Five years after Robinhood (HOOD) shocked users by halting trading in GameStop (GME) and other meme stocks, CEO Vlad Tenev says blockchain-based stocks could help ensure this never happens again.
In a post on X marking the anniversary of the January 2021 trade freeze, Tenev blamed the chaos not on bad actors, but on poor infrastructure. “What happens when you combine slow, outdated financial infrastructure with unprecedented trading volume and volatility in a small number of stocks?” he wrote. “Massive deposit requirements, trading restrictions, and millions of unhappy customers.”
At the time, Robinhood and other brokers faced huge collateral demands due to the industry’s two-day trade settlement system. To stay in business, Robinhood raised more than $3 billion in emergency funding. “Retail investors who wanted to buy Gamestop were understandably furious,” Tenev continued.
Although regulators later shortened the cycle from T+2 to T+1, meaning a one-day settlement, Tenev says it’s still not fast enough. “In a world of 24-hour news cycles and real-time market reactions, T+1 is still too long,” he said, noting that Friday trades can still take days to settle.
Your solution: move actions within the chain. “Tokenization refers to the process of converting an asset, such as a stock, into a token that lives on a blockchain,” Tenev wrote. “The absence of a long settlement period means much less risk to the system and less pressure on both clearinghouses and brokerages, so clients can freely trade however they want, whenever they want.”
Robinhood was one of the first major players to adopt tokenized stocks. According to data from Entropy Advisors on Dune Analytics, the company has minted nearly 2,000 tokenized versions of US stocks and ETFs, totaling just under $17 million, according to RWA.xyz. That’s still far behind tokenization leaders xStocks and Ondo Global Markets, whose offerings each exceed $500 million.
“In the coming months, we are planning to unlock 24/7 trading and access to DeFi,” Tenev wrote, noting future features such as self-custody, lending, and staking.
But for U.S. markets to follow suit, he said, regulators must act. Tenev urged lawmakers to pass the CLARITY Act, which would force the SEC to write rules for tokenized stocks. “Let’s seize the moment,” he said, “and unlock real-time settlement for retail traders once and for all.”
