Robinhood’s Ethereum Layer-2 Testnet Signals a Strategic Bet on Regulated Onchain Finance

Robinhood has taken a decisive step in its long-term blockchain strategy with the launch of the public testnet for Robinhood Chain, a financial-grade Ethereum Layer-2 network built on Arbitrum technology. Announced at Consensus Hong Kong, the testnet marks the first time developers can publicly interact with a blockchain that Robinhood intends to use as core infrastructure for tokenized securities and other regulated onchain assets.

According to Johann Kerbrat, senior vice president and general manager of Robinhood Crypto, the chain is designed to support around-the-clock trading, near-instant settlement, and self-custody, while embedding regulatory requirements directly into the protocol itself. That design choice reflects a clear departure from most general-purpose Layer-2 networks, where compliance is typically handled at the application or smart contract level rather than within the chain’s architecture.

Robinhood Chain enters public testing at a delicate moment for the company. The firm recently reported $1.28 billion in fourth-quarter revenue, falling short of analyst expectations as crypto trading volumes softened during a broader market downturn. Bitcoin’s sharp decline during the quarter weighed on transaction-based revenue, underlining Robinhood’s ongoing challenge: reducing its dependence on cyclical trading activity.

The new chain is part of that response. Robinhood previously introduced tokenized U.S. equities to European users through Arbitrum in mid-2025, eventually expanding the product to more than 1,000 stock and ETF tokens across the EU and EEA. From the outset, the company viewed that rollout as an interim step. Arbitrum’s modular design made it possible to launch quickly, then transition to a proprietary network once scale and regulatory clarity justified the move.

Customization is the central motivation. Tokenized securities require strict controls around minting, burning, and transferability, with rules varying by jurisdiction. By encoding those requirements at the chain layer, Robinhood aims to create infrastructure that can support regulated financial products without relying on complex application-level workarounds. While the chain itself remains permissionless for developers, the financial products built by Robinhood on top of it are explicitly designed for compliance-first use cases.

The company’s ambitions extend well beyond public equities. Kerbrat has indicated that the same tokenization engine could eventually support private equity, real estate, art, and other real-world assets. A full migration to Robinhood Chain is also expected to enable true 24/7 trading, removing the remaining constraints imposed by traditional market schedules, and to unlock integrations with liquidity pools and lending protocols.

To seed activity, Robinhood is launching a global developer push, including hackathons across multiple regions with a combined prize pool of $1 million. The focus is squarely on financial applications such as decentralized exchanges, perpetual trading, and lending, areas that align closely with Robinhood’s existing brokerage and crypto offerings.

Geographically, the testnet debut in Hong Kong also highlights Robinhood’s growing Asia-Pacific focus. The company’s acquisition of Bitstamp in 2025 expanded its regulatory footprint and institutional reach, particularly in markets such as Singapore and Indonesia, where regulatory discussions have centered on compliance rather than resistance.

The public testnet represents the first phase of a longer rollout, with no firm timeline yet for mainnet. Still, the message is clear. Robinhood is positioning itself not merely as a trading app experimenting with crypto, but as a builder of regulated onchain market infrastructure. Whether that vision translates into durable revenue remains uncertain, but the strategic direction is now firmly onchain.