Robinhood Just Launched a Blockchain to Replace Wall Street

Robinhood Chain Takes on NYSE and NASDAQ — Bankless Podcast with Johann Kerbrat, GM of Robinhood Crypto (47 minutes)

Robinhood just launched a public blockchain test net. Not a private ledger. Not an internal database upgrade. A permissionless Ethereum Layer 2 designed to replace the infrastructure that powers Wall Street. And their crypto GM, Johann Kerbrat, says the quiet part out loud on this episode: they are building to make the New York Stock Exchange and NASDAQ obsolete.

Here is why that matters, why Robinhood's strategy is different from everyone else, and what it means for the future of financial markets. Three things from this conversation will change how you think about where your money actually lives.

The Three-Way War for Wall Street's Future

Something extraordinary is happening right now in financial infrastructure, and most people have no idea. Three separate entities are all racing to put stocks on a blockchain, and they are all doing it differently. The New York Stock Exchange is building a brand-new 24/7 tokenized marketplace with on-chain style settlement, essentially a back-office upgrade using blockchain rails. NASDAQ is taking a more conservative path, allowing the DTCC to optionally deliver purchased tokens in tokenized form after a trade, sort of bolting blockchain onto their existing system. And then there is Robinhood, which is going the most radical route of all.

Robinhood chain is a permissionless Ethereum Layer 2 built using Arbitrum technology. That word permissionless is doing enormous heavy lifting here. Unlike the NYSE and NASDAQ approaches, which are essentially closed systems controlled by their respective exchanges, Robinhood is building an open developer ecosystem. Anyone can build applications on it. Anyone can deploy smart contracts. It functions like a public blockchain because it is one.

Johann Kerbrat explains that Robinhood itself will be the first major user of the chain, but the entire point is that other institutions, other developers, other financial companies can all build on the same infrastructure. This is not Robinhood trying to be a crypto exchange. This is Robinhood trying to become the operating system for the next generation of financial markets.

The test net is live right now, and developers can start building and testing applications on it. While Kerbrat would not commit to a hard mainnet launch date, he hinted that historically the gap between test net and mainnet is not very long. They are planning hackathons and actively recruiting builders.

Tokenized Stocks Are Already Here, Just Not for Americans

While most of the crypto world debates meme coins and speculation, Robinhood has quietly been rolling out something far more consequential. They launched tokenized stocks in the European Union last June with 200 stock tokens. By the time of this interview, that number had grown to over 2,000. The growth rate alone tells you their tokenization engine works and scales.

The experience for European users is essentially identical to buying a regular stock on Robinhood in the US. Kerbrat says if you put the two interfaces side by side, you would think they are the same product. They even had to add a small pill indicator at the top of the screen that says "token" just so people would know they were buying a tokenized security running on Arbitrum rather than a traditional equity. There is no bridging, no gas fees, no wallet management. Robinhood abstracts all of that away.

But here is where it gets frustrating and fascinating at the same time. American users cannot access tokenized stocks yet. The regulatory picture in the US has been murky, with different states having different requirements, different licenses needed, and ongoing questions about whether a tokenized security is legally a security under SEC rules. Kerbrat is clearly optimistic that the Clarity Act currently making its way through Congress will level the playing field, but there is a catch. The bill is getting held up in a fight between Coinbase and the banking industry over whether stablecoin issuers should be allowed to pass yield through to holders.

The Liquidity Problem Nobody Has Solved Yet

One of the most honest moments in this interview comes when David, the Bankless host, pushes Kerbrat on the fundamental challenge of tokenized securities: liquidity. You can put a stock on a blockchain all day long, but if nobody is trading it on-chain, you have a glorified database entry. Without deep liquidity, you cannot use tokenized stocks as collateral in DeFi. You cannot build lending protocols around them. You cannot do any of the things that make on-chain finance genuinely better than traditional finance.

Kerbrat does not dodge this. He admits it is a real problem and explains that Robinhood deliberately launched their stock tokens in phases precisely because they were worried about liquidity issues. Phase one, which is live in the EU, makes stock tokens non-transferable on-chain. You can buy and sell them through Robinhood, but you cannot move them around freely yet. Phase two, which is coming, will open up on-chain transferability with proper exchange infrastructure in place.

The solution Robinhood is pursuing mirrors what they already do for crypto trading. When you buy Bitcoin on Robinhood, the platform connects to multiple market makers and multiple exchanges simultaneously, routing your order to whoever offers the best price. Kerbrat says this same multi-source order routing approach will be applied to tokenized stocks. The idea is that as different liquidity pools emerge across different chains and platforms, Robinhood will arbitrage between them to maintain tight pricing and prevent tokens from drifting away from the value of their underlying assets.

