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"Tenev Pushes RWA Tokenization for Private Market Access"

Coin WorldWednesday, Jan 29, 2025 6:05 am ET

1min read

Exploring the Potential of RWA Tokenization in Enhancing Access to Private Market Investments

Robinhood CEO Vlad Tenev is advocating for the tokenization of real-world assets (RWAs) as a method to democratize private market investments. The trend of tokenization is garnering global attention, with platforms like Coinbase ramping up their efforts in the blockchain-based securities space.

“Tokenizing private-company stock would enable retail investors to invest in leading companies early in their life cycles before they potentially go public at valuations of more than $100 billion,” Tenev emphasized in a recent statement.

Vlad Tenev champions RWA tokenization to democratize private investments, highlighting regulatory challenges and the growing interest in tokenized assets.

In an opinion piece published in The Washington Post, Tenev highlighted the stark investment gap in private markets, citing companies like OpenAI ($157 billion valuation), SpaceX ($350 billion), Canva, Revolut, Stripe, and Anthropic. According to Tenev, these firms remain privately held, with early-stage investments restricted to a small elite of accredited investors.

Current regulations, such as the “accredited investor” rule, exclude approximately 80% of US households from these lucrative opportunities. According to Tenev, tokenization offers a solution.

“Finally, the US is making up for lost time and taking crypto seriously. So many promising strides forward. It is time to even further expand our understanding of what’s possible,” Tenev shared on X.

Blockchain technology allows for the creation of digital tokens representing ownership stakes in real-world assets, making them tradable on decentralized platforms. This approach would enable retail investors to access private company shares before they go public, potentially benefiting from massive early-stage growth.

Moreover, it would provide private companies with a new avenue to raise capital without the burdens of a traditional IPO.

Despite the technological feasibility of tokenization, regulatory challenges remain. The Securities and Exchange Commission (SEC) oversees private-company stock and securities trading in the US. However, existing laws do not account for blockchain technology. Similarly, the lack of clarity has hindered the development of tokenized securities platforms.

Meanwhile, other regions, including the European Union, Hong Kong, Singapore, and Abu Dhabi

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