Robinhood CEO: "Gen Z Is the Most Retirement-Savvy Generation Ever" | Vlad Tenev

Vlad:
[0:00] Gen Z are the most retirement savvy and long-term investment savvy generation we've ever had. Wait, what?

Vlad:
[0:07] Yeah, yeah. They're opening retirement accounts at earlier ages than any generation in the past. I think the average age of Gen Z opening a retirement account at that point was 19. So it might have gone up since then, but it's probably like early 20s. When you compare it to millennials, they're at 25.

David:
[0:30] Bankless Nation, we are once again joined by Vlad Tenev, the founder and CEO of Robinhood. Vlad, welcome back to Bankless.

Vlad:
[0:36] Always a pleasure to be with you guys. Thank you.

David:
[0:39] Vlad, we've got you in the ring for 60 minutes. So we've prepped about 60 minutes of lightning round questions for you. Are you ready?

Vlad:
[0:44] Oh gosh, I'm in the ring. Okay, I'm ready.

David:
[0:47] 60 minutes are going to come at you fast. We're going to start with the great wealth transfer. So there's a massive intergenerational shift of assets expected over the coming decades as baby boomers, silent generation, pass on their wealth to Gen X, millennials, Gen Z, roughly 70 to 90 trillion in the US alone, transferring over the next 20-ish years. Largest wealth transfer in history. How much of this guides Robinhood's strategy? How often are you thinking about this 70 to $90 trillion opportunity? Or is there something else that's kind of guiding you at Robinhood?

Vlad:
[1:17] We think about it quite a bit. And I think if you look, a lot of companies have started talking about this great wealth transfer. And of course, it was sort of like in niche circles discussed maybe like by economists and stuff like that. But I think you can trace back the origins of it being a big fintech topic to last year when we launched Robinhood Banking at our gold event. And the way we think about Robinhood at the highest possible level is we want to serve all customers, whether they're business or institutional, whether they're U.S. or international. And Robinhood should be the place where all of your money and assets are served best. And it should be as easy as possible to deposit into Robinhood and as easy as possible to withdraw. But we also treat every withdrawal as an opportunity or a defect with the system that we can fix. And, you know, we think that we have a huge opportunity as these older generations

Vlad:
[2:29] Are having inheritance events and giving money to younger to not just serve the older generations, but to have all the products and features so that you're at a disadvantage keeping your money and assets elsewhere. That's really been informing our strategy of what types of products and features we wanted to add to the ecosystem. Obviously, credit and banking gives us access to a large chunk of assets out there that are being stored in checking and savings accounts, and also the spending flows, which comprise so much of what customers do with their money. And then if you look at this year, custodial accounts, trust accounts, expanding the assets that we offer on the platform, that helps us go after both sort of like the youngest customers at the point of receiving assets, but also wealthier established customers, which is where the assets currently sit. So it's not like we're just sitting there waiting for people to inherit money. We're trying to serve the parents and grandparents and make it clear they're at a disadvantage using any other financial platform today. And I think that positions us well when we get to kind of the hump of the wealth

Vlad:
[3:47] transfer, which we anticipate will happen in about eight to 10 years.

Ryan:
[3:53] Let's talk about eight to 10 years from now. Finance has changed a lot in the past 15 or so years since you guys have been around. How is finance going to look in 2040? In what ways will it be the same versus different? Because I guess I did just say finance has changed a lot and it has in many ways. But in other ways, it's very similar to how it actually was. What does finance 2040 look like? Are we doing 24 by 7, 365 markets? Is like AI involved? I mean, what's the same and what's different then?

Vlad:
[4:26] Yeah, I think that we'll definitely have 24, 7, 365 markets. That's something that We started like pushing towards in 2022 on the equity side with 24-hour market. And now you see the industry catching up. A lot of the exchanges are making plans to go 24-7 and open on weekends. And I think the technology is certainly there and there's some work to be done, but I think it's going to happen much before then. Tokenization, which is another thing that we were pushing ahead with. Last year, we did an event in France where we launched tokenized versions of a large number of U.S. Stocks. I think we're at well into the thousands now. We've been expanding that offering and also the OpenAI and SpaceX stock token giveaways. And so that's still early and we're still in phase one of our journey. But I think by the end of this year, we should be at a point where the stock tokens actually have advantages over buying traditional stocks in a brokerage account. And I think that's very exciting. And you can imagine if you can solve problems. 24-7 liquid access with private equity, that to me is the hardest version of the problem. So that allows you to have 24-7, 365 markets for pretty much everything.

