Five years following the volatile GameStop short squeeze, an event that sharply highlighted the operational risks inherent in outdated market plumbing, Robinhood CEO Vlad Tenev is championing a radical overhaul: migrating traditional stock trading onto blockchain technology. Tenev argues that tokenizing equities and enabling continuous, 24/7 trading on-chain is the necessary evolution to prevent future market failures rooted in delayed settlement.
The 2021 GameStop crisis saw Robinhood face enormous collateral demands from clearing houses due to the two-day (T+2) settlement period, forcing the brokerage to halt purchasing for certain volatile stocks. Tenev insists that blockchain’s ability to facilitate instantaneous settlement (T+0) removes this systemic risk entirely. By converting traditional securities into tokens that can be traded and settled atomically on a distributed ledger, market participants would no longer need to rely on central clearing mechanisms for managing counterparty risk across multi-day settlement cycles.
This vision extends beyond risk management, promising significant improvements in market accessibility. Shifting to an on-chain structure would abolish the conventional market hours, allowing investors worldwide to trade assets continually, aligning the equity market infrastructure with the always-on nature of digital finance and cryptocurrency trading. While the technical feasibility of tokenization is increasingly proven, the adoption faces massive regulatory hurdles, requiring significant alignment with bodies like the SEC regarding custody, transparency, and market surveillance in a decentralized context. Robinhood’s outspoken advocacy positions the firm as a key player pushing for the full integration of distributed ledger technology into core capital markets infrastructure.
Source: Five years after the GameStop saga, Robinhood CEO wants tokenized stocks to trade onchain 24/7
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