Robinhood CEO Says Tokenized Stocks Could Prevent Trading Freezes

According to a ChainCatcher report, Robinhood CEO Vlad Tenev stated that tokenized stocks have the potential to alleviate or even prevent trading freezes that frequently occur in traditional exchanges, and their adoption in the U.S. market is "almost inevitable." In a post on X, Tenev reflected on the 2021 trading freeze involving meme stocks like GameStop, which he described as one of the most significant systemic failures in the stock market in recent years. He attributed the issue to the then-lengthy stock settlement cycle and complex clearing rules. Tenev noted that although the U.S. stock settlement cycle has been reduced from two days to one, during Fridays or long holidays, settlement can still be extended to three to four days, leaving systemic risks intact. He argued that tokenizing stocks on a blockchain could enable real-time settlement, thereby reducing the risk exposure of clearinghouses and brokers, and alleviating market pressure during periods of high volatility. Tenev also emphasized that with the U.S. Securities and Exchange Commission (SEC) exploring tokenized securities and Congress advancing the "CLARITY Act," the current moment is a crucial window for establishing a regulatory framework for stock tokenization.