David:
[5:56] So talking about the tokenized stocks product around, like you said, over a thousand tokenized stocks live in Europe. And also you've got your own layer two that came in testnet just a number of weeks ago. But American users can't touch the tokenized stocks product yet. With the SEC's posture shifting. How close are you to bringing tokenized stocks into the US? And do you actually think like the 24-7 on-chain trading venue, is that you guys are going after the New York Stock Exchange model or is it just something different that you guys are penetrating into the crypto world? How do you just kind of position this like tech stack that you're building?

Vlad:
[6:30] There's two parts of the tech stack, right? There's going to be the CeFi components, which is the tradability of the stock tokens on Bitstamp and other centralized exchanges. And obviously, we're gearing up for that. And also the DeFi aspects, where if you want to go on your non-custodial wallet and swap or engage with DeFi protocols, we're working to enable the stock tokens to be on DeFi, on Robinhood chain and eventually other chains as well. So we're doing both.

Vlad:
[7:05] And yeah, we don't really think about it as, you know, we're going after any particular legacy provider. I think this is just, this is a new thing. And probably the closest analog is, you know, you can do all these things in the crypto ecosystem with like collateralized lending and borrowing, swapping. But you're doing them with tokens that typically don't have underlying utility. So what happens when you actually have them tied to real world assets? I think it'll feel very similar, but it'll also hopefully feel better because it's not just meme coins, but you're actually using the power of the technology for trading and swapping assets with real fundamental utility. In terms of when it's available, I think the other thing after, the bigger question is like, how can we ensure what the product that people want is, right? And what's the delta?

Vlad:
[8:10] And the thing about the US is we already have robust market structure. We have, you know, existing ability to trade stocks. It's not 24-7 yet, but it's like 24-5. And I think we'll get to the end state in the U.S., which is you being able to trade 24-7, 365 at the lowest possible fees, and it'll be a mass market product. In fact, I think we're probably like 90% there. And so it's a little bit less clear now. What the value add is and whether consumers will actually even understand the difference between, you know, tokenized stocks and others. But I still think, you know, EU and outside the U.S. will happen first. And then there may be certain situations in which it's better.

Vlad:
[9:08] And you'll see that ported to the U.S. at some point later.

Ryan:
[9:13] You mentioned decentralized finance already, Vlad, From the perspective of self-custodial wallets and tokenization happening there, there are companies like Coinbase and Kraken exchanges that are growing out what we've called on bank lists their DeFi mullet, which is kind of finance in the front. It looks nice and clean, but then there's the DeFi party in the back. So they're doing things with lending and borrowing protocols on chain. So giving access to consumers and their CeFi interface or their DeFi interface to protocols like Morpho. Even BlackRock has been worming up to decentralized finance. They, of course, have the Biddle Fund in February. They actually deepened their push into DeFi by listing Biddle on Uniswap. What's your strategy at Robinhood for decentralized finance? Because there's certainly an element where it's kind of the Wild West. It's permissionless. It's open. There's a lot of innovation. There's some scary things maybe that goes on. Yet on the other hand, these experiments are incredible, tremendous. It does seem like that's the differentiator between what crypto can bring to finance versus what they're doing traditionally. What's your strategy for this?

Vlad:
[10:22] Yeah, the strategy is really full stack. I mean, in order for the ecosystem to work, we need to bring in a lot of customers. And so through Robinhood app and increasingly Robinhood wallet, we're growing distribution and we have customers that are...

Vlad:
[10:41] Coming in that have interest in these services. Then we also have the opposite end, which is the infrastructure, both CeFi and DeFi. And for DeFi, we've got Robinhood Chain, which you guys mentioned we launched the testnet of. And I mean, the testnet has been going really well. Like the amount of engagement from developers and applications exceeded our expectations. And, you know, at the beginning, I thought, OK, Robinhood chain, worst case scenario is this is like a chain for us to tokenize our own products and offer them to our customers. Right. And even in that scenario, I think it becomes one of the biggest chains. But what we've seen is the developer activity and interest has exceeded our expectations. So now I'm getting increasingly confident that actually people are going to want to integrate with the chain. Developers are going to want to build and offer products very, very quickly on it. And so then the problem becomes one of curation, right? We'll have all these products on the chain. We have all these customers. How can we make sure that the best of those products make its way to our CeFi and large distribution products so that, you know, our customers can sort of like find their way around the sea of just like

Vlad:
[12:05] Thousands of products that on the surface seem very similar,

Vlad:
[12:09] but might have different risk profiles, different dynamics underneath.

