"Our goal is to provide all customers with the same access, opportunities, and strategies as high-net-worth individuals."

Organized & Compiled by: Deep Tide TechFlow

Guest: Vlad Tenev, Robinhood CEO

Host: David Hoffman

Podcast Source: Bankless

Original Title: Vlad Tenev Wants to Tokenize SpaceX & OpenAI on Robinhood

Broadcast Date: March 31, 2025

Key Points Summary

Robinhood CEO Vlad Tenev returns to Bankless for an in-depth discussion on asset tokenization, cryptocurrency regulation, and Robinhood's new products.

In the interview, Vlad paints an exciting picture of the future: bringing equity in companies like SpaceX and OpenAI to ordinary investors through tokenization technology. He also explores how prediction markets can become "truth machines" and details Robinhood's three latest products: Strategies, Cortex, and Banking.

Highlights

• Our goal is to provide all customers with the same access, opportunities, and strategies as high-net-worth individuals. This service philosophy is similar to the promise of the iPhone: how to provide users with a luxurious and prideful product experience at an affordable price.

• Among our three new businesses, Robinhood Strategies acts as your digital investment advisor, Robinhood Cortex serves as your research assistant, and Robinhood Banking functions as your private banker.

• The SEC announced the end of investigations into cryptocurrency and some other companies in the industry, which gives us a sense of relief, feeling that we as a company and an industry can move forward without facing this endless assault.

• If you can issue a token corresponding to a company on a blockchain within a jurisdiction, you will immediately access this increasingly liquid global market with hundreds of millions of participants. I believe this will ultimately lead to acceptance in the U.S.

• The stablecoin bill may be the first to land, which is a positive signal for the industry. But we are more focused on the market structure bill, as it will provide a clear framework for how crypto assets integrate into the real-world financial system.

• Just as stablecoin legislation can promote the dominance of the dollar, I believe tokenized securities can truly drive the dominance of U.S. companies in the global market, thereby increasing the shareholder pool for U.S. companies.

• I have always supported fair competition in the market. I believe the relationship between traditional banks and the crypto space may become more integrated rather than differentiated in the future. Some advantages of the traditional banking system can be borrowed into the crypto space, while many innovations in crypto technology are also suitable for integration into the banking system.

Views on the New Government

David:

Vlad, it's great to have you back on the show. Welcome to Bankless.

Vlad:

Thank you for having me. I'm glad to be here again.

David:

I want to start with an important topic in the cryptocurrency space—the new changes in the U.S. regulatory environment. The new government's policies have opened many doors of opportunity for the U.S. crypto industry, especially for institutional investors who have been hesitant due to regulatory uncertainty. So, under the new administration, what new opportunities does Robinhood have? What businesses can you now pursue that were previously unattainable? In which areas will you prioritize your actions?

Vlad:

I think the most direct change is the cessation of regulation through enforcement, a significant improvement is that we are no longer facing a comprehensive attack on all aspects of crypto business. For example, the SEC announced the end of investigations into cryptocurrency and some other companies in the industry, which gives us a sense of relief, feeling that we as a company and an industry can move forward without facing this endless assault. The previous administration clearly believed that cryptocurrencies should not exist in substantive form and certainly should not integrate with the traditional financial system. So I think this is a significant advancement, and there are currently two important pieces of legislation in progress.

Additionally, the legal status of Memecoins has also become clearer. Recently, the SEC released a memo clarifying that Memecoins do not fall under securities. While this is a relatively simple legal analysis, previously each company had to analyze each coin separately, which was time-consuming and costly. Robinhood has always placed a high priority on compliance and has conducted rigorous securities analysis for each coin. Therefore, this legal clarity is a significant help for us.

Similarly, clarity regarding whether staking constitutes a security is also increasing. This is also a good thing, as staking is essentially people contributing their computing power to support the blockchain. There are staking providers aimed at reducing the complexity of this process. Generally, this leads to more yield, putting more crypto in customers' pockets. Therefore, the lack of clarity is actually harming American consumers, as they cannot obtain more yield from more regulated platforms.

