Robinhood CEO says stock tokenization can prevent another GameStop

Robinhood co-founder and CEO Vlad Tenev argued that the 2021 GameStop trading halt was caused by poor infrastructure rather than malicious actors, according to CoinDesk. He explained that the situation was the result of a slow, outdated financial system combined with unprecedented trading volume and volatility in a handful of stocks. Tenev noted that while the settlement cycle for stocks has been shortened from two business days to one, it remains insufficient. The solution, he proposed, is to trade stocks on the blockchain. Tenev believes blockchain-based stocks could help prevent a similar crisis from recurring. He stated that this would eliminate long settlement periods, reducing systemic risk and easing the burden on brokerage firms, while allowing customers to trade freely when and how they want. This comes as Robinhood is reportedly planning to launch tokenized trading and DeFi features in the coming months.