As reported by Bloomberg News, Robinhood is creating blockchain facilities through which European retail investors would be able to trade in US securities. According to the May 7 report, the brokerage is seeking to establish cooperation with firms operating in the digital assets market. Which includes Arbitrum and Solana as the possible layers for the project.
European Market Entry
The plan is a way to diversify Robinhood’s presence in the continent beyond its current focus on trading in cryptocurrencies. In April the company attained a brokerage license in Lithuania which permits it to trade in stocks in the EU member countries. It has also agreed to purchase the European crypto exchange Bitstamp that will enable Robinhood access to a trading platform. Which is registered under the Markets in Financial Instruments Directive (MiFID) to offer crypto-linked derivatives.
Tokenized Securities Approach
The structure being built would be a public blockchain for US equities for audiences in Europe. It may also mean shorter time to settlement, cheaper and more transparent trading processes all through the trade life cycle. Robinhood CEO Vlad Tenev offered his blessings to tokenized securities in a letter to investors in February 2021.
Technology Considerations
The decision between Arbitrum and Solana would change the platform’s characteristics. This means throughput, cost per transaction, smart contract capabilities, and compatibility with Ethereum.
