Jakarta, Pintu News – Robinhood, an American-based financial services company, is developing a platform that allows European investors to access US stocks through tokenization.
This step was taken to ease access and improve liquidity of the US stock market in Europe.
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Robinhood has announced plans to expand its reach into the European market by offering tokenized US stocks. Robinhood CEO, Vlad Tenev, stated that it is currently tough for investors outside the US to invest in US companies.
With this new platform, Robinhood aims to change that situation by providing access 24 hours a day, seven days a week. The platform under development will use blockchain technology, with Solana and Arbitrum as the leading candidates for the tokenization layer.
The final decision on blockchain is still under wraps, but both technologies are known for their transaction speed and efficiency. This partnership is expected to strengthen Robinhood’s position in the digital finance industry.
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Stock tokenization offers several significant advantages compared to the traditional stock trading system. First, it allows for higher liquidity, as shares can be bought and sold outside the exchange’s regular business hours. Second, tokenization reduces entry barriers for small investors as it allows the purchase of shares in smaller fractions.
In addition, blockchain can significantly improve transaction transparency and security. Every transaction is permanently and irreversibly recorded, reducing the risk of fraud and market manipulation. This is a step forward in combining traditional finance with blockchain technology, which could open up the US market to millions of new investors in Europe.
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Robinhood has secured a broker license in Lithuania, an essential step in their European expansion. Precise regulation under MiCA (Markets in Crypto-Assets) in the European Union provides the legal certainty needed to proceed with this innovation. This demonstrates Robinhood’s commitment to complying with local regulations and ensuring their platform is safe for investors.
With the adoption of stock tokenization, it is expected that the use of the chosen blockchain, be it Solana (SOL) or Arbitrum, will increase. This will increase transaction fees and adoption of such technology. The move could also set a precedent for other companies to follow a similar model, expanding access to global financial markets through new technology.
With this initiative, Robinhood is not only expanding its reach but also strengthening the US market’s dominance on the global scene. The stock tokenization platform is expected to revolutionise the way Europeans invest in the US stock market, making it more inclusive and accessible. This is a big step towards a more integrated and digitized financial future.
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