Against the backdrop of a sun-drenched Cannes on the French Riviera, Robinhood hosted its first crypto keynote in Europe, using the occasion to outline a broader vision for integrating digital assets with traditional financial services.
On June 30, Robinhood Crypto announced a suite of new products for its European and US customers. These include the rollout of perpetual contracts trading for EU users, the expansion of the EU Robinhood app into markets such as France, Germany and Bulgaria, and the forthcoming introduction of tokenised stock trade.
During his remarks as CEO Vladimir Tenev promised a “glimpse of a better future that’s possible when crypto and traditional finance services fully merge”.
European users of Robinhood Crypto will, for the first time, gain access to US tokenised equities (ETF tokens), making Robinhood the first US-based financial services firm to offer this type of product to retail customers in Europe.
How it works, what this means
Alongside ETF tokens becoming available to EU customers, Robinhood’s tokenised stock offering enables European users to access US equities through blockchain-based representations of traditional shares. The process involves connecting with a US brokerage and conventional financial markets to complete the underlying trade.
Once the transaction has been executed, Robinhood’s tokenisation engine generates a corresponding token – one per share – which is credited to the customer’s Robinhood account. For example, if a European customer were to buy $100 worth of Apple stock, the customer would receive 100 tokenised Apple stock tokens into their Robinhood account.
Each token is backed by an actual share purchased in the U.S. market, functioning as a digital representation of that holding. By linking traditional equities to blockchain-based tokens, this approach may offer a practical path for wider adoption of tokenized stock trading within existing financial frameworks.
Tokenisation has been one of the more widely accepted blockchain applications within traditional finance, with real-world assets such as bonds, mortgages, and loans increasingly being issued as tokens on the blockchain.
However, applying the same process to stock trading has been more challenging. Interfaces have often lacked usability, transaction times have been slow, and the overall experience has created friction for users, resulting in slower adoption of tokenised stock offerings than initially anticipated.
Robinhood is aiming to address these challenges by creating a simplified user experience which mirrors traditional equity trading, while operating on blockchain infrastructure. The platform is designed to require little to no familiarity with DeFi or crypto-specific processes.
“I believe that tokenisation is going to open the door to a massive trading revolution, making it possible to own or even fractionally own, all kinds of real-world assets and financial instruments that were never accessible or tradeable by most people before,” said Tenev at the ‘To Catch a Token’ event in Cannes yesterday.
“There’s been a lot of talk about this for years, including from me, and more recently from some of our competitors, but not a lot of action. That ends today. Literally right now.
“We’re really excited to announce that it is now possible for our European customers to get exposure to hundreds of major US stocks, like Apple and Amazon, in addition to ETFs, in tokenised form, all on chain, with thousands more coming by the end of the year.”
Phase Two and Three – Introduction of Bitstamp
This is just Phase 1 according to Tenev, who revealed customers will be able to access phase two in the next few months; Phase 2 will see the introduction of Bitstamp.
In June 2024, Robinhood acquired the longest-running cryptocurrency exchange Bitstamp in a move that solidified the company’s crypto and blockchain ambitions. The major acquisition also served as Robinhood Crypto’s entry into the European market.
What Bitstamp will enable for Robinhood’s tokenised stock offering is to send stock transactions through to the crypto exchange on weekends, when the traditional stock markets are closed and will not be able to process transactions from Robinhood.
Bitstamp also enables simplified crypto trading on the Robinhood Crypto app for its European customers which Tenev described as offering “the best of both worlds”, tokenised stock trading on weekdays, and crypto trading on weekends.
“But that’s not all,” said Tenev. “Phase three is when things really start to cook.”
The Robinhood CEO confirmed within the next few months, European Robinhood Crypto users will be able to migrate their tokenised stocks into other self custodial wallets, enabling them to integrate them within their preferred blockchain networks.
Tenev explained these stock tokens could be used for collateralised lending or borrowing, as well as swapping these tokens from within a self custodial wallet with an art broker, or a real estate broker, etc.
This could prove to be a seismic move from Robinhood as moving tokenised stocks to be directly swapped or sold to other blockchain network users could be the next step in how DeFi stands on its own as a vehicle for stock trading.