Ryan:
[12:14] Let's talk about prediction markets. So that's something that has been growing like crazy. I don't know if you've been surprised at the growth. We've been longtime bullish prediction markets, but even we have been very surprised at the growth in the last couple of years. Now, proponents like probably us on Bankless say that these are information markets, that these are good for society. They're truth machines for things like news and events, stake-weighted voting around this. The CFTC is even supportive of prediction markets. We just had Mike Selig on the podcast and he talked about these being event markets under the full jurisdiction of the CFTC. But there's a crowd that's kind of anti-prediction markets and some clamoring about this. Some people say it's just another form of gambling. It's not necessarily good for society. It creates, you know, addictions. It incents maybe insider trading. So there's some criticism of prediction markets as well. What's your take? Maybe the highest level on prediction markets. Are these things good for society? Are they bad for society? Is there something that the critics are missing here with this story?

Vlad:
[13:20] I think they're good for society. And I think what a lot of people don't realize about prediction markets is sure there's trading and volume that's happening on them. The trading and volume is much smaller than it is in equities markets or options markets. But there's also a much broader use case of these being used as truth machines, as being alternatives to traditional news media. So more and more Americans are increasingly turning to prediction markets to have clarity on what's true or what's likely to happen. And it used to be that they would go to news media for this. As the business model of news media has gone further and further away from giving you the truth and giving you the information or what's likely to happen as quickly as possible and more toward how can we delay you getting the information so that you're just like, entertained and can watch more ads, that's opened up a hole for the original purpose, which is, let's say I want to know something and get like the actual information. What's the mechanism for that? And I think prediction markets have filled in that gap quite well. And you'll see over time that they just like proliferate everywhere.

David:
[14:45] Is there a wing, a vertical at Robinhood, part of the prediction market stack that is leaning towards a little bit more media and content then? There's like, you know, every company, like every new tech company kind of wants to become a social media company, you know, like Sam Altman and OpenAI wants to build out a social media arm. It does seem fitting that if Robinhood is going to be a front page of sorts of prediction markets, and I think I remember seeing something about like social, a social element of Robinhood where like traders can, you know, talk about their P&Ls and their, their positions and their portfolio. And that's, you know, we have things like, what's that Twitter for stocks, stock twits or whatever. There has been this complex of things before, like content and finance and news and people who want to talk about such a thing. It would make sense that if Robinhood is going to be the place where a lot of prediction markets get distributed to users, that there's like a growing media content arm out of Robinhood. Do you think about this explicitly or is it more of a byproduct?

David:
[15:49] How do you think about this?

Vlad:
[15:50] Yeah, absolutely. So the product you mentioned, Robinhood Social, we announced that at Hood Summit, and that's going to be rolling out to customers in the coming weeks. It's already an internal testing. And one of the, I think, big differentiators is that we have so many assets available and prediction markets in particular are going to be a first class citizen. So you'll be able to see the prediction markets trades and kind of the comments around those from people in the ecosystem. So, I'm a huge believer in user-generated content. You're just not going to be able to curate everything and be able to catch all the breaking news and all of the new things that happen with prediction markets. But if you have millions of customers that are all participating, trading, or just engaging otherwise in the markets, then I think you'll surface a lot of great things, even before, much before you can curate. Now, we think there is room for curated first party news as well. And that's where Sherwood Media, which is our media arm, comes in. And, you know, they're churning out content, high quality content on a daily basis. And more and more of that has prediction markets integrated.

Ryan:
[17:09] What's the strategy for prediction markets for you guys? I know there's a partnership in place, obviously, with Kalshi. Is it build your own? Is it double down on that partnership?

Ryan:
[17:19] Do you want to have a variety of options here?

