Robinhood has sent the SEC a 42-page request asking for a national framework to oversee tokenized real-world assets (RWAs). The goal of the proposal is to update the process of issuing, trading and settling securities by combining blockchain methods with existing securities law.
The opportunity for $30 Trillion
It focuses on a possible $30 trillion market by making legal rules where digital tokens for equities, bonds and real estate work like the actual instruments they stand for.
Ending Fragmentation
Tokenization of RWA has so far been done in small, separated programs and pilot schemes, despite the strong development in the field. Robinhood believes that the same federal rules should apply so broker-dealers can start issuing and exchanging tokenized securities easily.
Trading of real assets in the market
The initiative involves developing the Real World Asset Exchange (RRE) which offers trade matching off-chain and settles those trades on-chain. KYC and AML tools from Jumio and Chainalysis would be included in the platform to make sure regulations are met.
Regulatory Bridge
Robinhood believes that tokenized assets should be treated as the same as traditional financial products, rather than as derivative or made-up instruments. The company does not aim to create new blockchain technology, but instead wants to make sure tokenized finance respects existing regulations.
Comprehensive Proposal
Even though the SEC has not spoken on the matter yet, Robinhood’s filing is among the clearest attempts by a major American broker to bring tokenized RWAs to regular finance. How this new industry does depends on how regulators view it and how many institutions take part.
