Robinhood co-founder pens long-form article on stock tokenization: Putting stocks on-chain does not change their underlying attributes, and stock issuers have no right to block it

Odaily News: Robinhood co-founder Vlad Tenev published a long-form article this morning outlining Robinhood's vision of enabling global investors (especially non-U.S. users) to gain exposure to U.S. stocks and ETFs through blockchain, and focused on the question of whether issuers need to consent to their stocks being tokenized.

Vlad Tenev argues that publicly traded company shares are freely transferable personal property, and owners should have the right to decide how to hold and use them. The company that issues the stock controls the rights attached to the securities it issues, but it does not control all third-party financial products built around those securities, and there is already precedent for this in financial markets: unsponsored ADRs, options, and structured products. Therefore, if a product changes the rights of the underlying shares, replaces the company's official shareholder register, or imposes new obligations on the company/transfer agent, then issuer involvement is required. If it merely creates an independent financial instrument that holds or references freely transferable shares on a 1:1 basis, without changing the issuer's rights, obligations, or authoritative shareholder records, then issuer consent is not required.

Robinhood adopts a model of third-party issuance of independent instruments backed 1:1 by underlying shares. Putting stocks on-chain should not grant issuers veto rights they did not previously have, nor should it prevent new investors from entering simply because issuers do not understand new technology.

Last week, AMC's CEO criticized the "synthetic equity market" established by Robinhood as potentially decoupling stock token trading from listed companies' financing arrangements, and demanded that Vlad Tenev and Robinhood voluntarily stop AMC stock token trading. The related debate sparked heated discussion in both the crypto and stock communities.