Vlad:
[17:20] We partner with Kalshi and also another exchange, ForecastX. And in a sense, if you look at all of our other products that we offer for customers, most of the time we don't have the absolute full stack, right? For equities, we're not the exchange, right? We, some of our orders end up executed on exchanges, but we ourselves aren't an exchange or a market maker. We work with lots of other counterparties to do that, but we do our own brokering and clearing. So if you had, if you sort of think of it as three entities helping make your stock trade possible, we have two of them, the introducing broker, the clearing broker, but not the, not, not the execution venue. for crypto

Vlad:
[18:13] We do all three. So we execute, we custody, we broker. And, you know, with Bitstamp, we now have an exchange venue. For prediction markets, I think it'll evolve similarly to how crypto has evolved. So we don't send 100% of our orders to Bitstamp. We send a chunk. Bitstamp competes with all of the other venues for who can serve customers the best. And they have certain advantages being part of Robinhood Engineering and we have a great engineering team and we've just sort of cut our teeth on high-performance products. But they compete as an exchange business on a level playing field with all other market makers and exchanges. And that's also the idea for prediction markets. Of course, we expect that when we get our own venue up and running, they'll do well, But at the end of the day, what we prioritize is making sure customers have the best product experience. The word entertainment

David:
[19:16] Is becoming used more and more frequently in a financial context. For some of the older generations, like boomers, Gen X, I'm sure this is kind of absurd to them. When boomers go and do finance, they go to a bank. If they want entertainment, they go to the movies. These things stay separated. As time has gone on, as generations have grown up, they have been more commingled. They're starting to all kind of become the same thing. This is almost how Gen Z is like learning about finance, about trading, investing, finance in the first place. It's like in this kind of financial entertainment context. Prediction markets definitely is a part of this. On the crypto side, we have meme coins. Why do you think entertainment is growing to be such an important part of like the modern day finance for younger generations? Also, is this something to encourage as a platform? What do you think your responsibility is here to responsibly manage the fact that entertainment finance is a growing sector that is in demand, but also avoid any of the like toxic adverse consequences that comes with like overdoing it?

Vlad:
[20:19] Yeah, I have a hot take on this. I actually don't believe in the thesis that entertainment is driving a chunk of like a huge chunk of financial activity. I think that what's actually happening is nobody wants to talk about the non-entertaining aspects of it. And, you know, tweets about those things don't go viral. Right. No, it's like not an interesting take to talk about, you know, how fast growing Robinhood's retirement business is or, you know, what percentage of our assets are in passive vehicles like ETFs or, you know, how much our customers are diversifying and investing safely for the long term. So what you end up happening is that stuff is going on. Nobody's writing articles about it. It's not going viral on Twitter. And so you have the perception that, oh my God, everything is turning into this like degen entertainment space. But but what's happening is our attention is just being being hijacked by by those types of things. And so we just assume I think it's a big logical fallacy that humans have. They assume that because someone's talking about something a lot, then that's like the most important thing.

Vlad:
[21:39] But yeah, I don't think it is. And when we look at actually our activities and what's happening on the platform, 40% of assets are now in passive vehicles, which include retirement, ETFs, cash. And I think that's going to be a growing number over time. And if you look at even our most active traders, like the folks that are trading options and futures, those are the people that are most likely to also use our passive products like Robinhood Strategies and Retirement. And what their relationship looks like is multiple accounts. They bucket their activities together. Into different accounts, use them for different purposes. And even within an individual, some of their activity might be speculative trading or more systematic trading, but they typically have a larger portfolio that's, you know, more passive.

Ryan:
[22:31] At some level, this is really good to hear. You got kind of a sort of a counter narrative here, because if you listen to basically what David was saying, I mean, entertainment, finance, it almost seems like the media is saying that younger generations are engaging in speculative activity. They're just gambling because they don't have a hope in this economy. So they're being irresponsible with respect to their financials. Financial nihilism. Financial nihilism. But you're saying you're actually not seeing that. I mean, to the extent that you're not seeing that, that's good to hear because there is this popular narrative out there that millennials and even younger millennials and Gen Z are being irresponsible with their finances and they're really not looking for a long-term goals. But you're saying that's not actually characteristic in the demographic. You're seeing responsible behavior in these generations, in these younger age groups. Is that part of the story?

