eToro launches 8 brand new stablecoins with eToroX exchange
Presenting the eToro stablecoin series: NZDX, JPYX, CHFX, USDEX, EURX, GBPX, AUDX and CADX.
For a couple of reasons, it's quite different from anything else currently out there.
First, eToroX – separate from the eToro platform itself – is regulated and certified by the Gibraltar Financial Services Commission with a DLT license (number FSC1333B, in case you were wondering). The licence requires practices such as the segregation of customer funds, appropriate solvency, fair communication to consumers and so on.
It doesn't sound too exciting, but what this actually means in practical terms is that eToroX is measurably safer than most other exchanges. This is actually a fairly radical point of difference compared to most other exchanges, which don't have any actual proof of their security measures.
For example, QuadrigaCX boasted of security measures such as "encrypted cold storage" and "collective intelligent threat detection." Unfortunately, the cold wallets turned out to be mostly a lie, while a quick Google search shows that "collective intelligent threat detection" isn't actually a thing that anyone except QuadrigaCX has ever said. In hindsight, that should probably have been a warning sign.
It doesn't sound as cool as "collective intelligent threat detection," but it's worth emphasising that regulation and certification of the kind eToroX has are security measures that actually mean something.
Second, eToroX is launching with an intriguing pallet of its very own fiat-backed stablecoins:
- eToro New Zealand dollar (NZDX)
- eToro Japanese yen (JPYX)
- eToro Swiss franc (CHFX)
- eToro United States dollar (USDEX)
- eToro Euro (EURX)
- eToro Pound sterling (GBPX)
- eToro Australian dollar (AUDX)
- eToro Canadian dollar (CADX)
These will join six other cryptocurrencies: Bitcoin (BTC), Ether (ETH), Ripple/XRP (XRP), Dash (DASH), Bitcoin Cash (BCH) and Litecoin (LTC).
Both the stablecoin and cryptocurrency selections are set to grow in the near future, according to eToroX managing director Doron Rosenblum.
"In the coming weeks and months we will add more cryptoassets, stablecoins and tokens to the exchange and will work with other exchanges to encourage them to list our growing range of stablecoins," he said.
It will be especially interesting to see how the stablecoins percolate through the cryptosphere, whether currency preferences start changing once you take geography out of it, and how much appetite there is for different stablecoins. Stablecoins pegged to the US dollar are by far the most popular, but the US dollar is perhaps not the most stable store of value, in the absolute sense, when compared to Swiss francs or other currencies.
It's also going to be interesting to watch how eToroX and its stablecoin range fit into the company's broader plans of putting everything onto the blockchain.
"We believe that we will see the greatest transfer of wealth ever as financial services move onto the blockchain. The blockchain brings transparency and a new paradigm for asset ownership. In time, we will see the tokenization of all traditional asset classes, as well as the emergence of new asset classes such as tokenized art, property or even IP. Cryptoassets are just the first step on this journey, and we are excited to explore the opportunities offered by tokenization with the launch of our exchange."
Disclosure: The author holds BTC at the time of writing.