Organized by: Golden Finance

"Tokenization is like a freight train, unstoppable, and will ultimately consume the entire financial system." At the Token 2049 conference in 2024, Robinhood co-founder and CEO Vlad Tenev made this bold prediction. This fintech leader, who started by disrupting traditional brokers with commission-free trading, engaged in an in-depth conversation with host Haslinda Amin, bringing sharp insights from mathematicians and tech experts.

Here is the full content of the conversation:

Haslinda Amin: Entering the financial system and markets should not be a privilege for a few. It is a basic right for each of us. That’s why Robinhood offers commission-free trading. Now, with the maturity of blockchain technology, I see that cryptocurrencies, stablecoins, and tokenization are gaining momentum. Standing firm in the wave of revolution. This is another opportunity to deepen financial inclusion. How will this vision be realized? The next guest can answer all questions. He is a mathematician, tech expert, entrepreneur, and also a co-founder of Robinhood. It’s a pleasure to share the stage with you. Thank you.

Vlad Tenev: Thank you for not calling me a "TradFi guy." Of course, it’s not that there’s anything wrong with "TradFi," but the term carries a bit of a derogatory connotation, right? But that’s okay, the context is such.

Haslinda Amin: Let’s start with tokenization. It seems like a good entry point. Some say we are on the brink of a revolution, and others say this might be the "new ETF moment" in finance. I know you agree with this view.

Vlad Tenev: I believe tokenization is like a freight train, unstoppable, and will ultimately consume the entire financial system. However, there’s an interesting point about tokenization—how about we interact a bit? How many people here currently hold tokenized real-world assets? Well, it seems not many.

Haslinda Amin: Indeed, not many.

Vlad Tenev: So that’s the current state of tokenization. Many have talked about it for a long time, but actual action is quite rare. Earlier this summer, we held a conference in southern France, where we officially launched stock tokens, which are tokenized versions of U.S. stocks. We launched about 200 stock tokens from well-known companies. Recently, we expanded and launched a broader range of public stock tokens. And as you mentioned, we also tokenized companies like SpaceX and OpenAI; we were the first to do so. If you register to use our tokenized products in the EU, you can get tokenized OpenAI and SpaceX assets for free. However, when everyone raised their hands just now, you might have missed a point—how many people own stablecoins? Okay, that’s a bit more, right? Maybe still only about 30%, which indicates we are still in the early stages. But stablecoins are a form of tokenized real-world assets. Sometimes, when I explain "since traditional stocks exist, what’s the advantage of tokenized stocks," I use an analogy to make it easier for them to understand: for U.S. stablecoins, we can say it’s one of the best ways to access U.S. assets and further solidify what we call "the dollar's dominance globally." The dollar has always been the global reserve currency, but now it faces quite a bit of competition. One way we maintain the dollar's advantageous position is by making it the default choice for accessing dollars in the digital crypto space. That’s why in the U.S., stablecoins have always been our focus. If you hold a stablecoin pegged to the dollar, it’s essentially like holding the most basic tokenized asset. Just as stablecoins "carry the value of the dollar in token form," stocks, real estate, other real-world assets, and even private equity (which is also a field I’m very interested in) can be tokenized through the same logic. I believe that in the future, the default way for investors outside the U.S. to access U.S. stocks will be through tokenized stocks—this is the significance of tokenization.

Haslinda Amin: So I want to ask, how long will it take for all this to be realized? We just talked about real estate tokenization; today there’s a grand story about the Red Cross organizing friends and promising real estate ideas. First, how feasible is this, and how quickly can it happen? And how will it develop?

Vlad Tenev: Mechanically, tokenizing real estate is very similar to tokenizing a private company. You are essentially purchasing one or more properties under a company, and then you tokenize that company, just as you would tokenize OpenAI or SpaceX.

Haslinda Amin: So, in terms of operational complexity, is real estate tokenization about the same as stock tokenization? Will there be higher complexity?

Vlad Tenev: We have already implemented both types of tokenization: stock tokenization is officially live in the EU. So the only remaining "complexity" is mainly ensuring that we obtain the necessary licenses and clarify regulatory rules across multiple jurisdictions. But I believe these issues will gradually be resolved. Tokenization is likely to start in Europe and then expand to other regions globally. Unfortunately, but realistically, the U.S. may lag behind—definitely later than Europe, and it might even be one of the last economies to achieve full tokenization. However, I believe the U.S. will eventually move towards tokenization.

Haslinda Amin: When you talk to regulators, what are the outstanding concerns or key worries regarding tokenization? Some believe Robinhood might be walking a tightrope on the tokenization issue. Is there any basis for this claim?

