Key Notes
- The launch leverages the Arbitrum Layer 2 blockchain to trade around 200 tokens, including the Vanguard S&P 500 ETF (VOO).
- Robinhood’s upcoming Layer 2 blockchain will support 24/7 trading, self-custody, and commission-free transactions for tokenized stocks like OpenAI and SpaceX.
- Investors will also receive dividends directly through the app, with tokens linked to popular stocks.
On Monday, Nasdaq-listed trading platform Robinhood (NASDAQ: HOOD) launched the tokenized version of US ETFs and stocks for private companies like OpenAI and SpaceX. The announcement pushed Robinhood’s stock price up by 12.77%, reaching $93.63.
The company said that it will be leveraging Arbitum Layer 2 blockchain to trade around 200 tokens of US ETFs in Europe. The initial rollout features ETFs such as the Vanguard S&P 500 ETF (VOO), the world’s largest wrapped strategy, with $677.9 billion in assets under management.
Speaking on the development, Robinhood chairman and CEO Vladimir Tenev said:
“Tokenisation is going to open the door to a massive trading revolution. Our latest offerings lay the groundwork for crypto to become the backbone of the global financial system.”
Meanwhile, Arbitrum’s native token ARB
ARB
$0.33
24h volatility:
11.3%
Market cap:
$1.62 B
Vol. 24h:
$583.06 M
jumped 17% on June 30 but quickly retraced after a major whale selloff.
Robinhood Tokenizes Private Firm Investments
Earlier this year, Vladimir Tenev explained how tokenization of stocks could play a pivotal role in granting retail participation for private companies.
However, the trading platform noted that it plans to introduce tokenized stocks on its upcoming Layer 2 blockchain, currently in development.
The platform will enable 24/7 trading and self-custody for users, with tokens tradable at zero commission and no additional spread. Investors will also receive dividend payments directly within the app.
The initial offerings will include tokens linked to popular stocks like Nvidia, Apple, and Microsoft. Robinhood also plans to expand into tokens tied to private companies, starting with Sam Altman’s OpenAI and Elon Musk’s SpaceX.
The RWA tokenization market saw a staggering 260% growth during the first half of the year. With such initiatives by Robinhood, the growth of the tokenization sector could accelerate further.
Will Tokenization Be Beneficial to ETFs?
Market analysts have been debating whether tokenization would be beneficial to the ETH industry moving ahead.
Ciarán Fitzpatrick, global head of ETF product at JP Morgan Securities Services, told ETF Stream that tokenization could provide long-term benefits for ETFs by enabling the exchange of ETF shares and the ability to hold ETF shares or tokens alongside other digital assets in a single wallet.
However, Fitzpatrick noted that current tokenization models introduce an additional step to the ETF process. In these models, ETF shares are first created through traditional mechanisms before being represented as related tokens, adding complexity to the chain.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
