Robinhood is making a significant push into the European market by launching a layer-2 blockchain and introducing tokenized stock trading for EU users. The move signifies a major step for the company, transitioning its European app from a crypto-only platform to an all-in-one investment app powered by crypto.

The new layer-2 network, built on Arbitrum, will enable the issuance of over 200 US stock and exchange-traded fund (ETF) tokens. This provides European investors with access to US assets in a novel way. Robinhood's stock tokens will be available for trading 24 hours a day, five days a week, with zero commissions. Token holders will also receive dividend payments directly within the app.

In addition to tokenized stock trading, Robinhood is launching perpetual futures in the EU, giving eligible traders access to derivatives with up to three times leverage. These trades will be routed through Bitstamp, the crypto exchange Robinhood recently acquired for $200 million.

Robinhood's CEO and chairman, Vlad Tenev, stated that these new offerings "lay the groundwork for crypto to become the backbone of the global financial system". He also noted that the company's blockchain will be optimized for tokenized real-world assets and built to support 24/7 trading, seamless bridging, and self-custody. Johann Kerbrat, GM and SVP of Robinhood Crypto, added that the company is "onboarding the world to crypto by making it as easy to use as possible—with the goal of bringing powerful tools into one intuitive platform".

The introduction of tokenized stock trading is part of Robinhood's broader strategy to integrate blockchain technology into its financial services. The company is developing its own Layer 2 blockchain network based on Arbitrum, which aims to support real-world asset (RWA) tokenization and facilitate seamless crypto trading.

This Layer 2 solution is designed to enhance the scalability and efficiency of blockchain transactions, making it easier for users to trade tokenized assets. The concept of issuing tokenized stocks gained traction when platforms like Binance and FTX experimented with similar models, though they faced regulatory hurdles in 2021. Robinhood's approach could signify a new norm in merging traditional and crypto finance.

Robinhood is also offering crypto staking for Ethereum in the U.S., and crypto staking is available to all Robinhood customers in the EU and EEA. For a limited time, US and EU investors can transfer crypto into Robinhood and earn a 1% deposit boost—with the chance to double it to 2% if total deposits hit the $500M goal.

The launch of tokenized stock trading in the EU marks Robinhood's entry into the European market with a unique value proposition. By leveraging blockchain technology, Robinhood aims to offer its users a more efficient and transparent way to invest in U.S. equities and ETFs, potentially attracting a new segment of investors interested in blockchain technology and digital assets.