Robinhood Plans In‑Kind Redemption and Voting Rights for Stock Tokens

Robinhood announced that it intends to allow holders of its Stock Tokens to redeem the tokens for the underlying shares on a one‑to‑one basis and to exercise voting rights attached to those shares. The roadmap was outlined by senior vice president and general manager of international and crypto Johann Kerbrat in a post on X.

Current token structure

Stock Tokens are issued as tokenized debt securities under a Jersey prospectus. The base prospectus, dated June 25, states that redemption is settled in cash and that token holders do not receive physical delivery of the underlying shares or any shareholder voting rights. The prospectus also notes that the underlying shares may be lent out, with the issuer waiving voting rights during the loan period.

Planned changes

Kerbrat indicated that the first step is to scale adoption of Stock Tokens, followed by the introduction of in‑kind redemption (share‑for‑token exchange) and voting rights for eligible holders. The company’s internal “Say by Robinhood” platform, acquired in 2021, would be used to facilitate proxy voting.

Redemption mechanics

• Redemption will be processed through the issuer after KYC and AML checks.
• Redemption fees are zero for the first 90 days, then 0.05 % thereafter.
• If the issuer defaults, an independent security agent will sell the underlying shares and distribute cash proceeds to token holders.

Voting rights and share lending

The prospectus explicitly excludes voting rights for token holders. However, the final terms for certain series (e.g., Apple Series 14) allow the underlying shares to be lent to a prime borrower, who provides collateral equal to the market value of the lent shares. During the loan, the issuer waives voting rights.

Market context

Robinhood reports total value locked (TVL) of its Stock Tokens at over $170 million, with daily decentralized exchange volume exceeding $200 million on the Robinhood Chain. The largest tokenized equities include SPY, NVDA and SpaceX.

Regulatory framework

The token offering is governed by a prospectus approved by the Financial Market Authority of Liechtenstein, which defines redemption and voting terms. Any amendment to allow in‑kind redemption or voting would require a revision of the prospectus.