Vlad:
[23:26] Absolutely. Yeah. Actually, Gen Z are the most retirement savvy and long-term investment savvy generation we've ever had. Wait, what? Yeah, yeah. They're opening retirement accounts at earlier ages than any generation in the past. I checked this statistic a couple of months ago, and you guys can look it up and keep me honest, but I think the average age of Gen Z opening a retirement account at that point was 19. So it might have gone up since then, but it's probably like early 20s. When you compare it to millennia, they're at 25. That's wild. People are generally, I think Gen Z is like very savvy and very attuned to long-term investing. And I think if you look at the traders as well, a lot of people just lump active trading into the gambling bucket. But in reality, there's like lots of different types of active trading. And there are folks that are incredibly systematic and are out there looking for mispricings, you know. And they're on the Discord chats and you can see them on X, but they actually have legitimate strategies for all types of products, futures, but also things like sports prediction markets. And so I would just distinguish that activity, which is strategic and systematic, from trading.

Vlad:
[24:50] What a lot of people call gambling, which is basically like, you know, I'm going to put five bucks on, you know, my local team because I have an emotional attachment to it. I think that's an important distinction.

Ryan:
[25:01] What do you think accounts for this? So you're making the argument that Gen Zs are actually acting, you know, very financially responsible and they're informed investors. They're, you know, opening retirement accounts and kind of record numbers. Are they just like better informed? Is there something that maybe Robinhood is providing with respect to access? I'll tell you kind of my story. It's just like setting up a retirement account used to be really hard and clunky and difficult to do. And part of maybe the theory as to why they're doing it in record numbers is because now it's just easier. And you don't have to go meet with a financial advisor and fill out all of these paper forms. You just click a few buttons and bam, you've got a retirement account. So it seems really obvious. Is access part of the story or why do you think Gen Z is opening retirement accounts in large numbers?

Vlad:
[25:52] Yeah, I think access is definitely part of the story. I mean, we've seen huge adoption of our retirement product. The economics and the incentives being pointed toward retirement help quite a bit as well. If you look at what products we actually incentivize, I mean, for a gold member, retirement gets you a 3% contribution match. Not to make this sound like an advertisement because that's not the intent but that's actually a lot of people are like oh well Robin Hood's incentivizing all these speculative products you look at what we actually incentivize it's retirement

Vlad:
[26:24] And I think that resonates because if you look at the tax advantages of a retirement account and then you look at, you know, we're basically giving you a match and the increasing trend of more and more people becoming independent contractors, not having traditional full-time employment, but, you know, doing gig work or doing contracting. I think it's a good product to come fill in that gap because, you know, A young person in this country has a little bit less ability to rely on traditional 401ks or employer-sponsored pension plans. So there's a gap that right now, you know, I think we're coming to help fill. Yeah, and retirement assets have grown from zero a couple years ago to north of $25 billion as of our latest quarterly earnings. So it's been growing tremendously. Robinhood Strategies, which is our digital advice product, basically a set-in and forget-it system. You put money in and technology, as well as our team of investment professionals managing that on your behalf as a fiduciary, that's grown from zero to about one and a half billion in about a year since that was announced. So that's been growing very, very quickly as well. And then you guys probably saw Robinhood Ventures.

Vlad:
[27:44] It's it's another it's intended to be a long-term vehicle right you're not trading these individual names but instead we're we're creating a portfolio of privates yeah i i think that i think that the information that you have out there on the internet there's a lot of really good personal finance content not just trading content as well as the tools that we offer people have really moved the needle here vlad

David:
[28:11] You'll maybe you'll know if you listen to the podcast listeners of the podcast will know that I'm the risk taker between me and Ryan. And I will say, as a gold member of Robinhood, I have maxed out my retirement account incentives. I'm proud of you.

Ryan:
[28:24] Man.

David:
[28:24] The incentives have worked on me. We're all proud of you.

Vlad:
[28:26] That's great. Ryan, do you use Robinhood retirement as well or is your IRA elsewhere?

Ryan:
[28:31] Right now my IRA is elsewhere and it's a product of it being stuck in kind of a previous employer basically and it's just hard to kind of get out or I haven't done it yet.

Vlad:
[28:40] Well, I will tell you the rollover process, that's something we've been working very, very, very much on. So, yeah, you should take a look.

Ryan:
[28:50] Yeah, there is something attractive about getting everything in the same place if that can be done. And maybe that's a topic we'll turn to in a little bit, the idea of a super app. But, David, I think you had something you wanted to ask.

