GameStop 2.0? Why Robinhood’s CEO Claims Tokenization Is the Only Fix for Trading Halts
The way forward for the fairness market infrastructure has as soon as once more been debated by Robinhood CEO Vlad Tenev, who believes that tokenized shares are the greatest option to keep away from buying and selling halts corresponding to these skilled throughout the GameStop frenzy in 2021.
In a publish on X, Tenev referred to the incident as one in every of the most obvious failures of contemporary fairness markets, however not resulting from misconduct by the dealer and as an alternative resulting from the previous settlement mechanics, which couldn’t survive excessive volatility.
Five years prior, Robinhood and a number of other different brokerages needed to restrict purchases in a restricted checklist of the most actively traded meme shares, most notably GameStop.
The motion went off a market backlash by retail buyers who felt sidelined in the market at a pivotal time.
Tokenized Stocks Could Replace a Broken Settlement System, Tenev Says
Tenev attributed the pause to clearinghouse risk-management laws that had been associated to the two-day settlement cycle of U.S. equities, which was then thought of as the normal.
Since trades weren’t settled on the spot, brokers needed to depart an enormous quantity of collateral to deal with counterparty danger.
As the buying and selling volumes and worth actions elevated exponentially, these deposit calls for jumped icily, and corporations might do little however prohibit the exercise.
Robinhood has since advocated extra fast settlement, which additionally helped to impact the industry-wide T+2 to T+1 settlement in the United States.
Although the change alleviated a few of the stress, Tenev indicated that the basic situation was not resolved.
Practically, a T+1 system might nonetheless lengthen into days round weekends and holidays, leaving markets weak to the fast-flowing information and social-media-based buying and selling.
It is towards this background that Tenev remarked that tokenization is a sort of structural substitute and never a peripheral answer. Tokenization includes issuing shares as blockchain-based tokens that settle in close to actual time.
With atomic or on the spot settlement, trades now not carry multi-day counterparty danger, lowering the want for clearinghouses to demand massive collateral buffers and reducing the chance of sudden buying and selling restrictions.
Tenev additionally pointed to further options corresponding to steady, 24-hour buying and selling, native fractional possession, and a clear ledger of possession as potential benefits.
Robinhood Bets on Tokenized Stocks as Regulators Clarify Rules
Robinhood has already examined this mannequin exterior the U.S. In Europe, the firm presents greater than 2,000 tokens representing U.S.-listed shares and exchange-traded funds, giving buyers publicity to cost actions and dividends.
On-chain knowledge cited by tokenization trackers shows that Robinhood has minted almost 2,000 such inventory tokens value slightly below $17 million, a comparatively small determine in contrast with different tokenization platforms whose choices exceed $500 million.
In the coming months, Robinhood has said that it’s going to proceed to construct these merchandise, together with around-the-clock buying and selling and decentralized finance, together with self-custody and lending.
The shift comes as tokenization in conventional finance positive factors momentum, with the New York Stock Exchange in January preparing to assemble a digital platform to commerce and on-chain settle tokenized securities, topic to regulatory approval.
The @NYSE plans to launch a platform for buying and selling and on-chain settlement of tokenized securities.#NYSE #Tokenization https://t.co/Aklx0Cy1RP
— Cryptonews.com (@cryptonews) January 19, 2026
Nasdaq has also prioritized tokenized equities; it has submitted a rule change utility whereby on-chain representations of listed shares may be traded in line with present market construction guidelines.
On their half, regulators have emphasised that tokenization has no influence on the authorized standing of a safety.
The SEC once again confirmed that tokenized securities are subject to the federal securities laws, whether or not saved on a blockchain or a traditional ledger.
Pivotal December was adopted by the SEC announcing a rare no-action letter against the Depository Trust Company, making a pilot to tokenize 2026 U.S. Treasuries, important ETFs, and Russell 1000 shares.
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