Robinhood has announced the ‘Robinhood Chain,’ an Ethereum-compatible layer-2 blockchain built on Arbitrum Orbit technology, designed to tokenize traditional stocks for blockchain-based trading. The initiative aims to disrupt conventional equity markets by enabling continuous trading access and enhancing liquidity through distributed ledger technology.
The platform will initially support 24/5 trading operations with plans to expand to 24/7 functionality, directly challenging established exchanges like the NYSE by shifting liquidity onchain. Tokenized stocks promise faster settlement times and increased market efficiency compared to traditional systems.
Regulatory uncertainty remains a significant hurdle, with the service currently limited to European Union users due to the absence of clear SEC guidance in the United States. Industry groups including the Securities Industry and Financial Markets Association (SIFMA) have urged regulators to maintain existing frameworks while developing specific rules for tokenized assets.
Robinhood’s move highlights the accelerating integration of blockchain technology into mainstream finance, though volatility concerns and unresolved compliance challenges persist. The project’s success hinges on navigating evolving regulatory landscapes across key markets.