At the EthCC conference, Robinhood's CEO Vlad Tenev introduced a new blockchain — Robinhood Chain, aimed at changing the approach to stock trading.
Presentation of Robinhood Chain
Robinhood Chain, Ethereum-compatible, allows users to trade tokenized derivatives of stocks directly on-chain. Tenev stated that the platform will support 24/5 trading, with plans to transition to 24/7. Users will be able to self-custody these tokens and interact with decentralized applications.
Impact on Traditional Exchanges
According to Galaxy Digital, Robinhood's entry into the tokenized assets market could undermine the liquidity advantages of traditional exchanges, such as the New York Stock Exchange. The new platform may redistribute trading activity from conventional venues to blockchain platforms, potentially affecting their revenues.
Potential Risks and Regulations
Despite the opportunities, new trading models raise questions about volatility and regulation. Given that tokens are currently only available to EU users, uncertainty regarding the SEC's stance on this matter remains. SIFMA has urged the SEC to reject trading of tokenized equities outside of the Regulation NMS framework, citing risks to market stability.
Robinhood's initiative in creating Robinhood Chain could significantly alter the landscape of stock trading, offering new opportunities and re-evaluating approaches to liquidity. However, the challenges related to regulation and volatility in new platforms require further analysis.
