Robinhood proposes federal framework for tokenized assets in finance

In April 2025, Robinhood formally submitted a proposal to the U.S. Securities and Exchange Commission for the establishment of a federal regulatory framework aimed at facilitating the issuance and trading of tokenized real-world assets (RWAs). This initiative marks a significant step towards modernizing U.S. securities markets and is intended to address the persistent desire within the financial sector to tokenize RWAs, promising to enhance liquidity and transparency across various asset classes. The proposal, comprising 42 pages, highlights an overarching vision where assets such as Treasury bills and real estate could be traded seamlessly on a blockchain platform. While previous attempts at tokenization have largely remained within limited environments like testing pilots or controlled platforms, Robinhood's submission signals a potential shift toward integrating these innovative methods more broadly into the regulated finance landscape. The company envisions a Real World Asset Exchange that combines off-chain processes for speed with on-chain settlements for increased transparency. A key focus of Robinhood's proposal is the legal infrastructure necessary for further legitimizing tokenized assets within traditional finance. The suggested framework would empower broker-dealers like Robinhood to trade and maintain custody of these digital assets without needing to rely on uncertain legal structures. By receiving SEC approval, Robinhood hopes to provide the missing bridge to robust regulation, crucial for fostering institutional confidence in the tokenization process. However, the proposal also raises significant questions about the implications for taxation, investor protection measures, and cross-border regulatory challenges. Despite these hurdles, the mere act of submitting the proposal could drive future discussions and promote the conversations necessary for further developments in tokenizing RWAs. Whether or not the SEC accepts the proposal in its current form, the importance of this move cannot be underestimated, as it could potentially pave the way for a new era in asset management and trading.