In a significant development for the digitalization of traditional finance, Robinhood Markets Inc. recently submitted a comprehensive proposal to the SEC outlining a regulatory framework for tokenized real-world assets (RWAs). This move places Robinhood in direct competition with Coinbase in the race to bring traditional assets on-chain. Let's examine both companies' approaches and assess who might cross the finish line first.
Robinhood's Bold RWA Framework Proposal
Robinhood's letter to the SEC, submitted in early 2025, represents a strategic pivot toward embracing blockchain technology for traditional securities. The proposal outlines several key benefits of tokenization:
- Enhanced Transaction Settlement: Nearly instantaneous settlement compared to traditional T+2 cycles
- Improved Price Discovery: 24/7/365 trading capabilities allowing for continuous market access
- Smart Contract Programmability: Automated enforcement of regulatory requirements and corporate actions
- Increased Liquidity and Inclusion: Fractional ownership lowering barriers to investment
- Greater Transparency: Immutable transaction records enhancing market integrity
What makes Robinhood's approach particularly interesting is its comprehensive regulatory suggestions. The company advocates for:
- A single, federal regulatory framework to avoid state-by-state patchwork compliance
- Treating tokens as identical to their underlying assets for regulatory purposes
- Allowing broker-dealers to custody and trade both tokenized securities and non-securities
- Reasonable flexibility for changes in regulatory status of digital assets
- Updates to accredited investor definitions and offering thresholds
The proposal suggests Robinhood is positioning for a Robinhood RWA Exchange (RRE) that would utilize modern blockchain infrastructure while maintaining regulatory compliance.
Coinbase's Established Path to Asset Tokenization
As detailed in my previous analysis, Coinbase has already made significant strides toward tokenizing traditional assets:
- Acquired regulatory licenses across multiple jurisdictions
- Established the Coinbase International Exchange with a focus on tokenized assets
- Developed the Base blockchain specifically designed for institutional-grade services
- Created regulatory frameworks in collaboration with international regulators
Coinbase's CEO Brian Armstrong has repeatedly emphasized tokenization as central to the company's future, with particular focus on institutional adoption and cross-border capabilities.
Who Will Be First? A Competitive Analysis
Regulatory Positioning
Robinhood: While their SEC proposal demonstrates serious intent, Robinhood is still in the lobbying stage of the regulatory process. Their broker-dealer status provides certain advantages, but they need significant regulatory changes to implement their vision.
Coinbase: Already has international exchange licenses and has been working with regulators globally for years. Their active involvement in creating regulatory frameworks puts them ahead in terms of operational readiness.
Technical Infrastructure
Robinhood: Reports suggest they're developing an architecture combining Solana and Base blockchains with off-chain matching and on-chain settlement, potentially enabling T+0 settlement and 30% cost reduction.
Coinbase: Has already launched Base, an Ethereum L2 specifically designed for institutional use cases. Their technical infrastructure is not just proposed but operational.
Market Approach
Robinhood: Appears to be taking a compliance-first approach, seeking clear regulatory guidelines before full-scale launch. Their retail-friendly interface and zero-commission model could accelerate adoption once launched.
Coinbase: Taking a dual approach - working with regulators while simultaneously launching products in more permissive jurisdictions. Their large institutional client base provides immediate potential users for tokenized products.
The Bottom Line
Looking at what's happening right now, Coinbase is probably gonna win this race:
- They already built their Base blockchain and it's running
- They have licenses in many countries already
- Big institutions are already using their platform
- They're already working on tokenization projects
My Prediction: Coinbase will definitely be first to market - they'll probably let people buy tokenized Coinbase shares (COIN) on their platform before Robinhood can get anything similar out the door. Once they prove it works with their own stock, other companies will follow. Robinhood might catch up later because regular people love their app, but Coinbase has too much of a head start right now.
What's clear is that both companies recognize tokenization as the future of asset markets. As Robinhood's letter states, this represents "a generational opportunity to modernize and dramatically enhance legacy market infrastructure." Whether Coinbase or Robinhood crosses the finish line first, investors and the broader financial ecosystem stand to benefit from the increased efficiency, transparency, and accessibility these innovations will bring.