What is Costco Tokenized Stock (Robinhood Tokenized Stock) (COST)?

Quick Facts

• Issuer: Robinhood Assets (Jersey) Limited
• Underlying asset: Costco Wholesale Corporation (COST) shares
• Blockchain: Robinhood Chain (Arbitrum-based Layer 2)
• Token standard: ERC-20, tokenized debt security
• Backing: 1:1 by real custodied shares
• Availability: EU and EEA eligible customers only
• Trading hours: 24 hours a day, five days a week
• Dividend support: Yes, paid directly in-app

Introduction

Costco Tokenized Stock (COST) is a blockchain-based token that gives holders on-chain economic exposure to the performance of Costco Wholesale Corporation shares. It is issued by Robinhood Assets (Jersey) Limited as a tokenized debt security and lives on Robinhood Chain, the company's own Layer 2 blockchain built on Arbitrum.

The token is part of Robinhood's broader Stock Tokens programme, which brings over 190 US-listed equities on-chain for eligible European customers.

History & Background

Robinhood launched its Stock Tokens initiative to expand access to US equities beyond its domestic market. The product was introduced for EU and EEA customers, initially issued on Arbitrum before migrating to Robinhood Chain — the company's proprietary Layer 2 network.

The Costco token (COST) was among the first cohort of 190+ tokenized stocks made available under this programme, reflecting Robinhood's strategy to blend traditional finance with decentralized infrastructure.

How Costco Tokenized Stock (Robinhood Tokenized Stock) Works

COST is a tokenized debt security. Each token is backed 1:1 by real Costco Wholesale Corporation shares held in custody by a regulated third party. The token tracks the market price of the underlying equity, so its value moves in line with Costco's stock price.

Token holders do not receive legal or beneficial ownership of the underlying shares. Instead, they receive economic exposure through the debt security structure. Dividends declared by Costco are passed through to token holders directly within the Robinhood app.

Transactions settle on Robinhood Chain, which users access via self-custody wallets.

Tokenomics

COST tokens are minted and redeemed to reflect the actual shares held in custody. The token supply is therefore dynamic — it expands when users buy and contracts when they sell, staying in sync with the custodied share inventory.

Fees are kept minimal: Robinhood charges a 0.1% foreign exchange fee when euros convert to dollars on a purchase and again on a sale. There are no additional Robinhood commissions or spreads on the token itself.

Ecosystem & Use Cases

• Price tracking: COST mirrors the real-time performance of Costco Wholesale shares.
• DeFi participation: Tokens held in self-custody wallets on Robinhood Chain can interact with on-chain protocols such as Uniswap V3 (Robinhood) and other integrated DEXs.
• Dividend income: Eligible holders receive dividend pass-throughs in-app.
• Portfolio diversification: Provides EU investors exposure to a major US retail company without a traditional brokerage account.

Team, Governance & Community

COST is issued and governed by Robinhood Assets (Jersey) Limited, a regulated entity within the Robinhood Markets group. Robinhood Markets is a publicly traded US financial services company focused on democratizing access to investing.

The token does not have a community governance structure or DAO. All decisions — including custody, issuance, and compliance — are managed by Robinhood and its regulated subsidiaries.

Advantages

• Real share backing: Each token is collateralized 1:1 by custodied Costco shares.
• Low fees: A transparent 0.1% FX fee with no hidden Robinhood spreads.
• Extended trading hours: 24/5 access versus traditional market hours.
• Dividend support: Economic benefits of share ownership are passed to token holders.
• Self-custody: Tokens are held in user-controlled wallets on Robinhood Chain.

Risks & Challenges

• No ownership rights: Holders have economic exposure only, not legal ownership of Costco shares.
• Geographic restriction: Currently unavailable to US residents and limited to eligible EU/EEA customers.
• Issuer risk: As a debt security, COST carries counterparty risk tied to Robinhood Assets (Jersey) Limited.
• Regulatory uncertainty: The tokenized stock space is evolving and subject to changing rules across jurisdictions.
• Market risk: The token price is directly linked to Costco's stock performance, including all underlying equity volatility.

Long-Term Vision

Robinhood's tokenized stock programme — including COST — represents a broader ambition to merge traditional equity markets with blockchain infrastructure. By operating Robinhood Chain as a dedicated Layer 2, the company aims to offer a seamless, low-cost, and transparent investing experience to a global audience.

As regulatory frameworks for tokenized securities mature, products like COST could serve as a blueprint for how real-world assets are traded, settled, and held on-chain at scale.