Robinhood CEO Advocates Tokenization of U.S. Stocks to Prevent Future Market Crises
Robinhood CEO Vlad Tenev has proposed tokenizing U.S. stocks as a solution to prevent another GameStop-style trading crisis. Citing the limitations of the current two-day settlement system, Tenev argued that real-time settlement via blockchain could reduce collateral demands and market volatility. "Tokenization is inevitable," he stated, emphasizing its potential to slash costs and enable 24/7 trading.
The 2021 GameStop saga exposed critical flaws in legacy infrastructure when Robinhood faced $3 billion in collateral calls amid frenzied retail trading. While regulators have since shortened settlement to one day, Tenev contends this remains inadequate for modern markets. Tokenized stocks, he suggests, WOULD eliminate settlement risk entirely while unlocking liquidity.
This push aligns with growing institutional interest in blockchain-based equity trading. Proponents note tokenization could democratize access while maintaining regulatory compliance—a balancing act traditional systems struggle to achieve during periods of extreme volatility.