David:
[29:03] Well, we can talk about accounts for even people younger than 19. There's the new topic of Trump accounts, which got put into the big, beautiful bill, which passed. And so we are getting Trump accounts. For those who aren't familiar, Trump accounts are $1,000 of a government. It comes from the Treasury, so paid for by taxpayers. Investment accounts for every child born between 2025 and 2028. It's locked until they are 18, and it's just passively invested in low-cost U.S. stock indexes. Vlad, you have called this amazing. Why are you such a fan of Trump accounts?

Vlad:
[29:38] I think a lot of the things that we're talking about for encouraging participation in long-term investing are opt-in by individuals, right? You have to create a Robinhood account. You have to actually take the initiative. Someone has to walk you through it.

Vlad:
[29:54] The beauty of Trump accounts is they're created for every child at birth. And, you know, the Treasury puts in $1,000 and that's supplemented by lots and lots of people, an increasing number of philanthropists and great business leaders like Michael Dell and Susan Dell, for example, who are putting additional money behind these accounts. So, and then, you know, if you think about what happens, you have an account with $1,000 and possibly more, depending on how many other philanthropists end up contributing. Your parents put money in, your grandparents put money in. We make that process really, really easy. Then by the time you're 18, you know, you could have hundreds of thousands in that account. By the time you're 30, it could grow to a million dollars. And I think that's awesome because not only does that teach kids the value of long-term investing and what it looks like to invest, It's also, I think, one of the few mechanisms where the present is actually giving money to the future, right? Future generations. All of the things that we're doing, you know, we're racking up more and more debt. It's really, these are ways we're borrowing money from future generations. And I think this is the first thing that I can think of where we're actually giving money back. And that's quite amazing.

Ryan:
[31:18] It's incredible, too, how young this generation actually is. It's made me feel like an old man just talking about it because this is not Gen Z, obviously. it's not Gen Alpha, it's Gen Beta. Whatever that generation is, it's barely labeled at this point.

Vlad:
[31:32] Well, Gen Alpha will benefit because this will be extended to all children under 10. They might not all get the $1,000 from Treasury, but I think philanthropy will come in and do quite a chunk.

Ryan:
[31:47] I didn't realize that. Let's say you are selected as a custodian. I don't know how that works or if custodians are going to be selected. I know they were, they are, I think they are. But Vlad, let's say Robinhood is selected as one of these custodians. You've been very good historically with kind of like providing financial tools to younger generations, but this is like the youngest generation yet. These are effectively kids. How do you start a financial relationship with young investors at that level? And like, if you were selected as a custodian, how would Robinhood handle that?

Vlad:
[32:23] Yeah, I mean, I think the first thing you remember is, A newborn is not going to be opening up, you know, their their smartphone, at least, you know, hopefully not for the years. I know that the trends maybe are going in the opposite direction.

Ryan:
[32:39] They're not going to be active, actively trading is what you're telling us, huh?

Vlad:
[32:42] I think that these accounts will be managed by parents, at least at start. And then we'll have to figure out, OK, when when the child turns a certain age, is there an experience, financial education? Can we can we teach them about stuff? You know, obviously we'll want them to show we'll want them to see their portfolio growing and learn about it, but they're not going to be able to trade it. So, yeah, I think the child investing experience is going to be heavily education focused and financial literacy focused. And, yeah, I think it's a it's exciting new product domain.

Vlad:
[33:19] So we'll have to see how it evolves.

David:
[33:22] Let's talk about super apps. So ex-Elon Musk just started teasing ex-money. Coinbase just recently introduced.

Vlad:
[33:29] Stocks on their

David:
[33:30] Platform. It seems to be a race that there's just a race to build the financial super app. The race is on. My question is, is it really possible to build a finance app that fits the need of every demographic? Because there's so many different behaviors that are pulling finance in different directions. Some people I've just heard from conversations around just don't like it when they find prediction market opportunities right next to their retirement accounts. They're like, don't put these in the same box is like commentary that I've heard. So yeah, the question to you is like, is it really, do we actually know that the financial super app idea is valid or is it actually just something that like, it's a myth that we've created that people are trying to go for?