The Strategic Chess Moves: Talos and Lighter

Two strategic investments Robinhood made recently reveal a lot about their long-term thinking. First, they invested in Talos, a backend connectivity trading platform valued at one and a half billion dollars. Talos allows brokerages and financial institutions to connect to multiple crypto exchanges and market makers through a single platform. Charles Schwab, Interactive Brokers, or any traditional financial firm that wants to offer crypto to its clients can use Talos as their backend infrastructure.

This is directly competitive with Coinbase's strategy of being a white-label crypto infrastructure provider. By investing in Talos, Robinhood is essentially backing a competitor to one of its biggest rivals' growth strategies. And it gets more interesting because Robinhood also acquired Bitstamp, the 15-year-old crypto exchange, specifically to build out institutional services. So Talos feeds institutional order flow into Bitstamp, which sits on Robinhood's exchange rails. The whole thing starts to look like a vertically integrated financial stack.

The second investment was in Lighter, a perpetual exchange Layer 2 on Ethereum, also valued at one and a half billion. Robinhood already offers perpetual contracts in the EU with up to 7x leverage, and Bitstamp also launched perps on its exchange. But the Lighter investment shows Robinhood is thinking about decentralized perps too. When asked whether this is competitive with their own products, Kerbrat gives a refreshingly honest answer. He says the crypto market is simply too early to worry about fighting over market share. If you ask most normal people what a perpetual contract is, they have never heard of it. The pie needs to grow before anyone should worry about their slice.

Twenty-Six Million Users and a Wallet Strategy

Robinhood has more than 26 million customers. Most of them are traditional retail investors who want simple exposure to stocks and maybe some crypto. They do not care about DeFi protocols or Layer 2 networks or self-custody. But a meaningful subset of those 26 million users do want more control. They want to touch the chain themselves, manage their own keys, interact with DeFi applications.

That is what the Robinhood wallet is for. It is designed to look and feel like the main Robinhood app, with the same emphasis on clean design and usability, but it gives users control of their own private keys. You can approve transactions, see which network you are on, and export your private key to any other wallet if you want to. Kerbrat positions it as a bridge product. The main app handles the mass market. The wallet serves the power users. And when Robinhood chain goes live on mainnet, the wallet will be optimized for it, giving users a native way to interact with tokenized stocks, DeFi applications, and whatever else gets built on the chain.

The strategy becomes even clearer when you consider that Robinhood has also launched banking, prediction markets powered by Kalshi, staking, and a rapidly expanding crypto asset list. All of these products living inside one ecosystem that can seamlessly connect through Robinhood chain is the long-term vision. They want you to be able to jump between stocks, crypto, prediction markets, lending, and borrowing without ever leaving the Robinhood universe.

The Perps Question and US Competitiveness

One topic that kept coming up throughout the interview is the question of when perpetual contracts will be available to US citizens. Right now, perps are essentially banned in the US because they do not have expiration dates, which puts them outside the existing regulatory framework for futures. That is a CFTC question, not an SEC question, and there is a new CFTC chair who just started.

Kerbrat makes a compelling argument about competitiveness. He points out that massive trading volume for perps is flowing to offshore exchanges because US platforms cannot offer them. Every dollar of volume that goes offshore is revenue and innovation that could be happening domestically but is not. He is hopeful that the new political environment and regulatory appointments will lead to progress on this issue, but he is careful not to overcommit on timelines.

The broader theme here is that for all the talk about the US leading in crypto innovation, the reality is that much of the most interesting work in tokenized securities, perps, and on-chain finance is happening in Europe, Asia, and other markets with clearer regulatory frameworks. Robinhood's decision to launch tokenized stocks in the EU first, rather than the US, is a perfect illustration of this dynamic.

Key Takeaways

First, Robinhood is not just adding crypto features. They are building an entirely new financial infrastructure layer that competes directly with the NYSE and NASDAQ, and they are doing it as a permissionless public blockchain rather than a closed system.

Second, tokenized stocks are not theoretical. Over 2,000 are already live in Europe on Robinhood, and the experience is so seamless that users cannot tell they are buying blockchain-based assets unless they look for a small label.

Third, the liquidity problem for on-chain securities is real and unsolved, but Robinhood's multi-source order routing approach and their acquisition of Bitstamp give them a structural advantage most competitors lack.

Fourth, the strategic investments in Talos and Lighter reveal a company thinking 10 to 20 years ahead, building infrastructure that benefits from the growth of the entire on-chain finance ecosystem rather than just Robinhood's own products.

Fifth, the US is falling behind in financial innovation because of regulatory uncertainty. The Clarity Act could change this, but it is currently stalled. Meanwhile, European users have access to products that Americans cannot yet touch.