Robinhood plans to tokenize stocks on new blockchain, potentially challenging traditional exchanges like NYSE.

Robinhood plans to tokenize stocks on its new Ethereum-compatible blockchain, Robinhood Chain, shifting trading volume from traditional exchanges like NYSE. Users can trade tokenized derivatives of stocks directly onchain, enabling near-instant settlement and 24/5 trading. The move challenges traditional market liquidity and activity, potentially leading to a shift in trading platforms. Robinhood aims to monetize every layer of the trading stack with this initiative, offering users new possibilities like 24/7 trading and programmability for tokenized assets. However, volatility risks and regulatory uncertainties remain, with the SEC yet to comment on the model. SIFMA has urged the SEC to reject trading of tokenized equities outside the Regulation NMS framework.

Read more at CoinTelegraph: Robinhood Tokenization May Undercut NYSE Liquidity, Galaxy Warns