In a related effort, Kraken is promoting its xStocks initiative as a global standard for tokenized equities, emphasizing the importance of collaboration over individual branding to prevent liquidity fragmentation.

Looking ahead, Robinhood's CEO Vlad Tenev has indicated plans to transition the entire Robinhood ecosystem on-chain, which would involve leveraging their own blockchain for trading and settlement.

Initially, Robinhood plans to launch its tokenized stocks and ETFs in the European Union, with aspirations to expand further once there is greater regulatory clarity.

Robinhood is actively developing an Ethereum layer-2 scaling network on Arbitrum to enhance the trading of tokenized assets, as revealed by Robinhood Crypto General Manager Johann Kerbrat.

This strategic decision to build on Arbitrum is driven by the goal of connecting with the broader Ethereum ecosystem, which will facilitate better integration and collaboration with other projects.

Kerbrat raised concerns regarding liquidity fragmentation, noting that multiple digital tokens for the same assets, such as Tesla tokens from both Kraken and Robinhood, complicate the market.

A significant technical advantage of Arbitrum is the introduction of Arbitrum Stylus, which allows developers to utilize various programming languages for smart contract development, potentially attracting a diverse range of developers.