When Robinhood introduces tokenized equities in the EU, it draws the attention of private companies and regulators.
Since launching its stock token platform in the European Union last week, Robinhood has seen a spike in demand from private companies looking to tokenize their shares.
CEO Vlad Tenev told Bloomberg News in an interview on Tuesday that the company has been inundated with requests from private companies seeking to make their shares available to retail investors via blockchain-based tokens on their platform.
“Since our announcement, I’ve received many inquiries from private companies who genuinely want to reach retail to tokenize their shares and participate in this revolution,” he stated.
The platform provides over 200 tokenized US stocks trading five days a week; however, it is currently only accessible in the EU. A promotional gift of non-tradable tokens representing private businesses like OpenAI and SpaceX was also part of it.
Tenev stated that adding thousands of private businesses to the marketplace is Robinhood’s long-term objective. The fact that these large corporations are remaining private longer is one of the most significant disparities in the capital markets, and he stated that we think [this] is a great chance to address it,” he said.
The tokenized platform of Robinhood is under investigation.
But the rollout has come under fire. The EU regulator of Robinhood, the Bank of Lithuania, asked for further information about the tokens’ structure. According to Tenev, the company is happy with the review.
Since it’s a novel and inventive offering, they want to ensure everything is in order. We have faith. In our opinion, these are significant and capable of withstanding the most intense scrutiny,” he stated.
According to the EU’s Markets in Crypto-Assets Regulation (MiCA) and Markets in Financial Instruments Directive (MiFID) rules, the tokens are officially considered derivatives. Tokens are created or destroyed when users buy or sell, and underlying assets owned by US brokers support them.
Tenev acknowledged that the platform is not yet accessible in the US and the UK, but the company is in talks with regulators in those countries. He asserts that the US Securities and Exchange Commission (SEC) can approve tokenization without the need for new laws.
“The United States shouldn’t lag.” It is too big an opportunity to pass up, not only for institutional but also for retail. And they seem eager toward me. We have actively engaged in the tokenization roundtables hosted by the SEC,” he declared.
The concentrated liquidity and activity that give large TradFi exchanges like the NYSE their advantage are directly challenged by Robinhood’s tokenization strategy, which removes assets from traditional market routes and places them on-chain, according to Galaxy Digital.
The tokenization market continues to flourish.
As the movement to move assets onto the blockchain gains momentum, Robinhood will tokenize its assets.
On Tuesday, an unknown institutional investor provided BioSig Technologies, a company listed on the Nasdaq, with up to $1.1 billion in funding to promote its proposal to tokenize the commodities market. The transaction includes a $1 billion equity line of credit and $100 million in senior secured convertible debentures.
In other developments, the Dubai Financial Services Authority (DFSA) has approved the QCD Money Market Fund (QCDT), a joint venture between DMZ Finance and QNB. This makes it the first tokenized money market fund launched in the Dubai International Financial Centre (DIFC).