So having this clarity is a good thing. Currently, there are two important pieces of legislation moving forward: one is about stablecoins, and the other is about market structure. The stablecoin bill may be the first to land, which is a positive signal for the industry. But we are more focused on the market structure bill, as it will provide a clear framework for how crypto assets integrate into the real-world financial system. For example, which crypto assets are securities and which are commodities? What steps do we need to take as a platform to list crypto asset securities? The answers to these questions will unlock tremendous potential for the industry.

I think these are big questions, and legislation will help us answer them and unlock the true potential of crypto technology, which we are very much looking forward to.

You mentioned that some companies are trying to combine stablecoins with banking services, such as generating yield through staking or liquidity pools. I believe the market structure bill will pave the way for such products while also bringing more competition to the industry. Currently, stablecoins have not fully reached this stage because the regulations surrounding yield-generating stablecoins are still unclear. Therefore, more regulatory clarity is needed to establish them on a firmer foundation, but we are optimistic about their arrival, and I believe things are moving in a positive direction.

David:

If I understand correctly, many potential product lines are currently in the theoretical stage. We can only truly enter the product rollout and construction phase once the market structure bill is passed, right?

Vlad:

Yes, for example, a yield-generating stablecoin that directly pays interest to holders operates similarly to a money market fund. The underlying assets of stablecoins typically include safe assets like government bonds. Therefore, stablecoins and money market funds are structurally very similar, but due to the lack of regulatory clarity, they are viewed as different things. I think this is where regulation can play a role.

Benefits of Tokenization

David:

What about the area of tokenization? I think this is a very hot topic because I see it as a bridge between traditional banks, traditional finance, and the crypto world, allowing us to tokenize more assets and start leveraging the value of public permissionless blockchains.

What role does Robinhood play in this tokenization movement? I assume you are optimistic about it. Do you see yourselves as issuers or platforms? Will Robinhood create tokenized products, or do you prefer to be a marketplace for these products? What is your position in the tokenization tech stack?

Vlad:

By this definition, tokenization is the representation of non-crypto native assets on the blockchain so that they can be freely traded.

We have already seen this with stablecoins, which are essentially tokenized government bonds. Additionally, Paxos has a tokenized gold product, which is a very interesting product. We have actually partnered with Paxos and several other companies to launch USDG, the U.S. Dollar Global Network, aimed at establishing a stablecoin that is usable globally and pays attractive yields to holders.

The next step is clearly the tokenization of securities, and we are very excited about this. It allows you to own a company in the same way that stablecoin legislation ensures the dollar's dominance globally, and I think this is why people are excited about it. Everyone wants the U.S. dollar and U.S. government bonds to be accepted and purchased, and there is high demand for these products globally.

Therefore, just as stablecoin legislation can promote the dominance of the dollar, I believe tokenized securities can truly drive the dominance of U.S. companies in the global market, thereby increasing the shareholder pool for U.S. companies. Currently, investing in U.S. companies from abroad is very difficult. Just as stablecoins make obtaining dollars easier, tokenized securities will make accessing U.S. companies simpler. So we are excited about this. I believe it benefits companies and also benefits people outside the U.S. because they will be able to access these effective wealth-building tools, which is also a way to diversify, especially in the face of sharp local currency depreciation, helping them cope with the loss of purchasing power.

I think this is also beneficial for our entrepreneurs in terms of capital formation. If it becomes easier for the U.S. to raise funds by entering the global crypto market, we will see more interesting companies. A few months ago, we actually published an op-ed in The Washington Post making the case for tokenizing private securities. Currently, investing in private companies like OpenAI or SpaceX is very difficult, and I believe crypto can help solve this problem. Therefore, tokenizing private companies would be beneficial for both companies and investors. What amazes me is that there are still many restrictions on investing in companies like SpaceX and OpenAI, while we have a clear definition for Memecoins, and people can essentially invest freely in these tokens.

