Robinhood’s Token Versions of Stocks Could Change How You Buy Stocks Forever

In June 2025, Robinhood Markets Inc. (HOOD) launched tokenized versions of over 200 U.S. stocks and exchange-traded funds (ETFs) for European customers, including private companies like OpenAI and SpaceX, previously accessible only to wealthy investors. These supposed blockchain “twins” of real stocks trade on blockchain networks 24 hours a day, five days a week, with zero commissions—potentially changing dramatically how millions of people invest.

But there are major catches. “As powerful as blockchain technology is, it does not have magical abilities to transform the nature of the underlying asset. Tokenized securities are still securities,” Hester M. Peirce, a U.S. Securities and Exchange Commission (SEC) commissioner and head of its cryptocurrency task force, said. 

The tokenized companies aren’t happy either. “These ‘OpenAI tokens’ are not OpenAI equity. We did not partner with Robinhood, were not involved in this, and do not endorse it,” representatives for OpenAI said on X.

For Robinhood, the benefits are obvious in these offerings—its stock increased more than 250% in the first half of 2025—but what are the benefits for regular investors? We discuss the pros and cons below.

What Are Tokenized Stocks and Who’s Behind Them?

With the Trump administration’s SEC signaling a more crypto-friendly regulatory environment, tokenized stocks are a strategic battleground for crypto exchanges expanding into traditional finance.

Tokenized stocks are supposed to be digital twins of real shares on the blockchain. When you buy these tokens, you’re not buying actual stocks—you’re buying blockchain-based contracts that should be tracking the price of real shares held by custodians.

Tokenized stocks solve crypto platforms’ growth problem. These platforms can leverage their existing blockchain infrastructure to offer 24/7 trading while having the patina of trading reputable companies in a market worth far more than crypto itself.

For Robinhood, tokenized stocks are central to CEO Vlad Tenev’s vision of transforming the company into a global financial services firm, with tokenization making it easier for the company to put its own stamp on proprietary offerings.

Potential Advantages for Investors

Proponents say that tokenized stocks promise compelling benefits for investors:

• 24/7 trading: Unlike traditional stocks that only trade during market hours, tokenized stocks can be bought and sold around the clock, just like cryptocurrencies.
• Potentially lower fees: Many platforms offer zero commissions on tokenized stock trades.
• Accessed by private companies: Perhaps most notably, tokenized stocks open access to private companies like OpenAI and SpaceX, previously limited to accredited investors.
• Applications within the crypto ecosystem: On the technical side, tokenized stocks can serve as collateral in other blockchain applications.

Drawbacks of Tokenized Shares

For investors, a fundamental problem is that you’re buying contracts that track stock prices, not actual stocks—you have no claim on assets or financial information rights. Disreputable companies might pass off tokenized shares whose value is untethered from the companies they track. Even more reputable firms can find this process difficult, especially when it comes to nonpublic companies whose valuations are already murky.

Indeed, Robinhood’s OpenAI tokens aren’t backed by direct ownership of OpenAI shares—instead, they’re stakes in a special purpose vehicle (SPV) that, in turn, is said to control OpenAI shares. Buyers can’t easily verify if tokens track actual company values. Already, EU member banks are seeking clarification from Robinhood about these tokens, worrying they won’t pass regulatory muster there, while Elon Musk called any such shares of SpaceX “fake.”

The Bottom Line

Tokenized shares don’t provide direct ownership, and when you buy them, those contracts might not track the company’s real value. Linqto’s bankruptcy, where thousands discovered they didn’t own the shares they thought they did, shows what can go wrong. Meanwhile, the regulatory landscape remains a minefield, with the SEC maintaining that tokenized securities must follow all traditional securities laws, while European regulators are already demanding clarifications about these products.

For now, tokenized stocks are more of a speculative bet on the future of finance than a reliable way to invest in the companies you want to own.