Robinhood officially launches tokenized stock trading and partners with Arbitrum to develop a dedicated Layer 2 blockchain

Recently, Robinhood officially announced the launch of tokenized stock trading services, covering more than 200 US stocks and ETFs, and developed a dedicated physical asset (RWA) Layer2 Blockchain based on Arbitrum technology. This move marks Robinhood’s official entry into the crypto market, showcasing its ambitions in this field.

At a press conference held in Cannes, France, Robinhood announced that it will offer tokenized stock trading services to EU users. Currently, over 200 US stock assets are supported for on-chain trading 24 hours a day, 5 days a week, including tokens of some well-known private companies. The company plans to expand the variety of tradable assets to thousands by the end of this year.

To attract users, Robinhood EU is offering eligible EU users the first batch of private company stock tokens for free, with the activity deadline set for July 7. This product only charges a 0.1% foreign exchange conversion fee, aimed at reducing the high intermediary costs for European investors entering the US market.

In addition to tokenization of stock trading, Robinhood has also announced a series of features related to crypto assets. European users will be able to trade crypto perpetual contracts with up to 3x leverage, while U.S. users can stake ETH and SOL in compliant areas. Additionally, the company will launch a credit card that supports crypto cashback, a personalized AI assistant called Robinhood Cortex, a temporary 1% reward on crypto deposits, and introduce a “tax lot” feature to help users achieve better tax strategies when selling crypto assets.

Robinhood Crypto General Manager Johann Kerbrat stated that the company is developing its own Layer2 Blockchain specifically designed for RWA based on Arbitrum, tentatively named Robinhood Chain. The design of this new chain began several years ago, focused on RWA architecture, aiming to break down the “walled garden” of traditional finance and achieve a more open and transparent asset trading experience.

In fact, Robinhood has been planning to enter the tokenization stock market for some time. In May of this year, there were reports that the company is actively developing a platform based on blockchain technology that would allow European retail investors to trade American tokenized stocks. To advance this business, Robinhood obtained a brokerage license in Lithuania in April of this year, gaining the qualification to provide investment services across the EU. At the same time, the company acquired the established cryptocurrency exchange Bitstamp for $200 million, further consolidating its technological and compliance foundation in the European market.

As more and more crypto institutions take tokenization of securities as an important part of their strategic expansion, the competition in this market is intensifying. For example, some well-known trading platforms have allowed non-US clients to trade stocks in token form, launching tokenized US stocks in regions such as Europe, Latin America, and Africa.

For traditional brokers constrained by compliance and clearing systems, securities tokenization is gradually leveraging the traditional landscape with its low threshold, flexibility, and combinable characteristics. As a retail securities trading pioneer, Robinhood has faced growth pressure in its traditional business in recent years, and its zero-commission model for stock trading has struggled to maintain a competitive advantage. To this end, the company has embarked on a diversified layout of cryptocurrency business and achieved good results. In the first quarter of this year, Robinhood’s total revenue grew by 50% year-on-year, with cryptocurrency business revenue doubling year-on-year to $252 million.

Robinhood CEO Vlad Tenev has been a vocal supporter of securities tokenization. He believes that crypto technology offers a more equitable, flexible, and 21st-century financial system, which will usher in the most inclusive investment revolution since the shift from trading floors to electronic trading for stocks. This technology can flexibly split and distribute ownership, allowing it to be traded freely like stocks with only minor modifications to existing corporate equity legal documents.

However, Tenev also acknowledges that private equity of current U.S. companies is regulated, but there is still no clear guidance on how to legally issue and trade tokenized securities on crypto platforms. In contrast, regions such as the EU, Hong Kong, Singapore, and Abu Dhabi have already established a complete regulatory framework supporting the issuance of Security Token Offerings (STO) and digital exchanges.

To this end, Robinhood submitted a 42-page policy proposal to U.S. regulators in May this year, which included a comment letter on asset tokenization, calling for the establishment of the world’s first federal regulatory framework for RWA tokenization. The company also revealed plans to create an RWA trading platform, Robinhood RWA Exchange, based on certain blockchain platforms.

With Robinhood officially entering the tokenized stock market, competition in this field is undoubtedly set to intensify. However, regulatory uncertainty remains one of the main challenges facing this market. In the future, finding a balance between innovation and compliance will be a common issue that Robinhood and other market participants need to address.