Robinhood CEO Says US Tokenized Stocks Face Long-Term Hurdle From Regulatory Uncertainty

US securities regulators have moved to ease rules on trading tokenized stocks, but long-term regulatory uncertainty could still limit the market’s expansion.

Robinhood CEO Vlad Tenev told the company’s third-quarter earnings call on Oct. 28 that he views the US Securities and Exchange Commission’s innovation exemption for tokenized securities positively, according to Cointelegraph. Still, he said further regulatory work is needed.

Tenev said uncertainty over how regulation may change five years from now could discourage investors from committing sizable assets to the tokenized market. He added that clear rules or legislation will be needed to build long-term confidence for investment.

Robinhood currently offers about 200 stock tokens on its proprietary blockchain, Robinhood Chain. Those products are tokenized debt securities tied to underlying shares and do not provide the same voting or dividend rights as common stock. As a result, they are not covered by the SEC’s innovation exemption.

Tenev said Robinhood is reviewing ways to expand its tokenization business in the US and hopes to disclose related plans soon. The company plans to launch tokens tied to private-company shares first in overseas markets that meet regulatory requirements.

The market outlook remains positive. Binance Research projected the tokenized stock market could grow from $4.43 billion as of Sept. 15 to $349 billion by 2030.

Robinhood’s third-quarter crypto trading revenue fell 55% from a year earlier to $120 million. Crypto trading volume also dropped 38% to $50 billion. Revenue tied to prediction markets, by contrast, rose sixfold to $173 million, while total net revenue increased 12% to $1.42 billion.