Stocks will be tokenized

Robinhood tokenizes 200+ US stocks. This isn't just a feature; it’s a platform transition.

Hey, it’s Marc.

Robinhood just declared war on the $120T global stock trading infrastructure.

By tokenizing 200+ US stocks on Arbitrum (Ethereum) and building a proprietary blockchain, they're positioning to eliminate settlement costs (and risks!) that generate hundreds of millions in annual fees for incumbents – all while offering 24/7 trading [ANNOUNCEMENT].

With that, they not just cutting out the brokers; they’re rewriting the playbook for global stock access.

And buried in that announcement was another gem: They’re launching tradable tokens for private companies like SpaceX and OpenAI that regular people can't normally buy.

Let’s unpack.

How “tokenizing stocks” works

Robinhood is launching 200+ tokenised US stocks and ETFs. Here’s what that actually means:

• Robinhood owns a stake in a Special Purpose Vehicle (SPV) that purchases and holds real Apple (AAPL) shares in traditional custody

• For every physical share the SPV holds, exactly one ERC-20 token gets minted on Arbitrum blockchain

• Users trade these digital tokens instantly, 24/5 (expanding to 24/7 on Robinhood's future proprietary L2)

• When users sell, the SPV liquidates the real share and the token gets "burned"

• Settlement happens in seconds rather than the T+1 standard that costs traditional brokers $0.04-$1.50 per transaction in DTCC fees

The Numbers Behind Settlement Savings:

• Current DTCC costs: $0.21 per night delivery, $0.68 per day delivery, plus clearing fees of $0.95 per transaction

• US daily trading volume: 10-15 billion shares

• Annual settlement infrastructure spend: Major brokers like Charles Schwab spend tens to hundreds of millions annually on settlement infrastructure

• Robinhood's advantage: Near-zero marginal settlement costs on blockchain rails

The user experience: Seamless. Users don’t notice anything, except that they can now be trading 24/5 and much lower fees.

In short: Robinhood is replacing Wall Street’s old pipes with new, faster, and cheaper ones. The private company tokens for SpaceX and OpenAI are a clever hook, but the real play is rewriting the rules for public stocks.

This is how it disintermediates brokers:

• Instant Settlement: The blockchain verifies and settles the trade in seconds. This rips out the entire traditional 1-2 day settlement process run by middlemen like the Depository Trust & Clearing Corp.

• 24/7 Trading: Blockchains don't sleep. The NYSE's 9:30 am to 4:00 pm hours become irrelevant.

• Lower Costs: By cutting out the middlemen and legacy infrastructure, the cost to trade plummets, allowing for zero-commission trading.

Read the full story below:

The AWS moment of finance

Cutting out Wall Street

Phase 1:

• 200+ tokenized US stocks/ETFs on Arbitrum

• Zero commission, zero spread trading

• 24/5 availability

• Target: Reduce friction, prove concept

Phase 2:

• Private company tokens (SpaceX, OpenAI already minted 2,300+ tokens)

• Target: Access to investments typically restricted to accredited investors

Phase 3: The Robinhood Chain.

• Proprietary Arbitrum-based L2 blockchain

• 24/7 trading (instead of 24/5)

Goal: Own the entire infrastructure stack. The goal is to become the primary global gateway for any asset that can be tokenised.

So what? Robinhood isn't just launching tokenized stocks. They're executing a calculated bet that blockchain rails can replace a century of financial infrastructure. The company is teaching 25.8 million users to use crypto technology disguised as familiar stock trading, potentially accelerating mainstream adoption by stealth.

The new battlefield

A few years ago, Robinhood was just a zero-commission stock app. Now, they're building a global financial super appwith a unique competitive moat.

The Licensing Arbitrage:

• Robinhood: Securities license + crypto license = can offer everything

• Coinbase/Kraken: Crypto license only = limited to crypto-native products

• Traditional brokers: Securities license only = slow to add crypto

For now, they seem to be in the winning position. Just after the announcement this week, the stock price jumped by 10%:

• Regulatory first-mover advantage: Years ahead of Coinbase in securities licensing

• Customer journey: Easier to add crypto to stock traders than stocks to crypto traders

• Risk profile: Tokenized stocks feel familiar to existing users

• Revenue diversification: Less dependent on crypto volatility than pure exchanges

With their dual licensing advantage, Robinhood has a legitimate shot at becoming the primary gateway between traditional finance and crypto for retail users. Exactly the position Coinbase thought they'd own.

Plus, they already have 25M customers and $200B AuM to start with.

The tokenization war isn't coming. It's here, and Robinhood just put itself into the pole position.

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The prize

The market Robinhood is chasing is massive:

• $13.5T: Projected size of tokenised real-world assets by 2030

• $2.08T: Current RWA tokenisation market size (growing 45% annually)

• 25.8M: Robinhood's existing customers who could be converted

Not all tokenization is equal

While on the surface it appears Robinhood, JPMorgan, and BlackRock are all "tokenising assets," they are playing fundamentally different games with vastly different risk profiles:

Robinhood's bet is an order of magnitude riskier because it is a direct-to-consumer, offensive assault on a regulatory grey area.

It’s not that easy

This all sounds great, but it's actually a lot more complicated:

1. Right now, Robinhood operates in regulatory arbitrage, offering derivatives to circumvent securities laws.

2. “Private companies can just skip the IPO now, right?”. No. OpenAI and SpaceX tokens on Robinhood lack:

   1. Legal ownership rights and voting

   2. SEC-mandated disclosure and audits

   3. Regulatory protections

   4. Deep liquidity

   Robinhood's tokens provide none of this. They're synthetic derivatives, not equity. IOUs, not actual ownership rights. OpenAI explicitly denied involvement and called the tokens "not OpenAI equity." The same thing with tokenized “stocks”. Users get exposure to Robinhood's investment vehicle, not the companies themselves.

And right now, Robinhoods model is risky - very risky:

• Liquidity Risk: A tokenized Apple share is not a real Apple share. Its price depends on having enough buyers and sellers in Robinhood's ecosystem. If liquidity is thin, the token's price could detach wildly from the actual stock price on the NYSE. Early examples of other tokenized stocks have seen spreads of over 0.60% and required only a small order to move the price by 2%—unthinkable in traditional markets.