Bankless: Coinbase is surrounded by strong competitors, and Robinhood is determined to win

By Jack Inabinet Source: Bankless

Robinhood made quite a splash at EthCC in Cannes, France, announcing a slew of new crypto-related initiatives that are expected to differentiate the exchange and accelerate the adoption of on-chain financial activity.

Shares of Robinhood parent company HOOD rose as much as 11% on the day, hitting a new all-time high of over $90. Meanwhile, the crypto industry was clearly excited about the Robinhood announcement.

Here are the latest Robinhood developments you need to know about, and why they matter.

What did Robinhood announce?

Robinhood has officially entered the blockchain deep waters with what may be its most significant real-world asset tokenization initiative to date.

Starting today, Robinhood European users can access U.S. capital markets through tokenized U.S. stocks, ETFs, and pre-IPO opportunities (including OpenAI and SpaceX).

These tokenized assets will initially be issued on Arbitrum L2, but like Coinbase, Robinhood also plans to launch its own dedicated second layer network (L2), which will become the primary hosting platform for Robinhood stock tokens in the future.

Previously, the European version of Robinhood only supported crypto assets, but after this update, it will be transformed into a "all-asset crypto-driven investment platform", allowing qualified EU users to trade more than 200 US stocks and indices 24/5 with zero commissions, no spreads, and support for dividends.

In addition, as Robinhood officially completes the acquisition of Bitstamp, qualified European investors will also gradually gain trading rights for 3x leveraged perpetual contracts, and full opening is expected to be completed by the end of this summer.

While this update focuses on European users, there are also many new features available for US users:

• In May, the US Securities and Exchange Commission's (SEC) Division of Corporation Finance approved crypto asset custody staking, and Robinhood quickly took advantage of this regulatory clarity. Now, customers in some US states can stake and earn returns on assets such as ETH and SOL.

• This fall, US Robinhood Gold credit card holders will be able to automatically convert cash back rewards into designated crypto assets.

• During a limited-time promotion, all crypto assets transferred to Robinhood will receive a 1% deposit bonus, which can be doubled to 2% if Robinhood's total crypto deposit volume reaches $500 million.

• In addition, US users can now also use Robinhood's **"Tax Batch" feature**, which allows users to select a specific cost basis to sell crypto assets for tax optimization.

Why it matters?

This series of announcements from Robinhood marks a critical inflection point, not only for the company itself, but also for the entire crypto industry.

For a long time, Coinbase has been regarded as the "representative of crypto-native innovation", but now that Robinhood has also begun to offer tokenized stocks and even plans to launch its own L2, the balance of power is quietly tilting.

While Coinbase is also seeking approval to offer tokenized stocks to US users, Robinhood itself is a SEC-regulated trading platform, which gives it a clear advantage in compliance and is likely to become the first exchange to truly launch such products to the public.

What's more, Robinhood is already implementing tokenized stock features for European users, which may give it a liquidity advantage in the tokenized market, bringing better pricing and deeper order books, thereby improving user experience.

While Robinhood is one of the most notable platforms at the moment, it is not the only player pushing tokenized stocks. For example, Kraken is preparing to offer tokenized stocks to non-US users; Dinari has just received the first license in the US to issue tokenized stocks.

While multiple platforms issuing different tokenized stocks may indeed lead to "fragmentation", the trend of everyone working together also means that the integration of TradFi and DeFi is becoming real and feasible. This marks a new stage in the crypto industry: the transition from technical potential to maturity of practical use.

To truly achieve mass adoption of blockchain, "conquering real assets on the chain" is a necessary step. From this perspective, Robinhood's tokenization plan can be called a foundational event. A consumer-facing, crypto-integrated stock platform with millions of users is the key catalyst that could drive crypto adoption around the world.

While the battle for the “next generation trading platform” is far from over, one thing is clear: Coinbase is no longer alone and is surrounded by powerful rivals.