Tokenization of SpaceX

David:

Based on the information available, it seems that there is indeed trading of SpaceX equity in the market. Finding a way to access SpaceX equity is not crazy. So I think what you are saying is that since the market already exists in the private market space, we can tokenize this equity and use crypto technology to transform it into a more formal and structured market. Then I imagine Robinhood would be happy to be the marketplace for tokenized equity. If I put this information together, it seems like a very feasible future. Do you think this is your roadmap? How close are we to tokenizing SpaceX equity on Robinhood?

Vlad:

Yes, I believe Robinhood is at the intersection of traditional finance and crypto. We have all the crypto technology and the infrastructure of traditional finance. Therefore, I think tokenized equity is one of the important areas we can contribute to the entire ecosystem.

The future of tokenized equity may operate similarly to ETFs (Exchange-Traded Funds). ETF issuers hold a basket of securities and then issue shares of the ETF in some way, which is essentially a precursor to tokenized securities. In this process, if you bring a basket of securities to the ETF issuer, they will exchange it for shares of the ETF, and vice versa; you can use the ETF to redeem the underlying basket of securities. This is an analogy to what has already happened in traditional finance, and tokenization can evolve using crypto technology.

Alternative to IPOs

David:

While the number of public market IPOs has not significantly decreased, the overall trend is downward. This is mainly because the costs of IPOs are prohibitively high, and the barriers for companies to enter the public capital markets are increasing. Do you think this trend will drive the prospects for tokenization in the private market? Or is it too complex in terms of national compliance and financial regulations?

Vlad:

I believe the trend of tokenized securities indeed paves the way for IPO alternatives. While it may not be achievable in the U.S. in the short term, this trend is gradually emerging in international markets. Many countries are establishing frameworks for issuing crypto asset securities, and crypto is inherently global. Therefore, if you can issue a company's token on a blockchain within a jurisdiction, you will immediately access this increasingly liquid global market with hundreds of millions of participants. I believe this will ultimately lead to acceptance in the U.S.

For private companies, this is essentially primary capital in the early stages of the company's formation, equivalent to raising funds from shareholders in a traditional IPO. In the early stages, primary capital is very useful because I remember when I was an entrepreneur running a seed-stage company, fundraising consumed a lot of energy and resources. And when you are a small company, these resources are very important. If tokenization can allow entrepreneurs to quickly access the global capital market, it will be an excellent option for early founders. It not only helps more companies secure funding in the riskiest stages but also provides investors with potential high-return opportunities.

For mature private companies like OpenAI or SpaceX, the value proposition is different. At this point, it may not be very interesting for the founders of these companies because they have already raised substantial funds and may be planning an IPO or other things, but it is very attractive for employees. These companies have thousands of employees who are looking for liquidity, and they do not know when there will be an IPO or liquidity event, so employees want to diversify to some extent, which becomes a strong value proposition.

Currently, there are some secondary platforms, such as Equity Zen or Forge, that operate in this space and actively reach out to employees of these companies because this is an audience seeking diversification and selling secondary shares. However, the problem with these models is that liquidity is actually fragmented, so the platforms themselves must figure out how to acquire supply and bring it in, while crypto benefits from interoperability, allowing for free trading on the blockchain and immediate access to global liquidity, which is why I think it is an excellent technical solution.

David:

There are indeed some trends clearly pointing in this direction. Additionally, there are many excellent companies, such as SpaceX and OpenAI, that are private and seem to have no intention of going public. These AI labs, as a broad category, do not actually have public equity, or companies like Facebook or Google are too large to serve as a tool for diluted investment.

Vlad:

As a retail investor, if you want to access AI, your choices are very limited. You can choose NVIDIA, Alphabet, or Tesla, but you cannot access interesting AI companies like OpenAI, Anthropic, or Perplexity.

David:

Looking back at market trends over the past few decades, it can be seen that opportunities in modern society are no longer in the public market but in the private market. As I mentioned earlier, the compliance costs of IPOs are increasing, while crypto provides a technological solution. I see multiple different tailwinds pointing to this inevitable conclusion: tokenizing private market equity and making it a sort of pseudo-public market.

