Unnamed sources suggest popular free crypto and stock trading application (app), Robinhood, is negotiating with US regulators about prospects for it becoming a bank, complete with traditional services such as savings accounts. It’s still early going, and very preliminary, but such an arrangement could well be the future of banking.
Also read: Bitcoin More Influential in US Politics Than Ever
Robinhood Looking to Provide Banking Services
By all accounts it has been a skyrocketing year for the smartphone trading app Robinhood Markets, Inc. out of Menlo Park, California. Success appears to have emboldened the scrappy firm, according to Bloomberg.
In late January, the company announced it would add bitcoin core (BTC) and ether to their platform, which caused 1 million people to sign up. Only a month after its formal February crypto rollout, by March it boasted a cool $5.6 billion valuation after three years of operation. And mid-May saw its services grow from one or two US states to ten.
Unnamed sources are pointing to the popular free crypto trading app as querying regulators about the possibility of it becoming a full-fledged bank. The company has proven its ability to grow a consumer base, reaching more than 4 million in the United States. That it might be able to offer savings accounts could signal a broader change in the legacy industry, one gearing itself toward the next, more tech savvy, generation.
Banking laws in the US effectively prevent Robinhood from going forward on its own in this regard. Bloomberg insists the company is “in early discussions with regulators to begin offering banking-like products through different licenses or partnerships.” Discussions are between it and “the Office of the Comptroller of the Currency, which charters and regulates all national banks and federal savings associations.”
Everyone associated with the matter was careful to stress how nothing concrete has been decided. Still, should things progress, most expect the company would partner up with an existing institution, rather than go it alone. Whatever the case, other startups have moved along similar lines with an eye toward poaching dissatisfied traditional banking customers tired of unfavorable interest rates, a friction filled online experience, and the want to have most/all of their financial dealings in one convenient application.
Is banking a good move for Robinhood? Let us know in the comments.
Images via the Pixabay, Robinhood.
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