Robinhood Calls on SEC to Modernize RWA Regulation in 42-Page Proposal

Robinhood has submitted a proposal to the US Securities and Trade Fee (SEC) calling for a standardized federal strategy to regulating tokenized real-world belongings.

The newest transfer seeks to convey readability and modernization to the monetary system.

Robinhood’s Proposal

In a complete 42-page submission, the buying and selling platform argues that RWAs – blockchain-based representations of tangible belongings corresponding to bonds, actual property, and equities – ought to be ruled underneath the identical authorized requirements as their conventional equivalents.

Reasonably than being categorized as derivatives or artificial devices, these digital belongings would preserve their authentic monetary id. Robinhood argued that such a system in place would permit them to be simply built-in into the present regulatory framework. The buying and selling platform additionally added that the fragmented, state-by-state securities oversight presently in place is ill-suited for the rising tokenized economic system and poses a barrier to innovation.

To handle this, it proposes the creation of a Actual World Asset Trade (RRE), a venue designed for off-chain commerce execution with on-chain settlement to spice up each effectivity and transparency. The platform would additionally incorporate sturdy compliance instruments, together with Know Your Buyer (KYC) and Anti-Cash Laundering (AML) options, by way of partnerships with corporations like Jumio and Chainalysis.

Tokenized Actual-World Property Market

Robinhood’s proposal comes at a time when curiosity within the RWA house continues to develop.

The tokenized real-world asset (RWA) market might surge to $18.9 trillion by 2033, in line with a current report from Boston Consulting Group and Ripple. The forecast signifies a 53% compound annual development fee, positioned between conservative and optimistic projections of $12 trillion and $23.4 trillion, respectively.

Tokenization, which is basically the usage of blockchain to symbolize and switch possession of bodily and monetary belongings like securities and property, continues to draw main institutional curiosity. JPMorgan’s Kinexys platform has already facilitated over $1.5 trillion in tokenized transactions, whereas BlackRock’s tokenized cash market fund, BUIDL, additionally surpassed $1 billion AUM in March this 12 months.