Prediction Markets

David:

I also want to talk about prediction markets, as Robinhood is also involved in this area. Robinhood has a slogan of "Everything is a Market," is this my misunderstanding, or do you indeed have such an official brand goal?

Vlad:

We do not use that slogan. Our company's name is Robinhood Markets, which is our parent company. Therefore, our mission is "democratizing finance for all." This means we believe in the power of markets and are committed to allowing everyone to participate fairly in market trading. Generally speaking, if this is an institutional market and retail users are interested, they should also be allowed to participate in a competitive environment on equal footing with institutions.

This applies to prediction markets as well. But I think prediction markets have additional value. For me personally, having a robust prediction market means there are social benefits beyond trading, which means you can get better predictions on various events. We saw this in elections, where prediction markets provided relevant information hours or even days before traditional media. I think you will see this across multiple different categories. Therefore, I believe prediction markets are "truth machines," they are an evolution of news, they are an evolution of newspapers, and in some cases, you can even get news through prediction markets before events occur.

Kalshi Platform

David:

Like many people, I hosted an election party. We watched mainstream media election coverage while discussing the election situation with friends in the crypto space. In addition to traditional news, we also opened the Polymarket platform. Everyone took turns switching between Polymarket and mainstream media, and the data from Polymarket was more real-time and clearly more interesting. Recently, Robinhood released an announcement, and I will read it, then we can discuss prediction markets more clearly.

Recently, Robinhood launched a prediction market center that allows customers to trade outcomes of some of the world's biggest events. The first markets include predictions for the Federal Reserve's fund rate cap and the upcoming NCAA men's and women's basketball championship results. While these two markets are of different types, they are both attractive. I think you have partially answered my question about why Robinhood wants to integrate prediction markets into the platform. However, it is worth mentioning that this prediction market product is powered by Kalshi. Can you talk about the partnership between Robinhood and Kalshi? What specific role does Kalshi play in this prediction market?

Vlad:

Kalshi is a Designated Contract Market (DCM). You can think of a DCM as similar to an exchange, like a stock exchange. In the stock space, there are exchanges like NASDAQ and the New York Stock Exchange. Brokers, including Robinhood, connect to these exchanges or trade on these exchanges, and buyers and sellers essentially cross at these exchanges, which essentially create a market.

In the stock space, Robinhood is a broker, and we are responsible for receiving customer orders and routing them to market makers or sending them directly to exchanges. In the futures market, which is regulated by the CFTC, there are designated contract markets (DCM), which are places where buyers and sellers meet, just like exchanges. Then there are Futures Commission Merchants (FCM), and in this case, Robinhood is an FCM. We are responsible for customer relationships and interfaces, and then we route orders to the DCM and match them through market makers.

So you can think of Kalshi as similar to NASDAQ or NYSE, while we play the traditional role of a broker. In fact, during the presidential election, we also connected to a different DCM called Forecast Decks, which is a subsidiary of Interactive Brokers. Therefore, we have the ability to connect to multiple DCMs and provide different products offered by these exchanges. In fact, DCMs have ultimate responsibility for listing contracts. Therefore, all contracts we list must be listed on a DCM to be available for us to offer.

David:

So you cannot provide your own prediction market. It must be done on a third-party DCM.

Vlad:

Yes, in fact, platforms like Polymarket cannot legally operate prediction markets in the U.S. because they are not DCMs. They use a crypto-based approach. I think this is one of the issues that needs clarification in the market structure legislation we discussed earlier. The CFTC regulates these as commodities and has corresponding licenses. So, will prediction markets like Polymarket operate under this regulation? Or will there be other regulations because it is crypto? These are all questions we need legislation to allow large prediction markets like Polymarket to operate in the U.S.

Future of Prediction Markets

David:

I think many listeners would hope to use Polymarket in the U.S. The last question about prediction markets is, currently, Robinhood's prediction markets start with the Federal Reserve fund rate and men's and women's basketball games, so what is the future direction? What prediction markets can users participate in trading on Robinhood next?

