Robinhood has put forth a comprehensive proposal to the US Securities and Exchange Commission (SEC) in a bid to establish a federal framework for regulating tokenized real-world assets (RWAs), which have the potential to unlock a $30 trillion market, as reported by Forbes on May 20.
In a 42-page filing, Robinhood outlines a legal structure that would enable digital tokens representing traditional financial instruments like equities, bonds, and real estate to be treated as equivalent to the underlying assets. The goal of the proposal is to modernize the issuance, trading, and settlement of assets in the US by integrating blockchain-based mechanisms within existing securities law.
The core of Robinhood’s proposal is the creation of a unified national framework that would allow broker-dealers to issue and trade tokenized securities under a standardized compliance model, eliminating the need for disparate systems. The proposal also includes plans for the Real World Asset Exchange (RRE), a new platform that would facilitate off-chain trade matching along with on-chain settlement. To ensure compliance with global regulatory standards, the platform would integrate know-your-customer (KYC) and anti-money-laundering (AML) tools provided by third-party vendors like Jumio and Chainalysis.
By advocating for this framework, Robinhood aims to address the fragmented nature of current RWA tokenization efforts and provide a clear path for asset ownership and settlement while upholding investor protections under existing securities law.
In positioning itself as a contributor to regulatory infrastructure for bringing traditional finance onto the blockchain, Robinhood argues that tokenized assets should be recognized as direct representations of traditional financial products rather than derivatives or synthetic instruments. The company emphasizes the importance of legal interoperability to align tokenized finance with existing compliance standards, thereby facilitating broader institutional adoption and scalability in onchain financial markets within the US legal system.
Although the SEC has yet to respond to the proposal, Robinhood’s filing could serve as a litmus test for how regulators view the equivalence between assets and tokens. The success of the initiative will hinge not only on regulatory reception but also on the ability to attract institutional participation and demonstrate utility at scale.
Robinhood’s submission stands out as one of the most structured efforts by a US-regulated broker to formalize the role of tokenized RWAs in mainstream finance. As the industry eagerly awaits further developments, the proposal signals a significant step towards bridging the gap between traditional finance and the blockchain ecosystem.
[Original article source: Cryptoslate]