Robinhood CEO Says US Needs Rules for Tokenized Stocks or Risks Losing Ground Overseas

The U.S. could lose leadership in next-generation financial market infrastructure to overseas rivals if it does not move quickly to establish a regulatory framework for tokenized stocks.

CoinDesk reported on August 18 that Robinhood Markets Inc. Chief Executive Officer Vlad Tenev wrote on X that global financial markets have entered the early stages of a "tokenization supercycle." He called on U.S. regulators to open a path for tokenized equities to enter the regulated financial system.

Tenev argued that tokenization is not simply about putting stocks on a blockchain. Rather, it involves rebuilding the financial infrastructure that underpins asset ownership itself. That, he said, could enable real-time settlement, 24-hour trading and seamless asset transfers between financial firms.

He singled out real-time settlement as one of the main advantages of tokenized stocks. Tenev pointed to the 2021 GameStop episode, when Robinhood restricted purchases of some shares after clearinghouses sharply increased collateral demands, as evidence that the current settlement system can place heavy strain on financial firms during periods of market stress.

The U.S. stock market's settlement cycle has already been shortened from T+2 to T+1. Tenev said blockchain could handle trading, settlement and asset transfers in real time, further reducing the risk and collateral burden that build up between trade execution and settlement.

He also cited extended trading hours as another benefit. Robinhood already offers 24-hour stock trading, five days a week, in the U.S., but blockchain-based infrastructure could create a 24/7, year-round trading environment without having to connect multiple exchanges and alternative trading systems.

Robinhood is already expanding its tokenized stock business outside the U.S. It currently offers tokenized products tied to more than 190 U.S. stocks to users in more than 120 countries, with the economic benefits of dividends reflected in those products. The tokens are backed one-for-one by the underlying shares, but holders do not directly own the stocks.

In the U.S., however, rules governing securities trading, custody, clearing and shareholder rights remain major obstacles to broader adoption of tokenized stocks. Tenev said tokenized equities could eventually carry the same shareholder rights as conventional stocks if regulations permit.

He also raised the possibility of expanding tokenization beyond listed shares to private companies and real estate. The goal would be to make assets that have been less accessible and less liquid in traditional markets tradable on blockchain-based infrastructure.

"It would be a strange outcome if the world builds the future ownership infrastructure on top of American assets while American investors are left behind," Tenev wrote, urging U.S. policymakers to move quickly to update the rules.