Vlad:

With the launch of our latest round of contract markets, we have evolved from being able to list only one contract to being able to list hundreds of contracts simultaneously. Of course, this involves the operational complexities of clearing, payments, and setting up new contracts, especially those that rely on data from previous contracts. This has already been reflected in the predictions for men's and women's college basketball. But soon, we will be able to expand the number of contracts from hundreds to thousands, which will open the door for various types of prediction markets.

We are very interested in prediction markets related to the economy, and I am also very interested in the progress of artificial intelligence. There are some very cool prediction markets that can provide clear information about different AI developments, and I think our customers will be very interested in this. In fact, I believe the coverage of prediction markets should be as broad as newspapers. Newspapers have front-page news, sports sections, business sections, and arts and leisure sections, and prediction markets can also be categorized similarly to provide users with comprehensive information.

Prediction markets as truth machines, I believe this is one of the reasons why people in the crypto space are so interested in prediction markets. In the past, there have been some quite significant and sensitive geopolitical events, such as the conflict between Israel and Iran, where Polymarket had a set of prediction markets that actually provided real insights into people's views on future events, while these are also highly impactful and sensitive topics. If we enter an unstable geopolitical future, people will be more eager to understand the market's views on the probabilities of certain outcomes. What do you think about the idea of integrating high-risk global macro geopolitical prediction markets within Robinhood?

Vlad:

I think this is important for society. Currently, the CFTC has guidelines for prediction markets and event contracts, essentially stating that prediction markets that contradict public interest should not be listed. I think this is a relatively vague general category, but we should try to limit it because I truly believe that the vast majority of prediction markets are in the public interest.

Three New Business Areas of Robinhood

Robinhood Banking

David:

You held a rather significant event, similar to the Robinhood Summit, announcing three different new business areas: Robinhood Strategies, Robinhood Banking, and Robinhood Cortex. Let's start with Robinhood Banking. Can you elaborate on this product and why this product line was created?

Vlad:

The overall inspiration comes from our goal to provide all customers with the same access, opportunities, and strategies as high-net-worth individuals. We want to put a complex, high-net-worth family office-style financial team in everyone's pocket and offer it to our Gold subscribers for just $5 a month. This service concept is similar to the promise of the iPhone: how to provide users with a luxurious and prideful product experience at an affordable price.

So, this is the main thread behind the three products we announced at the Gold event. Strategies is your digital investment advisor, Cortex is your research assistant, while Robinhood Banking acts as your private banker. I believe this will also be the first AI product we launch within Robinhood in the future. Therefore, in the future, you will see the latest intelligent models and reasoning models further integrated into the product experience, truly providing you with an excellent experience where each part can understand each other.

Robinhood Cortex

David:

When I saw this announcement, I thought, "What? Robinhood released an AI agent?"

However, upon further investigation, I found its functionality to be quite meaningful. Can you give an example of how users would use Robinhood Cortex? I guess it will be embedded in the Robinhood app, allowing users to ask various finance-related questions. So, is it a finance-themed large language model (LLM)? Or is it a pop-up window? Can you elaborate on this?

Vlad:

Currently, in the Robinhood app, it has two application scenarios. One is to answer current stock dynamics. If you use Robinhood, you occasionally receive notifications about market fluctuations, such as a stock rising or falling by 5%. Then, a typical use case is to check that stock and figure out what happened. Cortex will answer this question on the stock detail page, trying to explain the reasons behind the fluctuation, which is part of the stock dynamics.

The other use case is* options trading*. Options are very complex; you need to handle a lot of information and must be quite experienced to construct an options trade, especially in the case of multi-leg options trading (involving multiple trading combinations). Cortex achieves this through a trade builder, predicting the future movement of a stock at a certain time and constructing options trades to help you execute that prediction. It’s quite a magical experience. We did a demonstration at the Gold event where you could select a specific stock, make a prediction, and then it would generate a trade plan that could be executed directly or guide you to our upcoming side-by-side options chain interface.

