Robinhood launched the public testnet of Robinhood Chain on July 11, a Layer-2 network built on Arbitrum tailored for tokenized real-world assets (RWA). The chain aims to support on-chain financial services including tokenized stock trading, perpetual contracts, and lending protocols, using Chainlink as its oracle.
From Selling Crypto to Selling Stocks on Blockchain
The move comes as Robinhood's crypto revenue slumped. Fourth-quarter earnings showed crypto transaction revenue dropped 38% year-over-year to $221 million, dragging the stock down 8% in after-hours trading. The company's previous model—earning fees from retail investors buying and selling Bitcoin and other coins—proved vulnerable to market downturns.
CEO Vlad Tenev said in late January that tokenization will unlock 24/7 markets, and once investors get used to round-the-clock trading, they "will never go back". He also framed tokenization as a solution to prevent a repeat of the 2021 GameStop saga: if stocks settle on-chain instantly, brokerages won't have to restrict trades due to T+1 settlement delays.
Why Arbitrum?
Robinhood chose Arbitrum over building its own independent chain. Arbitrum boasts over $2.3 billion in total value locked, mature developer tooling, and a vast DeFi ecosystem. Its Stylus technology allows smart contract development in C++, Rust, and Python, not just Solidity. By outsourcing technical risk to Offchain Labs, Robinhood can focus on product and compliance.
The testnet currently offers basic features: network access, developer docs, and compatibility with standard Ethereum tools. In coming months, it will add testnet tokenized stocks, direct wallet integration, and more partner infrastructure. Mainnet launch is still months away.
Three-Phase Roadmap: From Custody to Self-Custody
Robinhood's tokenization strategy follows three phases, with Robinhood Chain as the final-layer foundation. Phase one completed in June 2025: tokenized stock trading in Europe covering over 200 US stocks and ETFs, 24/5 availability. It now spans nearly 800 securities across 31 EU/EEA countries. Phase two is underway: expanding to private equity and other non-public assets. Phase three aims for fully permissionless tokenized assets—users can withdraw tokenized stocks to external wallets and use them in DeFi protocols for cross-platform trading.
If executed fully, Robinhood would transform from a stock-buying app into a protocol where stocks flow freely on-chain. But competitors offering similar services are not idle.
Regulatory Hurdles in the US
Tokenized stocks remain regulated securities regardless of the underlying chain. Tenev acknowledged that US adoption requires Congress to pass legislation like the CLARITY Act, enabling the SEC to set rules for tokenized securities. Until then, American users can only watch European peers enjoy 24/5 trading.
The direction is clear: the blockchain competition in 2026 is not about decentralization but about how fast traditional financial assets can be moved on-chain.