Commission-Free Trading App Robinhood in Talks With Regulators to Offer Banking Services

Francisco Memoria
  • Crypto and stocks trading app Robinhood is reportedly in talks with regulators to acquire a banking license.
  • Its goal is to offer its over 4 million US users services like savings accounts, presumably to take on larger financial institutions.

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.

Baiju Bhatt

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.

Tron's 'Four Major Developments' Including zk-SNARKs to Launch By Q2 2019

The developers of Tron (TRX), one of the largest platforms for building and deploying decentralized applications (dApps), are reportedly planning to release a set of upgrades and new tools to enhance the blockchain network’s functionality.

As noted by Misha Lederman, the co-founder of IAmDecentralized.org, a platform that is being created to support the ongoing development of decentralized technologies, the Tron blockchain ecosystem is set to deliver the following “major development”:

  • “BitTorrent Speed, $BTT,”
  • “Institutional-friendly multi-signature & account management,”
  • “USDT-TRON stablecoin launch on #TRX blockchain,”
  • “Implementing privacy option for transactions.”

Lederman, who’s known for being one of the most vocal supporters of Tron (especially on Twitter), revealed that Tron’s major developments (listed above) will be launched in the “coming weeks and months” of Q2 2019.

"BitTorrent Speed" And Multi-Sig Wallets Launched

After acquiring BitTorrent last year for $140 million, Tron’s userbase may have increased significantly as the peer-to-peer (P2P) file sharing solution reportedly has more than 100 million users. In order to improve the existing functionality of BitTorrent and its native BTT token, Tron’s developers are launching “BitTorrent Speed,” an application that will compensate network participants in BTT in exchange for providing bandwidth and seeding.

On February 24th, Tron founder Justin Sun had announced (via Twitter) that the following set of updates would be integrated on the dApp development platform (Tron’s version 3.5):

  • “hard fork upgrade” (already activated on February 28th),
  • “Multi-signature [wallets] and [new] account management features for institutional investors,"
  • “Dynamic energy adjustment to real-time network performance,”
  • “50% up performance & res usage,”
  • ”Better [virtual machine] VM safety, events server for dApps.”

As explained by Sun in a video he posted from his official Twitter account (on March 7th, 2019), Tron’s partnership with Tether Ltd., the developer of the world’s first and largest stablecoin (USDT) involves the development of a Tron-based USDT token that offers “TRX holders a new way of value storage, provides dApp users a new way to play [or access] dApps, and increases legitimacy with institutional investors.”

Adding zk-SNARKS To Tron's Ecosystem

Moreover, the partnership between Tether Ltd and the Tron Foundation will involve the creation of a new TRC-20 compliant USDT stablecoin that will provide interoperability with applications and protocols across Tron’s ecosystem.

Notably, Tron’s development team is planning to integrate zCash’s zk-SNARKS privacy technology - which is intended to provide Tron’s users the option to conduct private transactions.

During the “Bad Crypto” podcast, Sun revealed why he is planning to incorporate the zk-SNARKS on the Tron network. He remarked:

People don’t want their privacy stored by Facebook or Google because those people can more easily manipulate the data so they can push ads to you. You don’t want to share those data with them. That’s why I think the decentralized way becomes a good way to do that and limit how much data you are required to share.