David:

**The core idea of Cortex is to transform the investment intentions expressed by users in natural language into trading strategies. Users input their thoughts, and the **AI **processes this information and returns some possible *options trading* combinations, such as "Here are some trading plans you might be interested in." Is this the basic logic of Cortex?**

Vlad:

But its capabilities go beyond that. Cortex integrates all available information, including real-time market data, technical indicators, and news updates from multiple sources. By consolidating this data, it can not only generate predictions but also provide users with insights and analyses to help them make better decisions.

David:

**Can you introduce what makes this *LLM* unique? I guess it’s not just a simple ChatGPT shell, but rather optimized for the financial domain. What is special about its training data, or what unique processing has been done in later training to make it a finance-focused LLM for Robinhood?**

Vlad:

Traditional large language models typically do not have access to real-time market data or financial data. Their data is often outdated, so they cannot accurately tell you the current price of a stock. Moreover, they are prone to "hallucinations" when providing financial information, generating inaccurate or false content. To address these issues, we built a technical layer to ensure that the data users receive is real-time, interpretable, and avoids hallucinations. This solves two key problems that most LLMs face in financial applications.

David:

If we don't handle this well, hallucinations in a financial context can be catastrophic.

Vlad:

Yes, but fortunately, we have a real data source. Unlike writing a history paper, the veracity of financial data can be verified. Therefore, we can set strict "guardrails" to ensure that the generated content is accurate and can quickly identify and correct hallucinations.

David:

This may be Robinhood's main competitive advantage in developing a financial AI assistant. You have real-time market data, user behavior data, and a wealth of financial-related resources, all of which are integrated into the capabilities of the LLM.

Vlad:

Yes, this is an advantage. Another advantage is that you can trade within our app. If we can closely integrate Cortex's suggestions with the context of users' actual operations, its practicality will be greatly enhanced. We don't want to just place a chat box in the app because people wouldn't know how to use it. We want Cortex to not only generate smooth responses but also avoid lengthy and hallucination issues, which is also our direction of effort.

Robinhood Strategies

David:

Regarding the Strategies part, is it possible to expand this product into the crypto asset space in the future? After all, in the crypto industry, many people are asked similar questions by friends, such as "What cryptocurrency should I buy? Or how should I invest in crypto assets?" because they really don't know. If the strategies product could support some complex, crypto-centric investment strategies, that would be very attractive. So, what preparations are needed to achieve this?

Vlad:

From a technical standpoint, we haven't encountered any obstacles. In fact, we have a feature list that includes dozens or even hundreds of features that can be added to the strategies product. We want to prioritize meeting our customers' most pressing needs.

Currently, we have laid a solid foundation. We chose to start with individual stocks because most other digital advisor platforms only support ETFs (Exchange-Traded Funds). We developed the capability to include single assets and individual stocks in portfolios. Of course, we also support ETFs and designed an intuitive interface, such as clearly displaying asset allocation through pie charts. Additionally, we offer an automatic rebalancing feature to help users adjust their portfolios based on market changes, making investing more hassle-free.

I believe we have built a good foundation. We want to start with individual stocks because most other digital advisor platforms only offer ETFs. Therefore, we built the capability to include single assets and individual stocks in portfolios. Of course, we also support ETFs, and we have built a good interface with a pie chart to clarify your asset allocation. We can rebalance on behalf of clients. So, this is as close as possible to a "worry-free investment" button.

I also want to specifically mention that one unique aspect of the strategies product is that it disrupts the traditional fee model. Traditional investment advisors typically charge asset management fees (AUM) around 1%, while robo-advisors have lower rates, about 0.25%. However, this proportional fee model has a problem: as the portfolio size increases, the fees users pay also increase, but the value of the services provided by the advisor does not grow in tandem. For example, managing a million-dollar portfolio is not more complex than managing a hundred-thousand-dollar portfolio, yet users have to pay ten times the fee. This model can leave high-net-worth clients feeling dissatisfied because they pay more but do not receive more service value.

