Robinhood Proposes Tokenization Trading to the SEC

Robinhood, the popular online brokerage platform, has submitted a proposal to the U.S. Securities and Exchange Commission (SEC). According to the proposal , Robinhood intends to create a federal framework supporting tokenizing real-world assets (RWAs) . This proposal aims to make U.S. securities markets more modern, efficient, transparent, and accessible. Robinhood RRE Will Use Off-Chain and On-Chain Settlement Likewise, Robinhood’s vision is to create a Real-World Asset Exchange (RRE). This platform combines the advantages of blockchain technology with traditional finance. The exchange will use off-chain matching to allow quick and efficient trades and on-chain settlement to ensure clear, secure records of ownership and transactions. This hybrid model aims to solve a key challenge in financial innovation: combining the speed of traditional trading systems with the transparency of blockchain technology. It does this by processing order matching off-chain, allowing quick trading like conventional exchanges. At the same time, using blockchain for trade settlement provides secure and transparent records that regulators and investors can access. If approved, Robinhood’s plan could allow many types of assets, such as real estate, bonds, commodities, and even art, to be represented and traded as digital tokens on blockchain technology. Tokenization is Not Just a Side Experiment Furthermore, the SEC’s approval would indicate that tokenization is a legitimate and regulated part of financial markets, not just a side experiment. This approval would encourage other countries to consider similar approaches, helping the U.S. maintain its status as a fintech innovation leader. Recall that Fidelity Investments joined the asset tokenization race by filing to register a blockchain version of the U.S. dollar money market fund. If it gains regulatory approval, Fidelity hopes to jostle with BlackRock. As per the filing, the asset manager seeks to register an on-chain share class of Fidelity Treasury Digital Fund (FYHXX) and utilize blockchain as a transfer agent. If the SEC nods, the product could become effective on May 30. Growing Competition in the Tokenized U.S. Treasuries Market Interestingly, global banks and asset managers have begun to make a shift as they put traditional financial instruments like credit, government bonds, and funds on blockchains. This development, tokenizing RWAs, aligns with their quest for operational efficiency and 24/7 settlements. Another notable leader, BlackRock, in collaboration with digital asset firm Securitize, launched a tokenized T-bill fund termed BUIDL in March 2024. The product has grown to approximately $1.5 billion in assets. Meanwhile, Franklin Templeton’s fund, the first to debut on the on-chain money market, raked in $689 million in assets since its launch in 2021. The post Robinhood Proposes Tokenization Trading to the SEC appeared first on TheCoinrise.com .

Source: The Coin Rise