Robinhood CEO: 'Tokenizing stocks is needed to prevent a repeat of the GameStop episode'
Summary
- Robinhood CEO Vlad Tenev said the root cause of the GameStop episode was slow and outdated financial infrastructure.
- Tenev said the fundamental solution is to trade stocks on a blockchain, emphasizing that introducing stock tokenization and blockchain-based stock trading could reduce settlement delays and systemic risk.
- Robinhood said it plans to roll out tokenized stock trading and decentralized finance (DeFi) features in the coming months.
Vlad Tenev, co-founder and chief executive officer (CEO) of U.S. stock and digital asset (cryptocurrency) trading app Robinhood, pointed to limitations in financial infrastructure as the root cause of the 2021 GameStop trading halt episode and proposed stock tokenization as a solution.
According to cryptocurrency news outlet CoinDesk on the 28th (local time), Tenev said, "The GameStop episode was not caused by any particular malicious actor, but stemmed from slow and outdated financial infrastructure." He explained that "unprecedented trading volume and volatility concentrated in a handful of names, and the existing system could not handle it."
He went on to stress that "while the stock settlement cycle has been shortened from the previous 2 business days (T+2) to 1 business day (T+1), it is still not enough," adding that "the fundamental solution is to trade stocks on a blockchain." Tenev said that if blockchain-based stock trading is introduced, settlement delays would disappear and both systemic risk and the burden on brokerages could be reduced at the same time.
He also added that "if stocks are traded on-chain, customers will be able to trade whenever they want, in the way they want."
Robinhood has previously been reported to be planning to launch tokenized stock trading and decentralized finance (DeFi) features in the coming months.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
