Robinhood calls on SEC to modernize RWA regulation in 42 page proposal

Robinhood has filed a recommendation with the U.S. Securities and Exchange Commission (SEC) calling for a standardized federal approach to regulating real-world assets.

The latest initiatives aim to bring clarity and modernization to the financial system.

Robinshid’s proposal

In a comprehensive 42-page submission, the trading platform believes that the blockchain-based representation of RWAS (blockchain-based bonds, real estate and stocks) should be the same as its traditional equivalent standards.

These digital assets are not classified as derivatives or synthetic tools, but are to maintain their original financial identity. Robinhood believes that such systems will allow them to be easily integrated into existing regulatory frameworks. The trading platform also added that the currently conducting fragmented state securities oversight is not suitable for the emerging token economy and presents obstacles to innovation.

To address this problem, it proposed the creation of a real-world asset exchange (RRE), a site designed to be executed through chain trade and settled on the chain for increased efficiency and transparency. The platform will also be partnering with companies from Jumio and Chainalysis to include Know Your Customer (KYC) and Anti-Money Laundering (AML) solutions.

Tokenized real asset market

Robinhood’s proposal is a time when the RWA space continues to grow.

According to the latest report from Boston Consulting Group and Ripple, the Mark Real-World Assets (RWA) market could soar to $18.9 trillion in 2033. The forecast shows that conservative and optimistic forecasts are at a CAGR of 53% between $12 trillion and $23.4 trillion, respectively.

Tokenization is essentially the use of blockchain to represent and transfer ownership of physical and financial assets such as securities and property, and it continues to attract major institutional interests. JPMorgan’s Kinexys platform has provided more than $1.5 trillion in token trading, while BlackRock’s token money market fund Buidl also exceeded $1 billion in AUM in March this year.