Vlad Tenev: I think it depends on the asset class. I feel there are some minor concerns, typical issues: customer protection, what happens if the value of the underlying asset diverges from the value of the token? How do you coordinate a solution? But I believe the biggest challenge in the U.S. is that we actually have a fundamentally usable infrastructure. It’s a bit like in Asia, where you have very, very fast high-speed trains, and people have long asked why the U.S. doesn’t have these high-speed trains. Instead, we have mid-speed trains. It’s like if you can get from point A to point B in 3 hours, then the incremental investment to shorten it to 2 hours might not be worth it. Similarly, we have a financial system in the U.S. that works quite well. Maybe you can’t trade tokenized stocks, but Robinhood has done quite well in providing stocks to the mass market. We now have over 25 million customers in the U.S., and through our innovations in traditional finance, you can trade 5 days a week, 24 hours a day. You still can’t trade on Saturdays, and we are working to resolve that issue. Basically, you have a system that works. So I think the additional effort required to transition from the existing system to full tokenization will take longer.

Haslinda Amin: Let’s make a bold prediction: when do you think tokenized stocks of companies like Apple will be able to trade globally? Will we have to wait until 2047?

Vlad Tenev: "Globally" is a big question. If you are in the EU and registered with Robinhood or a few other companies offering U.S. stock tokenization services, you can do it today. The real question is, we have the technology to achieve this in decentralized finance and around the world, but it will depend on the regulations of each jurisdiction.

Haslinda Amin: So can it be achieved within 5 years?

Vlad Tenev: If I had to predict, I think within the next 5 years, most major markets will introduce corresponding regulatory frameworks. But achieving nearly 100% full tokenization may take 10 years or even longer.

Haslinda Amin: Alright, let’s leave it at that for tokenization. Another area currently receiving a lot of attention is "prediction markets." It is reported that your platform's event contract trading volume has exceeded $4 billion, reaching $2 billion in just the third quarter. What is driving this growth?

Vlad Tenev: Yes, let me provide some background: we launched our prediction market service less than a year ago, initially centered around the U.S. elections.

Haslinda Amin: Riding this wave, the stock price has also surged significantly.

Vlad Tenev: It’s hard to say that the stock price increase is entirely due to the prediction market. However, we have indeed ventured into multiple business areas, such as our large retail cryptocurrency business. Clearly, the stock market performed well after the elections; and because many asset prices are directly influenced by election results, this reflects the value of prediction markets as a technology. For example, as an investor or trader, you might have the judgment: "If the Democrats or Republicans win the election, a certain type of asset price will be affected in a certain way," but that judgment is indirect—you still need to analyze "how it will specifically affect the price." Similar situations are common during earnings seasons: a company’s earnings performance exceeds expectations, but certain information revealed in the guidance might lead to a drop in its stock price. Prediction markets allow you to accurately "monetize" your views: for instance, in the presidential election, you might not know how Trump’s victory will affect Bitcoin or other cryptocurrencies, but you are confident that Trump will win—then you can trade accordingly in the prediction market, directly converting your judgment into profit. A report a few days ago stated that Robinhood's prediction market, a type of analytical report, achieved an annualized revenue of $200 million in less than a year, which demonstrates the enthusiasm of the retail market.

Haslinda Amin: This is indeed very interesting, but prediction markets are not without criticism, right? Some believe it blurs the line between financial trading and gambling.

Vlad Tenev: Yes, of course, there is definitely criticism. I think this is true for many innovations, and I believe prediction markets—hopefully we can all agree on this point—are a significant innovation and a transformation. People tend to compare it to things that existed before, right? A car is just a "horse-drawn carriage without horses." So I think prediction markets have some similarities to traditional sports betting and gambling. It also has similarities to active trading because they are exchange-traded products traded on exchanges. It also shares some similarities with traditional media news products because many people use prediction markets not for trading or speculation, but because they want to know who will win the election, what people think is most likely to happen with the Fed cutting rates? There’s a passive use case here, as a source of information. I think it’s not entirely any one of these three, but a hybrid that has the potential to change all three large industries.

Haslinda Amin: You just mentioned that you are involved in many businesses, right? How important will prediction markets be in Robinhood's larger blueprint? What kind of growth do you anticipate?

Vlad Tenev: Looking back, prediction markets are undoubtedly one of our fastest-growing business lines, possibly even the fastest. I mentioned earlier that we currently have 9 business lines with annual revenues exceeding $100 million, and prediction markets along with a few other businesses are in a rapid growth phase. I believe that in the future, the number of our business lines with annual revenues over $100 million will increase significantly. In the active trading space, we believe all asset classes are important—we want to be number one in all asset trading areas, and prediction markets are no exception. But Robinhood's long-term goal is to allow anyone globally to store all their funds and assets on our platform.

