different proper investors on e Toro, and I think I own about another like eighty different stocks and to access in my portfolios an extremely diversified portfolio. And again that's my view, diversification eventually enables you to weather sort of bad times in the markets, is specifically in sort of specific parts of the markets.

invest in ets. So she kind of runs that side of our portfolio. I run the crypto. I'm the risk taker, but my portfolio is outperforming hers for sure.