In response to Robinhood CEO Vlad Tenev, inventory tokenization may assist cease buying and selling pauses just like the one which hit GameStop shares in 2021.
In a put up on X, Tenev known as the GameStop occasion “one of many strangest and most seen fairness market failures in latest historical past”. He stated it occurred due to guidelines tied to the previous two-day settlement cycle utilized in US markets.
When excessive buying and selling volumes met gradual processing, clearinghouses demanded large deposits, brokers imposed limits, and lots of retail merchants have been locked out.
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Tenev defined that the system itself prompted the pressure. At the moment, Robinhood didn’t have sufficient money to fulfill settlement necessities, which pressured the corporate to lift $3 billion in two days to maintain buying and selling lively.
He added that many buyers have been annoyed as they might not purchase shares throughout the surge.
He believes that bringing equities onto blockchains may repair the delay. Whereas US markets have since lowered settlement from two days to 1, Tenev nonetheless sees the method as too gradual, particularly when weekend trades can stretch settlement to a number of days.
Main exchanges such because the New York Inventory Trade are already testing tokenized inventory methods.
Tenev stated these efforts present the place the market is heading: real-time clearing constructed on clear, trendy infrastructure. He described this shift as “inevitable” as its advantages grow to be clearer.
Not too long ago, Changpeng Zhao spoke about asset tokenization at a World Financial Discussion board session in Davos, Switzerland. What did he say? Learn the complete story.
