Robinhood, an app that allows its over 4 million US users to trade stocks and cryptocurrencies without paying fees, is reportedly in talks with regulators to offer banking services like savings accounts, which will effectively help it become an all-in-one financial portal.
According to Bloomberg, the California-based firm’s talks with regulators at the Office of the Controller of the Currency (OCC) are being “constructive,” but are still in their early stages and could fall apart. Robinhood’s goal is to offer banking-like products “through different licenses or partnerships.”
Bloomberg’s report cites anonymous sources who are reportedly familiar with the matter, but chose to remain unidentified as the talks are confidential. Often, startups offer banking services through partnerships or merges with existing institutions with said licenses, as getting a green light from regulators on banking services could take several months or even years.
Notably, a banking license allows startups to deepen relationships with consumers and encourage people to choose them over large financial institutions by offering a better user experience, the ability to access various products and features in one place, and higher interest rates.
Robinhood started offering commission-free crypto trading through its Robinhood Crypto platform earlier this year, and has been expanding throughout the US. Recently, the company raised $363 million at a $5.6 billion valuation, in a funding round that’s set to help Robinhood Crypto reach the whole country.
As covered, the company’s CEO is seemingly bullish on cryptocurrencies as the company’s CEO, Baiju Bhatt, has recently stated that sovereign nations will adopt cryptocurrencies. He said:
I think sovereign nations are going to have cryptocurrencies as their default currencies at some point. I think this is largely inevitable, whether that happens next year or in 15 years I don’t know but I’m almost 100% convinced that’s going to happen.
Robinhood, however, isn’t the only company in the crypto space looking to acquire a banking license. Goldman Sachs-backed payments firm Circle, which earlier this year acquired cryptocurrency exchange Poloniex for $400 million, revealed it was pursuing a license with the OCC earlier this month.
Similarly the largest exchange in the US, Coinbase, is reportedly in talks with the regulator regarding its business model and the possibility of obtaining a banking license.