According to data compiled by S&P Global Market Intelligence, the stock of upstart financial services company Robinhood Markets (NASDAQ: HOOD) was rising by more than 11% week to date as of early Friday morning. One key reason for this was a media report about the company’s apparent embrace of current financial technology to build a cross-continental trading system.
A new method of international securities trading?
Toward the end of Wednesday’s trading session, Bloomberg reported that Robinhood is aiming to build a blockchain-based trading platform for European investors to trade American securities.
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Citing two unidentified “people familiar with the matter,” the financial news agency wrote that Robinhood will probably partner with an existing blockchain developer for the project. Two possibilities mentioned in the article were Solana and Arbitrum.
One of Bloomberg’s sources stressed that negotiations between Robinhood and potential collaborators are ongoing, and no agreement has been finalized.
Neither Robinhood, nor the developers of the two blockchains — Offchain Labs for Arbitrum and Solana Foundation — have yet commented on the article.
A potential blockchain bonanza
There has been much chatter in both the financial services industry and the cryptoverse about using digital “tokens” to trade securities such as stocks. That’s an enticing possibility, as it could result in cheap, low-friction transacting in the enduringly popular universe of financial investments available in this country.
If Robinhood can develop such a system, it could rope in a serious level of new business. So this is not only a worthwhile development for the company’s investors to watch, it should be of interest to anyone currently involved in the financial markets.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Solana. The Motley Fool has a disclosure policy.