As our CEO said, the "financial super app" is fundamentally about becoming "the home for all users' funds." Clearly, we want to attract traders across all asset classes, but for each user, we want to be "the best choice for holding assets"—regardless of what assets the user holds, we aim to provide the lowest cost and the best user experience. However, I think the proportion of ordinary users' assets invested in prediction markets will not be very high. There will be a small portion in their portfolios, I guess in the mid-single-digit percentage range, that will systematically enter and exit these autonomous trades through prediction markets, options, futures, and sometimes individual stocks. We want to be the best platform for that portion, while also being the best platform for your retirement funds, passive management investments, and your banking needs—we are currently launching Robinhood Bank. We also have what I believe is the best credit card, with over 450,000 cardholders recently announced. Ideally, we are the place where you deposit your salary, where you can save with the highest possible annual yield, and manage all your investments and retirement funds. If you want to trade prediction markets or options, and you have an actively managed portion in your portfolio, we believe we can deliver.

Haslinda Amin: So essentially, it’s about creating a "one-stop financial service platform." Additionally, we have to mention the market volatility in different countries—recently, the market has been quite volatile, right? I remember data showing that during the last market fluctuation, about $300 billion in market value evaporated. I just want to know, are you fully committed to cryptocurrency? What does this really mean? What do you plan to do in the next 24 months?

Vlad Tenev: That’s an interesting question—"fully committed to cryptocurrency" might be your phrasing, not mine. I actually mean "fully committed to all areas," equivalent to "heavily invested in all tracks." I don’t know if my perspective is controversial to the audience here, but if I were to speak to a broader audience, it might raise eyebrows: I believe cryptocurrency and traditional finance have been in two separate worlds, but they will ultimately fully merge. The tokenization of stocks we discussed earlier, the tokenization of other real assets, and stablecoins as an early form of integration are all manifestations of this merging. This is a great example. I believe that the advantages of cryptographic technology over traditional methods are so significant that in the future, there will be no distinction. It’s a bit like how technology itself has long been viewed as a sector of the economy. It still is, with tech companies and everything else. I think cryptocurrency will undergo the same transformation; we are currently thinking of it as being in its own basket. But ultimately, everything will be on-chain in some form, and that distinction will gradually disappear.

Haslinda Amin: How do you view traditional finance, such as NASDAQ and your asset management company? How prepared are they for the upcoming changes?

Vlad Tenev: I think the challenge for traditional finance, especially at the infrastructure level, is that they have many stakeholders. If you think about where most of their revenue comes from, it’s not from crypto-related businesses. For many stakeholders in these companies, because they are already quite large, they will resist and adopt new technologies more slowly. They will be the laggards. They will wait until the technology is proven before they adopt it. I think that’s why for us, we must pursue a deeper vertical integration than is typically desired in traditional finance. We acquired Bitstamp, we have our own exchange. We are building our own chain because I don’t believe we can rely on traditional infrastructure providers at the forefront of innovation. I think they will eventually catch up, but it will take a long time.

Haslinda Amin: So for my last question, I want to ask about AI—You just mentioned a lot of impressive data. How should we prepare for the upcoming AI-driven era?

Vlad Tenev: I’ve actually thought a lot about this. First, I believe we should not fear AI. Many people have misconceptions about AI; for example, looking back to 1997 when AI first defeated a human grandmaster in chess, people thought, "That’s it, chess is over." But in fact, chess is now more popular than ever: the number of chess grandmasters today is twice that of ten years ago, and the prize money for major chess tournaments has increased by 2 to 3 times compared to before, with the entire industry thriving—despite being one of the first fields completely transformed by AI.

Last week, Andreessen Horowitz published a great article discussing radiology: the importance of radiology is unprecedented today, and the demand for radiologists still exceeds supply, with salaries continuously rising. But if you go back ten years, when AI first reached or exceeded human levels in radiological imaging diagnosis, people would tell you, "Don’t go to medical school for radiology; it’s a bad career choice." So I believe that for many fields, what AI brings is not "replacement," but "transformation." One of the areas everyone is currently focused on is software engineering—if I had to predict, in ten years, the number of practitioners in software engineering will be greater than it is now; it’s just that future software engineers must learn to use AI tools; if they don’t, they will face a significant disadvantage. But I still have great confidence in human beings and human creativity.

Therefore, I think the best way to respond to the AI era is to start trying to use these AI tools. Just like I see my kids using ChatGPT and Grok, that’s the trend of the future. Kids have an advantage over "older generations" like me because they have more time to explore, while I have many existing matters to handle, making it difficult to fully immerse myself in learning AI tools; I have to carve out specific time for it. So the best approach is to "get hands-on": you should use tools like Cursor, you should use Copilot, anything really, just to build things, create things, and do it for fun. I believe this is the best way to future-proof your career.

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