Robinhood has declared the launch of tokenized stock trading for its European users, granting them access to shares of leading US companies.
Tokenized Stock Trading
Now, 150,000 Robinhood customers across 30 countries can trade tokenized stocks which reflect the value of shares of well-known American companies. Trading will be available 24/5. The tokens will be issued on the Arbitrum blockchain, although customers won't gain voting rights; they will still receive dividends and participate in corporate actions.
Technological Basis and Future
Robinhood utilizes Arbitrum, a Layer 2 network built on Ethereum, for issuing the tokens. In the future, the company plans to launch its own blockchain to handle these transactions. Until now, European users could only trade cryptocurrencies through Robinhood, making this the first access to stocks via blockchain.
Industry Trends and Competition
Other industry players, such as Kraken, also plan to implement tokenized securities. Tokenizing equities is a more complex task compared to other assets, requiring consideration of numerous factors like mergers, shareholder votes, and dividend distributions. Legal tokenization in the US may soon become available.
The launch of Robinhood's tokenized stock trading in Europe opens new opportunities for traders and highlights the relevance of tokenization in the financial industry.
