- Robinhood CEO Vlad Tenev said the company will soon allow stock tokens to be redeemed 1:1 for real shares.
- The company also plans to give stock-token holders voting rights, which they do not currently have.
- Robinhood crypto head Johann Kerbrat said stock-token TVL has exceeded $170 million and cumulative decentralized-exchange volume on Robinhood Chain has neared $50 billion.
Robinhood CEO Vlad Tenev said the company will soon add a feature allowing customers to exchange stock tokens for real shares on a 1:1 basis. The planned feature matters because holders currently cannot redeem the tokens directly for shares or exercise voting rights, which Robinhood also intends to add.
Robinhood’s head of crypto, Johann Kerbrat, said total value locked in the platform’s stock tokens has exceeded $170 million. He added that cumulative trading volume on decentralized exchanges operating on Robinhood Chain has neared $50 billion.
How Robinhood stock tokens work
According to Kerbrat, Robinhood backs each stock token 1:1 with a real share and holds the underlying securities in custody. When Robinhood issues a new stock token, it simultaneously purchases the corresponding share, he said.
Token holders receive the economic equivalent of dividends and the outcomes of corporate actions through reinvestment into their assets, according to Kerbrat. They cannot currently convert the tokens directly into real shares and do not have voting rights.
Kerbrat said Robinhood is working on the 1:1 redemption feature and has placed voting rights on its roadmap. He said the company already has the infrastructure needed to introduce the functionality, including Say by Robinhood, a platform that allows investors to participate in votes and other corporate processes.
Tokenization and market access
Kerbrat also highlighted the technological composability of stock tokens, saying developers can use them as a foundation for new products and services. He expects the number of such offerings to increase as stock tokens gain wider adoption.
Tokenization could also broaden access to U.S. investment assets, Kerbrat said. According to him, billions of people worldwide currently lack access to the U.S. stock market, while stock tokens allow eligible customers to access such assets with a smartphone and an internet connection.
Tenev previously argued against giving share issuers the right to block the tokenization of their stock.
Source: Incrypted
