Robinhood’s Head of Crypto Thinks Most Blockchains Are Pointless as the SEC Draws Its Lines Around Tokenized Stocks

Johann Kerbrat doesn’t mince words. Robinhood’s Head of Crypto has a simple explanation for why the company chose to build an Ethereum Layer 2 rather than launch its own standalone blockchain: everyone else doing the latter is, in his view, building a glorified database.

“You get security and decentralization for free,” Kerbrat said of the Layer 2 approach, referring to Ethereum’s base layer. New Layer 1 networks, he argues, rarely achieve genuine decentralization – they just end up slower and less efficient than traditional financial infrastructure, with none of the trustless guarantees that make blockchain worth using in the first place.

That logic underpins Robinhood Chain, the company’s custom network built on the Arbitrum stack, designed specifically to support the tokenization of real-world assets. The public testnet went live on February 10, 2026, processing 4 million transactions in its first week. A mainnet launch is scheduled for later this year.

The architecture choice is strategic on multiple fronts, according to a report by CoinDesk. By anchoring to Ethereum, Robinhood sidesteps the resource-intensive work of maintaining base-layer consensus, freeing up development bandwidth for the products that actually face users. It also plugs directly into the liquidity already flowing through the Ethereum Virtual Machine ecosystem – something Kerbrat considers non-negotiable for an on-chain stock market to function. And crucially, an L2 still hands Robinhood full control over its sequencer revenue, fee structures, and compliance tooling.

To accelerate ecosystem development, the company has committed $1 million to the 2026 Arbitrum Open House program, funding buildathons and developer events. The tokenization side of the business is already moving: Robinhood has tokenized roughly 2,000 U.S. stocks and ETFs on Arbitrum for European customers – up from around 200 at launch.

Robinhood isn’t alone in this playbook. Coinbase built Base. Kraken launched Ink. Major exchanges are increasingly treating proprietary Layer 2 networks not just as products, but as financial infrastructure they own end-to-end – controlling both the interface and the rails underneath it. Ethereum’s own trajectory is accelerating this trend; co-founder Vitalik Buterin has suggested that as the base layer scales faster than anticipated, L2s will shift from general scaling solutions toward purpose-built, use-case-specific networks. Robinhood Chain is a textbook example of exactly that.

CEO Vlad Tenev has been equally direct about the broader vision. He describes tokenization as a “freight train” – unstoppable, and ultimately capable of enabling 24/7 trading, instant settlement, and the integration of on-chain equities into traditional financial products like mortgages. Whether that plays out in the U.S. anytime soon, however, depends heavily on regulators.

The Regulatory Picture Is Complicated – Especially in America

Robinhood’s tokenization ambitions currently have a geographic boundary drawn around them. The 2,000 tokenized stocks it offers are available exclusively to European retail customers, operating under the EU’s MiCA and MiFID II frameworks. In Europe, those tokens are structured as derivatives – not direct ownership of underlying shares – a structure that has already attracted attention from the Bank of Lithuania, which is seeking clarification on what, exactly, backs these assets legally.

In the United States, the path is considerably harder. The SEC’s January 2026 joint statement settled one question definitively: tokenized equities are securities, full stop. Blockchain format changes nothing. The agency had already made this clear in July 2025, when its Crypto Task Force reminded firms that putting an asset on-chain does not “magically” exempt it from federal securities law. The 2026 guidance formalized that position, confirming that tokenized stocks are subject to existing registration, disclosure, and FINRA broker-dealer requirements – regardless of how they’re structured technically.

For platforms like Robinhood that operate on a custodial model – holding traditional shares and issuing digital tokens against them – the SEC treats those tokens as “security entitlements,” requiring strict adherence to conventional custodial rules. A proposed “innovation exemption” floated in January 2026 would streamline disclosures for decentralized governance models, but its applicability to a centralized platform is contested.

There are signs of movement at the infrastructure level. In December 2025, the DTCC received a no-action letter permitting a three-year pilot to test blockchain-based settlement, with the goal of compressing settlement times from T+1 to near-instant. Nasdaq filed with the SEC in September 2025 to enable tokenized securities to trade and settle on its exchange. These are incremental steps, but they suggest the underlying plumbing is being stress-tested in anticipation of something larger.

What hasn’t moved as cleanly is Robinhood’s more aggressive play: tokenizing private company shares – including OpenAI – without the issuing companies’ endorsement. That has drawn direct legal pushback and SEC warnings around what the agency is calling “linked securities.” It’s a test of how far the tokenization thesis can be pushed before it runs into a wall.

The other regulatory risk is structural. SEC Commissioner Hester Peirce warned in late 2025 that Layer 2 networks using centralized sequencers – which Robinhood’s proposed chain does – may eventually be regulated as national securities exchanges. If that interpretation gains traction, it would fundamentally change the compliance calculus for the entire exchange-as-infrastructure model.

Europe Tokenization Sector

While Robinhood expands its tokenized stock offering across Europe, the continent’s financial infrastructure is undergoing its own transformation. The European Central Bank’s Eurosystem has unveiled Appia, a strategic initiative designed to build a European tokenized financial ecosystem – one that keeps central bank money at its core.

The timing is notable: Robinhood is operating in a European market that is actively being rewired at the institutional level, potentially setting the stage for deeper integration between retail tokenization platforms and sovereign-backed digital financial rails.

What This Means for the Market

The broader implication of Robinhood’s move is that the line between brokerage and blockchain infrastructure is disappearing. Robinhood isn’t just offering crypto trading as a feature – it’s building the settlement layer it wants to operate on, and using tokenized equities as the wedge to get there.

That model works in Europe today. Whether it works in the United States in 2026 depends on regulatory ground that is still actively shifting. The DTCC pilot, the SEC’s evolving guidance, and ongoing industry filings all point toward a system that is slowly being rebuilt for on-chain settlement – but slowly is the operative word. For now, Robinhood Chain is a bet on where that system lands, placed before the outcome is certain.

The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

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