To address this issue, Robinhood Strategies adopts a capped fee model, where the fee will not exceed $250 regardless of the size of your portfolio. Therefore, for users with a million-dollar asset base, switching to Robinhood Strategies is very cost-effective.

David:

How does this fee model affect the product's incentive structure? Because it is no longer a business driven by asset management scale (AUM), but rather shifts to a customer number-oriented model. So, how does Robinhood benefit from the user growth of the strategies product, especially with the fee cap set at $250 per customer?

Vlad:

Indeed, this model attracts more high-net-worth clients to transfer their funds to our platform. The revenue we derive from this primarily comes from asset management fees. Additionally, we also benefit from Robinhood Gold subscriptions. We have found that once users become subscribers of Robinhood Gold and place a significant portion of their wealth with us, such as investing $1,000, they gradually discover more value and tend to use more of our services, such as credit cards and self-trading features.

So our goal is to acquire as many customer financial relationships as possible and make it easier for them to transfer all their funds to Robinhood. At the same time, as the total amount of funds we manage increases, our revenue will grow accordingly.

Cash Delivery

David:

I have two more questions about this new product line. One of them is about the cash delivery service you launched. I liken it to a "cash delivery service similar to Uber Eats"; I wonder if this analogy is accurate. Can you talk about why you launched such a service? How does it specifically work? For example, how do users operate in the app, and how is cash delivered to them?

Vlad:

You can think of it this way; we are actually entering the logistics field, which excites me a lot. This service is primarily aimed at high-end clients of private banking, and there are two reasons behind it.

First, we do not have physical branches. So we thought, how can we provide users with digital banking services without compromise? Without branches, when users need cash, they often have to go to convenience stores like 711 or CVS to withdraw money. But this clearly does not align with the high-end positioning of private banking services. By the way, currently, 16% of payments in the U.S. are still made in cash. Although the usage of cash is gradually declining, it remains very important in many scenarios. Therefore, we need a new solution to proactively "deliver" banking services.

Nowadays, these on-demand logistics platforms have become very powerful. They can deliver things to you in 10 or 15 minutes; you can buy an iPhone and have it delivered to your home. So this is a solution to the problem. Of course, we will not take on the entire logistics chain ourselves but will collaborate with partners to accomplish it. While this is a complex task, we believe it can bring great value to users.

As the service is launched, we will gradually learn more about the practical operational details, such as which aspects present challenges, what the actual needs of users are, and what the typical transaction amounts are. I expect the average transaction amount to be in the low hundreds of dollars.

Listing of Cryptocurrencies

David:

Back to the topic of crypto assets. Does Robinhood plan to list more cryptocurrencies? The variety of cryptocurrencies currently offered in the Robinhood app is relatively limited; will you expand the options in this area in the future?

Vlad:

Yes, since the election, we have launched many new assets. I believe we currently cover most of the high-volume assets that our customers are interested in. For example, Trump Coin was widely welcomed after its launch on inauguration day. We have been continuously adding new assets, but now dozens or even hundreds of new assets are created every week, which makes us realize the need to rethink how to handle the listing process for these assets more efficiently.

Next, you will see more developments with the Robinhood Wallet. The Robinhood Wallet is an on-chain product based on decentralized finance (DeFi), and currently, its functionality is not tightly integrated with the main Robinhood app. However, I believe that over time, these two will gradually merge. We plan to add some on-chain features to the main app while making the wallet app more convenient for seamless conversion between fiat and cryptocurrencies.

I believe that in the future, Robinhood's services and the entire industry will move towards tighter integration. In this trend, the barriers to asset listing will be lowered, and the processes will become more automated. If we find that a certain asset has a high trading volume, we will optimize the backend to make the listing more efficient and streamlined.