Vlad:
[34:14] I think it's a good question. I mean, I take financial super app, the term to be quite liberal, like, Even if you look at Robinhood, not all of our functionality and features are in one singleton app. We have Robinhood Banking, which has your checking and savings and is the home of your credit card. We have Robinhood Main App, which is more investing and trading focused. And then we also have non-custodial wallet. And I think what you'll see over time is we're going to try to figure out how to insert all of these things into Robinhood main app and Robinhood main app will have to be much more heavily personalized. I think it's it's it's reasonably personalized, but nothing like, say, a social media app where the home feed is like bespoke for every person. So you'll see it evolve to much more personalization so that we put the things in front of you that are most useful to you. And then I think we will continue to have targeted bespoke apps so that, you know, if you're a banking only customer and you want a really clean experience, we'll be able to offer a standalone app for that. And these apps will all be linked together with uniform KYC, seamless money movement. So you benefit everything being on from everything being on one platform while still keeping like the focused experiences.

Vlad:
[35:41] So in short, I think we'll do both. And I would take the term app more liberally, because we also don't want to just shoehorn ourselves into being an app, right? Because we have web properties, we have Robinhood legend. I think you'll also see in the coming months and years, more agentic capabilities so that if someone wants to engage with Robinhood through web, third-party tools or through agents or the best place for that. So, you know, we're offering a service that's going to be increasingly interface agnostic. And who knows, you know, maybe five years from now, the vast majority of transactions will be AI-mediated and we want to make sure we win in that world too.

David:
[36:26] When it comes to building the financial super app, it seems pretty clear, at least to me, that Robinhood is pretty far ahead of any of its competitors. But there's a missing feature that you guys don't have that seems very easy. And I actually know that you guys have it because I can transfer money from my Robinhood banking account to my brokerage account with a press of a button and it settles instantly. So I can move money between myself, but I can't send money. I can't do payments. I can't do normal payments to another person who has another Robinhood account.

David:
[36:59] When are you guys working on payments? When are like payments between users coming online for Robinhood?

Vlad:
[37:05] So that's something we've obviously experimented with and we've actually built out experiences for that. I don't know if you were a Robinhood cash card customer, but we had prior to Robinhood banking, a spending account with a debit card that was integrated into the brokerage product. And we've been phasing this out actually in favor of Robinhood banking. But this product launched in 2022 too. And frankly,

Vlad:
[37:35] It didn't really work. It wasn't very popular because we were trying to like offer paycheck to paycheck, lower income type spending product focused on, you know, debit primary customers, two day early pay, those types of things to a customer base that, you know, was predominantly credit primary and had a little bit more disposable income. So didn't value two day early pay in those things as much. So that's why we sort of like shifted focus to our credit products and eventually to Robinhood banking with the high APY on checking and savings. But with Robinhood spending, we had peer to peer and we were experimenting a little bit with the value props and testing. Well, if you lower the cost of the withdrawals, instant withdrawals, could that resonate? And where we felt our philosophy about this is, you know, there's a lot of products out there, Cash App, Venmo, and they can link to existing banks. And until we figure out a way to make our peer-to-peer offering significantly better, we're going to focus on other things. So we don't want to just put together more commodity features in front of customers in the hope that we'll cross-sell into them by virtue of them being in our ecosystem. We like to wait until we have a point of view on a product.

Vlad:
[38:59] And, you know, peer-to-peer payments are already pretty good. I don't think they're getting much better, but up until now, we felt much more opportunity in getting the rest of your banking stack on Robinhood.

David:
[39:14] Do you have a point of view on stablecoins as it relates to the banking product in that case? The Genius Bill passed. You already have an entire blockchain. It seems pretty easy to put stablecoins into the banking app. Do you guys have a position or an opinion on that?

Vlad:
[39:32] Yeah, so I think there's kind of two separate things when it comes to stablecoins. One is how is money stored in our ecosystem? Two is it's almost like how does money move into and out of it as a payment rail? And the former, I think the challenge right now is you're competing with FDIC insurance and yield. So in the conventional sort of like banking system, if you have a Robinhood account, that money is FDIC insured up to multiples of $250,000.

Vlad:
[40:12] And I think that's a compelling value proposition because a lot of people, when they think about their banking, the thing they care most about is that the money is safe. So they not only look for the insurance, but they read the fine print around everything. And when there was a banking crisis back in 2023, when SVB and First Republic went under, you saw that stablecoins broke the buck, some of them at least. And that caused a big problem. It caused a lot of deposit flight out of stablecoins. And it took many, many years to get back to the level of assets in the pre-SVB era. So what I'm telling you is the FDIC insurance and general protection of those assets at rest is really, really important for the U.S. consumer. And I think.

