Robinhood (NASDAQ: HOOD) is building toward a system where stock ownership could function more like cryptocurrency holdings, according to an executive at the blockchain firm that powers the brokerage's European tokenization project.

If the fintech’s plans move forward, users would be able to withdraw their tokenized equities off-platform or use them, much like digital assets, as collateral for crypto loans.

Robinhood Maps Out Three-Phase Plan for Tokenized Stock Trading

The company has charted a three-phase plan that starts with its recently launched tokenized stock offering in Europe and ends with users being able to move those assets freely across decentralized finance platforms, A.J. Warner, Chief Strategy Officer at Offchain Labs, said in an interview at Devconnect in Buenos Aires.

Offchain Labs developed Arbitrum, the layer-2 network underlying Robinhood's tokenized offerings.

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The initial phase, already live, lets European Union customers trade tokenized versions of nearly 800 publicly traded U.S. securities through the Robinhood app. The company has said it plans to add private equity exposure to the offering.

But those tokens remain trapped inside Robinhood's platform for now, with no way to transfer them to external wallets or other applications.

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CEO Frames Tokenization as Market Revolution

Robinhood CEO Vlad Tenev has staked his company's future on the bet that tokenization Tokenization Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen Read this Term will reshape capital markets. In an interview with The Iced Coffee Hour podcast, Tenev called tokenization “the biggest innovation in capital markets in well over a decade,” pointing to live pilots in Europe and prototypes involving SpaceX and OpenAI.

The goal extends beyond simply offering new products. Tenev wants to allow users worldwide to access U.S. stocks, trade them around the clock, and eventually add traditionally hard-to-reach investments like art, real estate, or private equity to their portfolios.

He described the vision as creating a “family office in your pocket” that could serve users “whether you're zero years old or, you know, a hundred years old.”

Current regulations on accredited investors remain an obstacle to fully democratizing private market access. “You can't invest in a private company unless you're a high net worth individual,” Tenev added.

Not everyone agrees with Tenev, however. Kraken CEO Arjun Sethi, for instance, is not a supporter of tokenizing shares in private companies, calling it a “terrible idea” from a retail-trading perspective.

Round-the-Clock Trading on the Horizon

Phase two of the roadmap centers on infrastructure changes, Warner said. Robinhood acquired crypto exchange Bitstamp for $200 million earlier this year, and Warner indicated that acquisition Acquisition Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Read this Term will support efforts to enable 24/7 trading of stock tokens. That would eliminate the time constraints of traditional equity markets, which operate during set hours on business days.

The most significant shift would arrive in phase three. Warner said stock tokens would become permissionless at that stage, meaning users could withdraw them from Robinhood and deploy them across decentralized finance protocols. A customer could theoretically purchase tokenized Apple shares, pull them out of the Robinhood app, and use them as collateral in a lending application like Aave.

“The way they describe phase 3,” Warner said, “is for assets to be permissionless and have the user's ability to interact with DeFi applications.”

That model would represent a departure from how retail equity trading currently works, where shares remain inside brokerage accounts and trades get processed through central clearinghouses. Instead, stocks would function as programmable units in an open financial system.

Technical Hurdles for Financial Infrastructure

One obstacle to making stock tokens permissionless involves compatibility between different types of code. Robinhood's core systems for matching trades and maintaining ledgers run on programming languages like C++ and Rust. Those languages don't work natively with Ethereum, where smart contracts typically get written in Solidity.

Rewriting existing financial infrastructure would require significant time and carry execution risk. Warner said Offchain Labs built Arbitrum Stylus to address that problem. The technology allows developers to write smart contracts in C++, Rust, and Python while maintaining compatibility with the Ethereum Virtual Machine.

Whether regulators in the EU and elsewhere will permit fully permissionless tokenized securities remains unclear. Financial authorities typically require licensed intermediaries to hold customer assets and maintain compliance controls. A system where users can freely move tokenized stocks to anonymous wallets and use them in unregulated lending protocols could face regulatory pushback.

The World Federation of Exchanges has warned that tokenized assets such as stocks could undermine market integrity, a signal that established players may resist losing their centralized role. Robinhood has built its reputation on disrupting incumbents, having pioneered the commission-free trading model that forced traditional brokerages to eliminate fees.