US Risks Losing Tokenization Leadership to Overseas Rivals

The US risks losing its position as a leader in next-generation financial market infrastructure if it doesn't establish a regulatory framework for tokenized stocks. This is according to Robinhood CEO Vlad Tenev, who wrote on X that global financial markets have entered the early stages of a 'tokenization supercycle'. He argued that tokenization involves rebuilding the underlying financial infrastructure, enabling real-time settlement and seamless asset transfers between firms.

Tenev pointed to the 2021 GameStop episode as evidence that the current settlement system can be strained during market stress. The US stock market's settlement cycle has already been shortened from T+2 to T+1, but blockchain-based infrastructure could further reduce risks and collateral burdens. This could also enable a 24/7 trading environment.

RH is expanding its tokenized stock business outside the US, offering products tied to over 190 US stocks in more than 120 countries. However, US rules governing securities trading, custody, clearing, and shareholder rights remain major obstacles to broader adoption of tokenized stocks. Tenev urged policymakers to move quickly to update the rules.