Robinhood Unveils Three-Phase Plan to Integrate Tokenized Stocks with DeFi via Arbitrum

Fintech giant Robinhood has announced a detailed three-phase roadmap to make tokenized stocks fully permissionless, enabling their use across decentralized finance (DeFi) applications. The plan leverages Arbitrum Stylus technology to bridge compatibility between traditional financial systems and blockchain networks, as revealed by AJ Warner, Chief Strategy Officer at Offchain Labs, during Devconnect in Buenos Aires.

In Phase 1, currently active in the European Union, users can purchase tokenized versions of approximately 800 publicly traded securities through the Robinhood app, with plans to add private equity. However, these tokens are restricted to the platform and cannot be transferred to external wallets or used on other protocols.

Phase 2 focuses on infrastructure enhancements, utilizing Bitstamp—acquired by Robinhood for $200 million in June—to enable 24/7 trading of stock tokens, aligning with the continuous operation of crypto markets and breaking from traditional market hours.

Phase 3 will introduce the most substantial change, making tokenized stocks fully permissionless. Users will be able to withdraw assets to external wallets and employ them in DeFi protocols, such as using tokenized Apple stock as collateral in lending apps like Aave. Warner described this as a shift toward programmable assets in an open financial system, characterizing it as a long-term project without specific timelines for later phases.

Warner highlighted compatibility challenges, noting that traditional financial infrastructure uses languages like C++ or Rust, which are not natively compatible with Ethereum's Solidity. Arbitrum Stylus addresses this by allowing smart contract development in these languages while maintaining Ethereum Virtual Machine (EVM) interoperability, offering faster execution and lower gas fees through WebAssembly (WASM) integration.