Robinhood launches Ethereum layer‑2 testnet to accelerate tokenized assets

Robinhood has launched a public developer testnet for a new Arbitrum-derived layer‑2, branded Robinhood Chain, intended to move tokenized securities and crypto-native products onto a dedicated onchain settlement rail. The testnet exposes developer entry points, documentation, and tooling compatible with standard Ethereum stacks, and Robinhood says select infrastructure partners are already integrated for early experimentation. The company frames the initiative as a structural response to liquidity strains experienced in 2021—when it relied on emergency financing—and argues that near‑instant onchain settlement can materially reduce intraday collateral demands on brokers. Robinhood has previously tokenized assets onchain (including nearly 500 U.S. equities on Arbitrum), and company disclosures and industry reporting cite broader tokenization issuance approaching roughly 2,000 tokenized U.S. stocks and ETFs representing around $17 million in on‑chain exposure; established tokenization providers, however, hold substantially larger pools. Robinhood positions the chain for “financial‑grade” flows—24/7 trading, instant settlement windows, portable custody models, and support for derivatives and lending primitives—but acknowledges the need to meet institutional reliability and regulatory expectations. Industry discussions with the SEC this month highlighted that tokenization changes settlement plumbing without altering the underlying economic rights of securities, so many participants are urging harmonized, transparent rulemaking rather than ad hoc exemptions. SEC officials signaled openness to operational adaptations such as extended trading hours but emphasized that any shift toward faster settlement will require commensurate surveillance, clearing and access standards. Technically, moving settlement onchain can reduce clearinghouse collateral cycles but shifts concentration of operational and legal risk into custody arrangements, smart contracts, and cross‑platform interoperability, which will need robust governance, documentation and compliance constructs. The practical rollout therefore depends on coordinated work across issuers, custodians, exchanges, clearinghouses and regulators to reconcile on‑chain mechanics with existing legal scaffolding. For builders, Robinhood Chain’s live testnet reduces prototyping friction for tokenized marketplaces, lending pools and perpetuals that leverage Robinhood-specific integrations; for Robinhood, it promises tighter product integration and new revenue pathways if it attains production-grade uptime. The most immediate significance is technical and developmental: a public testnet invites ecosystem experiments and partner validation before mainnet launch later this year. The longer success of the effort will hinge on integration velocity, demonstrated operational resilience, and clear regulatory frameworks that define how tokenized securities map to existing investor‑protection and market‑structure rules.