Our goal is to provide customers with more choices while ensuring that users are not confused by the emergence of hundreds of new tokens each week. As the variety of assets in the market increases, it becomes increasingly difficult to distinguish between high-quality and low-quality tokens. We need to address this issue to avoid promoting unreliable tokens and to prevent customers from easily investing without understanding.

Why Separate Multiple Applications?

David:

So you have the Robinhood Wallet, the core Robinhood app, and the Robinhood Credit Card, which I believe is also in line with the direction of Robinhood Banking. Is the separation of these applications primarily due to regulatory and compliance considerations? Are there plans to integrate all functionalities into a single product similar to a financial super app in the future?

Vlad:

We initially did consider integrating all functionalities into one app, but later realized that the challenges of doing so are significant. An app that serves both active traders and banking users needs to have a homepage user experience that precisely meets different needs. However, the needs of trading users and banking customers are often completely different. For example, traders are more focused on asset prices and buying/selling operations, while banking users need convenient payment and account management features. Therefore, most users' habits are to keep trading interfaces and banking interfaces separate. While it is theoretically possible to unify them, there are currently no successful cases to reference. Therefore, my attitude is open, and I am willing to try different approaches.

The concept of a super app is indeed very appealing; we might be able to develop a fully functional app, but I do not believe that all functionalities must be concentrated in one app. More importantly, it is about achieving unified customer identity verification (KYC) and facilitating the flow of funds between accounts. Besides that, we want to create the optimal interface based on users' actual needs. In the future, we may add more features to the main Robinhood app while also encouraging teams to develop independent applications. Ultimately, we may launch more than three applications. Similar to Uber and Uber Eats, we may reorganize or split these applications in the future based on actual operational experience to better meet user needs.

How "Bankless" is Robinhood?

David:

Vlad, as we wrap up this interview, I want to talk about Robinhood's relationship with cryptocurrencies and fintech. As you know, this podcast is called "Bankless," and we advocate for decentralization and self-custody of finances and crypto assets. Some parts of Robinhood are very "bank-like," such as the banking-related products you are launching. I believe cryptocurrencies, especially DeFi, have certain advantages in competing with traditional finance, as traditional savings accounts have annual interest rates of only 0.25%, like those at Wells Fargo, which are terrible products, and innovation comes from outdated traditional finance.

That said, I also appreciate the genuine competitiveness that Robinhood brings to traditional finance. At the same time, I notice that while Robinhood is not fully decentralized, more and more crypto features are being integrated into your products. So my question is: How decentralized is Robinhood? What is the future direction? Where do you think the balance point will be between decentralization and traditional models for Robinhood?

Vlad:

In fact, Robinhood is "bankless"; we do not have a banking charter. Many people ask us if we will apply for a banking charter and what that would mean. Traditional financial companies typically need a banking charter to access services like the federal payment system (Fed Wire), Zelle, and to engage in lending activities. However, our current model is to act as a neutral platform, collaborating with banks to provide necessary services. For example, we partner with Coastal Community Bank to provide credit and banking services, along with other partners involved in our cash sweep program.

In fact, many large crypto and decentralized finance (DeFi) protocols still require bank support on the backend. If users want to transfer fiat currency onto the chain, banks are an indispensable part of that process. I believe that as regulatory frameworks become clearer, we may see the emergence of "crypto banks." These banks may obtain some form of licensing, and the regulatory requirements may be more lenient than those for national bank charters from the OCC, but they will still need to comply with financial management and reserve regulations. After all, without rules, users may be harmed. For example, the Anchor Protocol of Terra Luna and Celsius, which appeared to be bank-like protocols, ultimately faced serious issues due to a lack of key regulatory mechanisms.

I have always supported fair competition in the market. I believe that the relationship between traditional banks and the crypto space may become more integrated rather than differentiated in the future. Some advantages of the traditional banking system can be borrowed into the crypto space, while many innovations in crypto technology are also suitable for integration into the banking system. We are at a critical moment where we can combine the two to provide users with more practical solutions. This is an exciting opportunity for both the crypto industry and users. If Robinhood can play a role in promoting this integration, I think it would be a very meaningful thing.

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