Robinhood reviews the GameStop incident: from T+2 to T+1, stock tokenization is the future

Robinhood Reflects on the Five-Year Anniversary of GameStop, Pinpoints the Root Cause of Trading Restrictions in the Clearing System, and Advocates for Market Restructuring through Stock Tokenization.

It has been five years since the GameStop incident that shook global markets in 2021. Robinhood CEO Vlad Tenev recently published a lengthy article reviewing this financial crisis, directly identifying the true culprit behind the trading restrictions at the time—not retail speculation or broker favoritism toward Wall Street—but the outdated settlement and clearing system of the U.S. stock market.

When we look back at the GameStop event, it was a battle driven entirely by Reddit—a “Community vs. Wall Street” war. Institutions released short reports, only to be short-squeezed by retail investors. Tenev described: “When you combine old, slow financial infrastructure with real-time reactions and community-driven market behavior, disaster is almost inevitable.”

Robinhood CEO: The GameStop Incident Faced Immense Pressure

Tenev pointed out that in 2021, Robinhood and several other brokerages were forced to suspend some meme stock (“most notably GameStop”) “buy” transactions—not due to subjective company decisions, but because of enormous capital requirements from clearinghouses.

At that time, U.S. stocks still used the T+2 (trade date plus two days) settlement system. During unprecedented trading volume and volatility in stocks like GameStop, risk management rules at clearinghouses required brokerages to post large amounts of margin before settlement to prevent default risk. As a result, capital requirements skyrocketed, trading was restricted, and millions of retail investors were angered.

When we look back at the GameStop event, it was a battle driven entirely by Reddit—a “Community vs. Wall Street” war. Institutions released short reports, only to be short-squeezed by retail investors. “When you combine old, slow financial infrastructure with real-time reactions and community-driven market behavior, disaster is almost inevitable,” Tenev described.

From T+2 to T+1, Stock Tokenization Is the Future

After the incident, Robinhood strongly lobbied regulators to reform the clearing system, ultimately leading to the U.S. stock market reducing the settlement cycle from T+2 to T+1. Tenev even stated outright that this was one of the few genuinely structural achievements during SEC Chair Gary Gensler’s tenure. However, the problem was not truly solved; in an era of 24-hour news cycles and instant trading responses, T+1 still effectively means that Friday trades become T+3, and during long holidays, it could extend to T+4.

Vlad Tenev pointed out: “This is still too slow, and risks still exist.” But the solution is not patching the system but replacing it with a new one: stock tokenization.

Tenev believes that the real breakthrough lies in tokenization (asset tokenization). Converting stocks into tokens on the blockchain can enable real-time settlement, 24/7 trading, native fractional shares, and lower clearing and capital costs. More importantly, it significantly reduces systemic risk, allowing clearinghouses and brokerages to avoid bearing enormous uncertainty during settlement periods, thereby removing the justification for trading restrictions.

In fact, Robinhood has already launched over 2,000 tokenized versions of U.S.-listed stocks in Europe, allowing European investors to hold and receive economic benefits equivalent to dividends. Tenev revealed that in the coming months, Robinhood plans to further open up 24/7 trading, DeFi integration, self-custody, stock lending, staking, and other applications.

Tenev emphasized that the technological feasibility has been proven; the real obstacle lies in regulatory clarity. He pointed out that recent developments in the U.S. regulatory environment present a rare window of opportunity. The current leadership at the SEC has shown greater openness to innovation and experimentation. Congress is reviewing the CLARITY Act, which requires the SEC to establish a modern regulatory framework for tokenized assets. The key significance of legislation is to ensure that this path will not be overturned due to future political changes.

• This article is reprinted with permission from: 《Chain News》
• Original title: 《Robinhood Reflects on the Fifth Anniversary of the GameStop Incident: Stock Tokenization Is the Future》
• Original author: Neo