Robinhood Financial: Difference between revisions
added citations more to come |
m citations |
||
| Line 27: | Line 27: | ||
:Robinhood's shares are blockchain-based representations of traditional stocks or private equities. Tokens mirror the price movements of the underlying assets but do not confer legal ownership of the actual shares. Instead, they function as synthetic derivatives, offering exposure to the asset’s value without traditional shareholder rights like voting or dividends.<ref name=":6">{{Cite web |last=Harris |first=Ainsley |date=July 14, 2025 |title=What are ‘tokenized’ stocks, and why are trading platforms like Robinhood offering them? |url=https://www.fastcompany.com/91364041/tokenized-stok-trading-platforms-robinhood |website=Fast Company}}</ref><ref name=":7">{{Cite web |last=O'Brient |first=Samuel |title=Robinhood has rolled out 'tokenized' stocks and ETFs. Here's what to know about the crypto-like assets. |url=https://www.businessinsider.com/what-is-tokenization-robinhood-openai-spacex-stocks-crypto-blockchain-hood-2025-7 |website=Business Insider}}</ref><ref name=":8">{{Cite web |last=Moukhtarzade |first=Darius |title=Turning Stocks into Tokens, Why its Cool but Complicated |url=https://www.21shares.com/en-us/research/turning-stocks-into-tokens-why-its-cool-but-complicated |website=21Shares}}</ref> | :Robinhood's shares are blockchain-based representations of traditional stocks or private equities. Tokens mirror the price movements of the underlying assets but do not confer legal ownership of the actual shares. Instead, they function as synthetic derivatives, offering exposure to the asset’s value without traditional shareholder rights like voting or dividends.<ref name=":6">{{Cite web |last=Harris |first=Ainsley |date=July 14, 2025 |title=What are ‘tokenized’ stocks, and why are trading platforms like Robinhood offering them? |url=https://www.fastcompany.com/91364041/tokenized-stok-trading-platforms-robinhood |website=Fast Company}}</ref><ref name=":7">{{Cite web |last=O'Brient |first=Samuel |title=Robinhood has rolled out 'tokenized' stocks and ETFs. Here's what to know about the crypto-like assets. |url=https://www.businessinsider.com/what-is-tokenization-robinhood-openai-spacex-stocks-crypto-blockchain-hood-2025-7 |website=Business Insider}}</ref><ref name=":8">{{Cite web |last=Moukhtarzade |first=Darius |title=Turning Stocks into Tokens, Why its Cool but Complicated |url=https://www.21shares.com/en-us/research/turning-stocks-into-tokens-why-its-cool-but-complicated |website=21Shares}}</ref> | ||
;Backing mechanism | ;Backing mechanism | ||
:Actual shares are held in custody (for public stocks) or partners with brokers to back tokens with real securities. The tokens are synthetic claims tied to price performance, not equity for private companies.<ref name=":6" /><ref name=":8" /><ref>{{Cite web |title=Robinhood Faces Regulatory Scrutiny Over Tokenized Private Company Stock |url=https://www.ledgerinsights.com/robinhood-faces-regulatory-scrutiny-over-tokenized-private-company-stock/ |website= | :Actual shares are held in custody (for public stocks) or partners with brokers to back tokens with real securities. The tokens are synthetic claims tied to price performance, not equity for private companies.<ref name=":6" /><ref name=":8" /><ref name=":10">{{Cite web |title=Robinhood Faces Regulatory Scrutiny Over Tokenized Private Company Stock |url=https://www.ledgerinsights.com/robinhood-faces-regulatory-scrutiny-over-tokenized-private-company-stock/ |website=ledgerinsights.com}}</ref> | ||
;Trading | ;Trading | ||
:Tokenized shares trade 24 hours a day five days a week on Robinhood’s platform via Arbitrum, an Ethereum Layer-2 blockchain.<ref name=":9">{{Cite web |last=Patrick |first=Thompson |date=July 10, 2025 |title=Tokenized stocks explained: How Robinhood opened US markets |url=https://coingeek.com/tokenized-stocks-explained-how-robinhood-opened-us-markets/ |website=CoinGeek}}</ref><ref>{{Cite web |last=Mazza |first=Rosalia |date=July 5, 2025 |title=Robinhood Tokenization Push Redefines Market Hours and Investor Access |url=https://www.fintechweekly.com/magazine/articles/robinhood-tokenization-stock-trading-eu-arbitrum |website=FinTech Weekly}}</ref> | :Tokenized shares trade 24 hours a day five days a week on Robinhood’s platform via Arbitrum, an Ethereum Layer-2 blockchain.<ref name=":9">{{Cite web |last=Patrick |first=Thompson |date=July 10, 2025 |title=Tokenized stocks explained: How Robinhood opened US markets |url=https://coingeek.com/tokenized-stocks-explained-how-robinhood-opened-us-markets/ |website=CoinGeek}}</ref><ref>{{Cite web |last=Mazza |first=Rosalia |date=July 5, 2025 |title=Robinhood Tokenization Push Redefines Market Hours and Investor Access |url=https://www.fintechweekly.com/magazine/articles/robinhood-tokenization-stock-trading-eu-arbitrum |website=FinTech Weekly}}</ref> | ||
| Line 33: | Line 33: | ||
:Currently available only to EU users, these tokens allow fractional ownership and bypass cross-border brokerage hurdles.<ref name=":7" /><ref name=":9" /> | :Currently available only to EU users, these tokens allow fractional ownership and bypass cross-border brokerage hurdles.<ref name=":7" /><ref name=":9" /> | ||
;Regulatory status | ;Regulatory status | ||
:Classified as derivatives under EU rules, not direct securities. Robinhood emphasizes transparency, but faces scrutiny over disclosures involving private companies. | :Classified as derivatives under EU rules, not direct securities. Robinhood emphasizes transparency, but faces scrutiny over disclosures involving private companies.<ref name=":10" /><ref>{{Cite web |last=Fenton |first=Andrew |date=July 16 2025 |title=Will Robinhood’s tokenized stocks REALLY take over the world? |url=https://cointelegraph.com/magazine/tokenized-stocks-take-over-world-robinhood-kraken-pros-cons-crypto/ |website=cointelegraph.com}}</ref> | ||
===Negative impacts=== | ===Negative impacts=== | ||