SEC Petition by Robinhood for Regulation of Digital Asset Tokens
In the ever-evolving world of finance, Robinhood is making strides towards democratizing capital access by proposing a unified regulatory framework for tokenized real-world assets (RWAs). This includes private stocks, a market previously inaccessible to many retail investors due to regulatory hurdles.
The proposal, known as the Real World Asset Exchange (RRE), envisions a hybrid infrastructure for trade execution off-chain and settlement on-chain. This system is designed to treat tokenized assets like stocks or bonds, not synthetic derivatives, differentiating it from current regulations.
Robinhood's approach involves issuing blockchain-based token "twins" of assets, representing fractional ownership via special purpose vehicles (SPVs) that hold the underlying equities. These tokens operate primarily on the Ethereum-based Arbitrum network and Robinhood's own planned Layer 2 "Robinhood Chain," designed for greater control, scalability, and compliance enforcement with Know Your Customer (KYC) and whitelist-based permissioning.
The company is actively engaging with U.S. regulators to adapt securities and accreditation laws to allow tokenized private markets. This effort is emphasized by CEO Vlad Tenev during mid-2025 earnings calls. Robinhood is also planning to establish a proprietary blockchain to better tailor tokenized RWA infrastructure in compliance with U.S. regulatory standards.
Key developments include the launch of European tokenized equities product lines, signaling readiness and market demand. However, there has been some controversy regarding unauthorized token offerings of companies like OpenAI and SpaceX.
If approved, the RRE system could potentially simplify the regulatory landscape for tokenized assets in the U.S., allowing broker-dealers to handle these assets using existing regulatory structures, offering clearer legal pathways for institutional players.
The global market for RWAs is projected to reach $30 trillion by 2030, as interest in tokenized finance continues to grow. If the RRE framework is implemented, it could lay the foundation for a legally compliant blockchain-based securities market in the United States.
However, it's important to note that as of mid-2025, Robinhood's proposal is progressing collaboratively with U.S. regulators but is not yet finalized. The company continues building infrastructure and advocating for updated laws that enable tokenized securities trading while ensuring investor protection and compliance.
The RRE model also includes integration of KYC and Anti-Money Laundering (AML) measures via partners like Jumio and Chainalysis, ensuring that the system maintains robust anti-fraud and anti-laundering measures.
Robinhood's goal is to democratize capital access by enabling ordinary investors to gain exposure to tokenized private and public equity markets within a compliant, secure framework. The company is positioning itself as a frontrunner ready to meet compliance as regulatory clarity emerges.
Forbes reported on Robinhood's proposal, signaling growing momentum towards clearer rules that support innovation while maintaining investor protections. The SEC has not yet responded to Robinhood's proposal, but the initiative underscores the potential for a transformative shift in the financial landscape.
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