Robinhood opens the era of tokenized trading, is the brokerage industry facing a major reform?

Robinhood (HOOD.US) is making moves again. The company is attempting to change another part of the financial landscape through stock tokenization and the tokenization of other underlying assets. This has caused the company's stock price to soar, rising 18% over the past three trading days and breaking the $100 mark for the first time (up 163% year-to-date). The timing is perfect, as the Chairman of the U.S. Securities and Exchange Commission, Paul Atkins, has referred to tokenization as "innovation" and vowed to end "regulation by enforcement" by establishing "clearer rules." Robinhood's initial success came from launching commission-free trading services, which disrupted the traditional brokerage model and prompted nearly all competitors to drop fees to zero. But this is not the end. The success of small-cap stock trading and becoming one of the first mainstream brokerages to offer cryptocurrency trading allowed Robinhood to go public in the summer of 2021, driven by a trading boom fueled by the pandemic. Since then, the company has expanded into other financial products, such as credit cards and banking services, prediction markets, and investment advisory services, but its latest initiative directly targets the core areas of the entire industry. Recently, Guosheng Securities also released a research report stating that Robinhood announced the launch of tokenized U.S. stock and ETF trading in Europe, signaling that the advancement of U.S. stock tokenization will accelerate. This is expected to further push regulators to follow suit and promote the implementation of regulatory policies related to U.S. stock tokenization. In today's fast-paced regulatory environment, the market is no longer satisfied with the returns from tokenized government bonds and is instead pursuing more flexible stock tokenization. Traditional financial institutions and cryptocurrency firms, represented by BlackRock, are actively advising regulators to promote the implementation of U.S. stock tokenization in the American market. Robinhood CEO Vlad Tenev stated in a blog program, "In the long run, we are building the world's leading financial ecosystem. This includes expanding Robinhood from a business focused solely on the U.S. market to a comprehensive global business, and from a business focused only on retail customers to one that serves enterprises and institutions. This involves some very interesting platform-related issues, such as tokenization." Why use tokens? Tenev stated that this approach helps extend stock trading from the current 24/5 working model to a 24/7 model and introduces DeFi functionalities such as lending and borrowing, swapping, staking, and self-custody. While Robinhood is currently using Arbitrum, it plans to build a custom Layer 2 network based on Ethereum to support tokenized stocks, allowing global users to trade using stablecoins. Meanwhile, trading private company stocks is another area where tokenization can achieve widespread participation. It could even achieve similar effects to the promotional giveaway that Robinhood just conducted for the tokens of SpaceX and OpenAI, although this situation encountered some setbacks after the latter made a statement on X