Robinhood Markets (NASDAQ: HOOD) CEO Vlad Tenev is urging U.S. regulators to approve tokenized stocks, warning that the country risks losing out to international competitors in the development of the next generation of financial-market infrastructure.

The Tokenization Super Cycle

Tenev believes that the global financial system is at the beginning of a ‘tokenization super cycle’ that has the potential to revolutionize traditional finance. This process involves the creation of digital tokens that represent ownership of real-world assets, such as stocks, bonds, and real estate.

In a social media post, Tenev emphasized that the U.S. is at risk of falling behind in the development of tokenized financial markets. He pointed out that Robinhood has already made tokenized U.S. stocks available in over 120 countries outside of America, while more than 190 U.S. stocks have been tokenized to date.

Benefits of Tokenization

Tokenization allows investors to gain exposure to real-world equities, such as Apple (NASDAQ: AAPL), using cryptocurrency infrastructure rather than a standard brokerage. This approach offers several benefits, including:

• Instant blockchain settlement, which can speed up transactions and reduce the risk of errors
• Lower fees through fewer middlemen, as tokenized transactions can be settled directly between parties
• Borderless access to equities, as tokenized stocks can be traded and settled globally
• Addressing two longstanding issues in traditional markets: limited trading hours and slow asset transfers

Tenev believes that blockchain infrastructure could make around-the-clock trading widely available and speed up transfers between brokers, which currently take several days to finalize.

Regulatory Obstacles

Despite the potential benefits of tokenization, Tenev acknowledges that regulation remains an obstacle in the U.S. HOOD stock has declined 15% over the past 12 months to trade at $91.53 U.S. per share.

Robinhood has begun prioritizing tokenized stocks outside the U.S., but Tenev is urging U.S. regulators to approve tokenized stocks to stay competitive in the global financial market.