Robinhood, the trading platform famous for the "meme stock" phenomenon, has officially entered the tokenized securities market. In a major strategic expansion, the company announced it will offer tokenized stock trading for over 200 U.S. stocks and ETFs to users in the European Union. The new service will be supported by a custom Layer 2 blockchain built on Arbitrum, specifically designed for real-world asset (RWA) tokenization.
Following the announcement, Robinhood’s stock price surged by over 12.7% to close at $93.6 on June 30, reaching a new all-time high. Arbitrum’s token, ARB, saw a slight pullback after previous gains as the market had already priced in the news.
EU Launch of Tokenized Stocks and New Blockchain with Arbitrum
At an event in Cannes, France, Robinhood introduced its tokenized stock trading service for EU-based users. The offering includes more than 200 U.S. equities and ETFs available for on-chain trading 24 hours a day, five days a week. Tokenized shares of private companies like OpenAI and SpaceX are also part of the initial rollout, with plans to expand to thousands of assets by the end of the year.
Eligible Robinhood EU users can claim free private company stock tokens through the app until July 7. The service charges a 0.1% foreign exchange conversion fee, significantly reducing the intermediary costs typically associated with cross-border investing.
Users will be able to self-custody tokenized stocks and ETFs through Robinhood’s crypto wallet or opt for a simplified experience without private key management.
The new dedicated blockchain, tentatively named Robinhood Chain, is being developed on Arbitrum and is architected specifically for RWAs. Johann Kerbrat, General Manager of Robinhood Crypto, stated that the chain has been in design for several years with the goal of breaking down the "walled gardens" of traditional finance to enable more open and transparent asset trading.
This move had been anticipated since May, when Bloomberg reported that Robinhood was developing a blockchain-based platform for European investors to trade tokenized U.S. stocks. At the time, it was reported that Arbitrum and Solana were both in the running to become technology partners.
Further evidence of the collaboration emerged through Robinhood’s presence on the Arbitrum Portal homepage alongside Stylus, a key Arbitrum technology. Robinhood also hosted a joint session with Arbitrum’s development team at the EthCC conference in Cannes.
This is not the first collaboration between the two; Robinhood Wallet integrated Arbitrum in March of last year to offer improved token swap services to its users.
Beyond Tokenized Stocks: New Crypto Features
In addition to tokenized equities, Robinhood announced several other crypto-related features. EU users will gain access to perpetual crypto contracts with leverage of up to 3x, while U.S. users in permitted jurisdictions can stake Ethereum (ETH) and Solana (SOL).
The company also plans to launch a crypto cash-back credit card, an AI assistant named Robinhood Cortex, a temporary 1% bonus on crypto deposits, and a "tax lot" feature to help users optimize capital gains strategies when selling crypto assets.
The Growing Tokenized Stock Market
Robinhood is among several major players entering the tokenized stock arena. Competitors like Kraken already offer tokenized stock trading to non-U.S. customers in select regions, with a selection of 60 U.S. stocks. Coinbase is seeking SEC approval to offer similar services, which would allow it to compete directly with traditional brokerages.
Gemini has also partnered with Dinari to offer tokenized stocks for EU users, starting with MicroStrategy (MSTR). Dinari itself has secured a broker-dealer registration in the U.S., making it the first platform of its kind to receive such approval.
For traditional brokers constrained by compliance and settlement systems, tokenization offers a flexible, low-cost, and composable alternative. Robinhood, which began with commission-free stock trading for retail investors, has been diversifying into crypto as growth in its traditional business slowed. These efforts are paying off: in Q1 2024, Robinhood’s total revenue grew 50% year-over-year, with crypto revenue doubling to $252 million.
Robinhood’s Push for Regulatory Reform
Robinhood CEO Vlad Tenev has been a vocal proponent of securities tokenization, calling expanded access to private markets one of the company’s "most important policy priorities."
In an op-ed for The Washington Post earlier this year, Tenev argued that private companies like OpenAI and SpaceX are only accessible to a small group of wealthy insiders, while ordinary investors are locked out until these firms go public at multibillion-dollar valuations. The number of publicly listed companies in the U.S. has halved since 1996, and accredited investor rules exclude around 80% of American households from private market opportunities.
Tenev believes crypto technology can create a more flexible and fair financial system, enabling fractional ownership and global liquidity for private companies without sacrificing corporate governance mechanisms like employee stock options.
However, he acknowledged that the U.S. lacks clear regulatory guidance for tokenized securities. In contrast, the EU, Hong Kong, Singapore, and Abu Dhabi have established clearer frameworks for security token offerings (STOs) and digital exchanges.
Tenev outlined three key reforms for the U.S.:
- Eliminate wealth-based accredited investor rules in favor of knowledge and risk-based assessments.
- Create a "security token registration" system to give small and medium-sized companies a new path to raising capital outside of traditional IPOs.
- Provide a clear compliance path for both centralized and decentralized crypto trading platforms to offer security tokens legally.
In May, Robinhood submitted a 42-page policy proposal to the SEC, including a nine-page comment letter on asset tokenization. The document calls for the first federal regulatory framework for RWA tokenization and reveals plans for a RWA trading platform built on Solana and Base.
Frequently Asked Questions
What are tokenized stocks?
Tokenized stocks are digital representations of traditional equities issued on a blockchain. They mirror the value of the underlying stock and can be traded 24/7, offering greater flexibility and accessibility compared to conventional markets.
How does Robinhood’s tokenized stock trading work?
EU-based users can trade tokenized versions of U.S. stocks and ETFs directly through the Robinhood app. These tokens are built on a Layer 2 blockchain and can be self-custodied or held with Robinhood, which charges a small foreign exchange fee for conversions.
What is the Robinhood Chain?
Robinhood Chain is a custom Layer 2 blockchain built on Arbitrum, optimized for real-world asset tokenization. It is designed to provide a secure, scalable, and regulatory-compliant environment for trading tokenized securities and other RWAs.
Is tokenized stock trading safe?
While blockchain technology can enhance transparency and reduce settlement times, tokenized stock trading carries typical market risks along with regulatory uncertainties. It is important to use compliant platforms and understand the legal framework in your jurisdiction.
Can U.S. investors use Robinhood’s tokenized stock service?
Currently, the service is only available to eligible users in the European Union. U.S. availability depends on future regulatory developments and approvals.
What other crypto features did Robinhood announce?
New features include crypto perpetual contracts for EU users, staking for ETH and SOL in eligible U.S. regions, a crypto rewards credit card, an AI assistant, and improved tax optimization tools. 👉 Explore advanced trading strategies
Tokenized stocks represent a major innovation at the intersection of traditional finance and blockchain technology. With its new offering and blockchain infrastructure, Robinhood is positioning itself at the forefront of this emerging field, while also advocating for regulatory clarity to support broader adoption.