Robinhood May Launch Its Own L2 for Tokenized U.S. Stocks

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The world of finance is undergoing a seismic shift as traditional financial platforms begin embracing blockchain technology to unlock new possibilities. Among the most anticipated developments is the tokenization of U.S. equities — a move that could democratize access to American stock markets for global investors. At the forefront of this transformation may be Robinhood, the popular U.S.-based fintech platform known for empowering retail investors.

Recent reports suggest that Robinhood is exploring the development of a blockchain-based platform built on a custom Layer 2 (L2) solution, potentially leveraging Arbitrum’s technology stack, to enable European users to trade tokenized U.S. stocks. This strategic pivot signals a deeper integration between traditional finance and decentralized infrastructure, positioning Robinhood as a key player in the emerging real-world asset (RWA) economy.

A Strategic Move Toward Tokenized Equities

Tokenizing stocks involves converting ownership rights of traditional securities into digital tokens on a blockchain. These tokens can then be traded peer-to-peer, with faster settlement times, lower fees, and broader accessibility — especially for non-U.S. investors who face regulatory and logistical barriers.

Earlier in 2025, Robinhood CEO Vlad Tenev publicly criticized the lack of clear regulatory frameworks in the U.S. for security tokens, highlighting how current laws hinder innovation in digital asset adoption. He emphasized that international investors often struggle to gain exposure to U.S. equities due to complex compliance requirements and limited brokerage access.

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Now, Robinhood appears to be taking matters into its own hands by building a dedicated infrastructure to bypass these limitations. With recent regulatory approvals — including obtaining a brokerage license in Lithuania — the company has laid the legal groundwork to offer stock trading services across the EU. The next logical step? Building a scalable, compliant, and efficient blockchain layer to support it.

Why Arbitrum Could Be the Foundation

While not officially confirmed, multiple sources indicate that Robinhood is evaluating Arbitrum as the underlying technology for its proposed L2 network. There are compelling technical and strategic reasons behind this potential choice:

EVM Compatibility & Developer Ecosystem

Arbitrum is fully compatible with the Ethereum Virtual Machine (EVM), allowing seamless deployment of existing smart contracts and tools. For a company like Robinhood, which likely relies on Ethereum-based systems for wallet and transaction management, this compatibility reduces development time and integration costs significantly.

Moreover, tapping into Ethereum’s vast developer community means faster innovation cycles and access to battle-tested DeFi protocols that could eventually be adapted for regulated asset trading.

Scalability Through Optimistic Rollups

Arbitrum uses Optimistic Rollup technology, which batches transactions off-chain and posts them to Ethereum Mainnet, ensuring security while reducing gas fees and improving throughput. Compared to ZK-Rollups, which offer stronger cryptographic guarantees but higher computational overhead, Optimistic Rollups strike a practical balance — ideal for high-volume retail trading platforms.

Avoiding Direct Competition with Coinbase

Coinbase has already launched Base, its own OP Stack-based L2 chain, creating an open ecosystem for DeFi and consumer apps. Given that Robinhood and Coinbase compete directly in the retail investment space, it would be strategically unwise for Robinhood to build on Base.

Instead, by leveraging Arbitrum Chains — a framework that allows enterprises to launch custom L2s — Robinhood can create a branded, purpose-built chain tailored specifically for tokenized securities, differentiating itself from Coinbase while still benefiting from shared security and interoperability.

Building a Closed vs. Open Ecosystem: The Strategic Crossroads

One of the most critical decisions Robinhood faces is whether to open its L2 to third-party developers or keep it closed and tightly integrated with its existing financial products.

An open model, similar to Base, would invite external developers to build decentralized applications (dApps) on Robinhood’s chain — fostering innovation in areas like lending, derivatives, or portfolio management using tokenized stocks. However, this approach increases complexity, regulatory scrutiny, and operational risk.

Alternatively, a closed ecosystem would focus solely on migrating Robinhood’s current offerings — such as stock trading, fractional shares, and investment tools — onto the blockchain. Users could interact directly with on-chain versions of their accounts, enabling instant settlements and greater transparency without relying on centralized databases.

This “Crypto-Native Brokerage” model aligns closely with Robinhood’s user-first philosophy but requires significant investment in security, compliance automation, and user education.

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Market Reactions and Industry Implications

News of Robinhood’s potential L2 venture sparked immediate interest in the crypto market. ARB, Arbitrum’s native token, saw a surge of over 20% in 24-hour trading volume following the Bloomberg report — underscoring investor confidence in Arbitrum’s enterprise utility.

Additionally, Robinhood’s European X account engaging with EthCC conference updates by replying “Stay tuned” has amplified speculation about an official announcement at the event. Scheduled for June 30 in Cannes, the EthCC presentation may reveal details about the platform’s blockchain ambitions.

FAQ: Understanding Robinhood’s Potential L2 Strategy

Q: What does it mean for Robinhood to launch its own L2?
A: It means Robinhood could operate a dedicated blockchain network optimized for trading tokenized U.S. stocks, offering faster settlement, lower costs, and direct control over compliance and user experience.

Q: Will non-U.S. users be able to buy U.S. stocks via this platform?
A: Yes — one of the primary goals appears to be expanding access to U.S. equities for European and other international investors who currently face restrictions.

Q: Is this project confirmed yet?
A: Not officially. While insider reports point to active development, no formal announcement has been made. The EthCC event may provide clarity.

Q: How does this differ from Kraken or Coinbase’s tokenized stock plans?
A: Unlike Kraken’s custodial model or Coinbase’s pursuit of SEC approval for regulated products, Robinhood may take a more infrastructural approach — building its own compliant chain rather than relying on third-party blockchains.

Q: Could this lead to more fragmentation in the Ethereum ecosystem?
A: Potentially. As major players launch custom L2s for specific use cases (like RWAs), there’s growing concern about ecosystem fragmentation. However, shared standards like the OP Stack help maintain interoperability.

Q: What are the risks involved?
A: Regulatory uncertainty remains high, especially around securities laws in multiple jurisdictions. Additionally, managing a blockchain network introduces operational risks related to security, uptime, and governance.

The Bigger Picture: Real-World Assets Go On-Chain

Robinhood’s potential entry into the L2 space reflects a broader trend: the convergence of traditional finance and Web3. From BlackRock’s tokenized fund on Ethereum to JPMorgan’s blockchain settlements, institutions are increasingly recognizing blockchain’s value in streamlining legacy systems.

By launching a specialized L2 for tokenized stocks, Robinhood wouldn’t just be following Coinbase — it could redefine how retail investors interact with capital markets globally.

As the line between fintech and DeFi blurs, platforms that combine regulatory compliance with blockchain efficiency will lead the next wave of financial innovation.

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The future of investing isn’t just digital — it’s decentralized, instant, and accessible to anyone with an internet connection. And Robinhood might be ready to help build it.

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