The SEC issued an Innovation Exemption on Sept. 17, permitting qualifying venues to trade tokenized U.S. stocks without registering as stock exchanges. This regulatory relief removes the primary legal barrier for Robinhood Markets to launch a domestic tokenized stock product. The order allows these venues to match buyers and sellers using automated liquidity pools common in crypto markets, a mechanism that previously lacked a clear regulatory framework for traditional equities.
The Rights Requirement
The exemption carries strict conditions that distinguish it from Robinhood's current overseas offerings. A venue must verify that every listed token grants holders the same rights and privileges as conventional shares, including dividends and voting power. The SEC's definition explicitly excludes tokens that offer only synthetic exposure to a security. Robinhood's European tokens, launched in mid-2025 and available in more than 120 countries, are structured as derivative contracts or debt securities. These instruments track stock prices but do not grant ownership of the underlying shares or voting rights. Consequently, they do not meet the criteria for the U.S. exemption.
CEO Vlad Tenev addressed this gap three days before the order was issued. He stated that in-kind redemption and voting rights are coming for Robinhood Stock Tokens. This shift would align the product with the SEC's requirements by allowing token holders to redeem for actual shares and exercise voting privileges. Johann Kerbrat, who oversees Robinhood's crypto business, described the exemption as a signal that tokenization is ready for the United States.
Scaling the Infrastructure
Robinhood has already built the technical foundation for this launch. The company's own blockchain network, Robinhood Chain, launched its public mainnet in July. The remaining tasks involve building or joining a qualifying venue and navigating the regulatory notice periods. The order caps the number of symbols and trading volume initially, requiring venues to publish their plans publicly at least 30 days before launch. Companies also receive written notice and an opportunity to object before a third-party tokenization of their stock begins trading.
The financial incentive is clear. Equities transaction revenue for Robinhood jumped 95% year over year in the second quarter to reach $129 million. Total revenue increased 32% to $1.31 billion, while net income grew 48%. Tokenized trading could extend the stock-trading business to weekends and introduce new uses like collateral. The company would not need to acquire new customers to achieve this growth; it only needs to provide existing users with more hours and additional trading mechanisms. The primary obstacle has shifted from regulatory permission to product development, a process the company expects to complete before the end of 2027.