Written by: Vlad Tenev, Robinhood CEO
Compiled by: Chopper, Foresight News
We are in the early stages of a global super-cycle of asset tokenization. Last year, I compared it to a freight train that cannot be stopped, one that will ultimately reshape the entire financial system.
Since then, tokenization has entered the mainstream consciousness and is no longer just talk. Outside the United States, Robinhood has been launching products early and continuously pushing the boundaries of this new industry. Just over a month ago, at our "The World is Flat" event in London, the Robinhood Chain mainnet officially launched. It is the first public blockchain specifically built for Real World Assets (RWA), with tokenized stocks at its core, becoming the fastest EVM chain to reach 100 million transactions. Users in over 120 countries worldwide can use it to invest in over 190 U.S. stocks, with these tokens backed 1:1 by the underlying securities.
But there is a glaring gap: stock tokens are not yet available for use within the United States itself.
In the U.S., the discussion around tokenizing stocks has split into two main camps: one eagerly awaits when tokenized stocks will be available domestically; the other questions, what's the point? In many overseas regions, ordinary users have difficulty buying U.S. stocks and other quality real-world assets, unlike the domestic U.S. market where platforms like Robinhood already offer extensive, low-cost, and convenient access to U.S. stocks.
The market also debates the product structure of tokenized stocks themselves. Currently, Robinhood's stock tokens are fully backed by the underlying securities, and users on-chain receive the corresponding economic benefits, including dividend rights. It is not equivalent to directly holding the original stock itself, but to focus solely on this point misses the core of the innovation: for the first time in history, quality financial assets can be made into tokens with the properties of being portable, programmable, and self-custodied, enabling 24/7 trading within an open financial ecosystem.
And this is just one form of tokenization. As regulatory frameworks gradually mature, the design of tokens will continue to evolve. In the future, tokenized equities that fully inherit all shareholder rights of traditional stocks will emerge.
Tokenization is the optimal path to modernize the American financial system, enabling broader asset ownership. U.S. domestic investors should also reap these benefits. Tokenization isn't just about moving stocks onto the blockchain; it's about reconstructing the underlying infrastructure of asset ownership, allowing assets to flow as freely as information on the internet. For U.S. investors, this infrastructure will immediately bring three core advantages.
First, tokenization enables real-time clearing and settlement, enhancing market resilience.
The GameStop crisis must not be repeated. In retrospect, the root of the trading restrictions during the GameStop saga lay in the risk control rules of traditional clearinghouses, constrained by the T+2 settlement cycle. Our industry has already pushed the market to transition from T+2 to T+1 settlement. Even so, during the gap between trade execution and final settlement, brokers still need to front massive amounts of cash to hedge risks.
On the blockchain, stock tokens can complete the entire process of trading, clearing, and asset transfer in real-time. Real-time settlement can significantly reduce systemic risk and market stress, especially during periods of extreme market volatility.
Second, tokenization brings native 24/7 trading capability.
Today's markets are global. Major news often breaks after U.S. markets close or on weekends. By the time Monday's opening bell rings, prices have often moved significantly. For decades, institutional investors have had access to complex hedging instruments to manage such risks, but ordinary retail investors do not. Therefore, 24/7 trading isn't just for capturing opportunities; it's also a risk management tool.
Robinhood has already achieved 24/5 trading in the U.S. using the traditional system, and we will continue innovating towards a truly 24/7 model. But achieving this functionality by piecing together multiple exchanges and alternative trading systems is extremely complex. On blockchains like Robinhood Chain, 24/7 trading and fractional share trading are native, built-in capabilities.
We've already witnessed its power on Robinhood Chain and other protocols: users outside the U.S. have already traded millions of dollars worth of stock tokens over weekends. The internet never sleeps, and markets shouldn't either.
Third, tokenization gives users more control over their assets, forcing financial platforms to compete.
In the traditional financial world, transferring assets to another broker relies on the legacy ACAT transfer system, a process that takes days and offers a poor experience. Many investors are afraid to move, fearing their assets will be in limbo during the transfer, especially during market volatility. Tokenization enables the global, instant transfer of assets, whether between traditional brokers or into the DeFi world. Once friction is eliminated, the portable nature of assets will force platforms to compete on pricing and product innovation. Users can pursue better product experiences, no longer locked into closed ecosystems.
Portability is just one advantage of self-custody. Users can hold stock tokens in their own crypto wallets. Beyond having greater control, self-custody unlocks more ways to use assets, such as using them for lending or as trading collateral in DeFi. Currently on Robinhood Chain, developers have already built many stock token applications we hadn't initially envisioned. As we improve the underlying RWA components and provide developers with more tools, the prosperity of the on-chain economy will accelerate further.
However, unlocking these benefits within the United States requires far more than just technology. Over a century of U.S. securities regulation has created a complex set of rules built on an outdated market structure and old technology. The original intent of many rules is to protect investors and maintain market order, but in practice, they have also reinforced traditional infrastructure that cannot keep pace with modern technological capabilities. Market participants are already migrating to blockchain-based systems, but policymakers need to modernize the rules, embracing superior new infrastructure while preserving essential protections. And they must act swiftly. Other jurisdictions will not wait for the U.S. to catch up, and getting this right is profoundly important.
The tokenization of listed stocks is just the beginning. It can help build the infrastructure, liquidity, and on-chain ecosystem to support a much broader range of asset classes in the future. The next step is assets with high barriers to entry and poor liquidity today, most notably private company equity. Technology cannot eliminate all barriers; regulations like accredited investor rules will still exclude the vast majority of Americans from primary markets. But perfecting the tokenization infrastructure for listed stocks can pave the way for broader investment access, enhanced liquidity, and entirely new models of ownership.
U.S. investors should also enjoy the fruits of this innovation. After all, most of the assets being tokenized are U.S. domestic assets, and much of the innovation is being driven by U.S. companies like Robinhood. It would be a profoundly absurd outcome if the whole world builds the future of asset ownership around U.S. assets, while Americans themselves are excluded.