Vlad:
[41:04] We'll have to figure that out for consumers to tolerate non-trivial amounts being stored in stablecoins. Now, as a funding rail, meaning stablecoin in and out, we already support it. We don't see a lot of customers using it just yet because in the U.S., very few merchants accept stablecoins.

Vlad:
[41:25] And what you're competing with is things like the Robinhood gold card with 3% cash back. You know, I'm not getting 3% cash back as a consumer making a stable coin payments transaction. And so the folks using it are mostly testing out novelty use cases, right? Or it's for large business to business payments over the weekends where the traditional banking system doesn't work. And, you know, you can't just put it on your credit card. So I think you'll see them, and you've already started seeing them for large transactions. But for consumer use cases, you're probably not sending your buddy stablecoin to pay them back for splitting a pizza. And you're not paying for your Amazon order with stablecoins. So I think we've got more wood to chop to unlock these consumer use cases. But I will tell you, we've got USDG through our partnership with Paxos. Obviously, I think Robinhood Chain will be a great home for that, as will Robinhood Wallet. So we're going to continue to build and offer these services for institutions and eventually consumers as the ecosystem around them continues to mature.

Ryan:
[42:39] I mean, related to payments and stable coins and I guess banking, there was news last week and some people painted this as a historic first of Kraken, the exchange, getting what they call colloquially a skinny master account license. So this gives them the ability to submit their banking license anyway, gives them the ability to submit wire transfers directly to Fedwire. From your perspective, is that type of a license interesting, attractive for Robinhood? Do you already have that ability through correspondent banks or how does that work? Because this was painted as something historic and new. Do you believe this is useful and new?

Vlad:
[43:18] I don't think so. I mean, you can send wires into and out of Robin Hood today. I'm not exactly sure I mean, I haven't gone into the details of what exactly it allows, but it sounds to me like it's just maybe a way to do that more cheaply. I certainly wouldn't get a banking license or more cheaper access to wire services. I think there's a lot of, I mean, there's definitely pros to having a banking license. And we've gone down the road back in 2019 where we had a de novo OCC, National Bank Charter application that we pulled back. And the reason we withdrew that is when we looked at everything we wanted to offer, we saw that the partnership bank ecosystem has gotten so good and is sort of the APIs are maturing, the services are maturing. And now you can use partner banks and they'll actually compete for the business of startups and fintechs. And so we partner with some community banks for that.

Vlad:
[44:30] Coastal's our partner for the bank product and the credit card. And, you know, you look at these community banks, they're out there competing with the big boys, right? The Chases, the Wells Fargos, the national banks. And what's happened is, you know, the big GSIBs have massive scale. And so the community banks have found an opportunity in servicing technology companies. And I think it's a great relationship because they get new business and we get to sort of like do what we do best and not have to deal with, you know, the aspects of having a charter that we don't need to deal with. So for us, the partnership's been working great. Of course, I can never say never. And we always reassess these things. But, you know, so far, no intent of becoming a nationally chartered bank.

Ryan:
[45:22] It sounds like you guys have had some very positive relationships with banks. There is a source of friction, or at least it appears that way, between the banking industry and, let's say, new banking and the crypto industry. And some of that friction has culminated in the Clarity Act. So right now, it seems that the Clarity Act is being held up based on who gets stablecoin yield. And on the bank side, the banks are like, hey, you know, issuers and exchanges can't have an open loophole to give stablecoin yield back to their users. And many in the crypto industry are pushing back on that and holding the Clarity Bill up, you know, such that we make sure that stablecoin yield passes to consumers. Coinbase has been an advocate of that. What's your perspective on the Clarity Bill and this holdup around stablecoin yield?

Vlad:
[46:12] Yeah, it's strange to me. I wouldn't have expected it to go in this direction because on the surface... Stablecoin yield has nothing to do with the Clarity Act, right? It was supposed to be on crypto market structure and security status of coins and things like tokenization.

Ryan:
[46:31] We thought it was all resolved in the Genius Bill already.

Vlad:
[46:33] Yeah, I think what happened was the Genius Bill caught a lot of these stakeholders by surprise. And now they're in there trying to like, use this as a almost like negotiating leverage to get some of that stuff patched up. Yeah, I think that and, you know, I've met with a lot of congressional leaders, you know, members of the Senate who are working on this. And I think that the best outcome would be to sort of like put the stablecoin issue aside so we can start tackling DeFi. And what I The worry is that, you know, we could end up getting distracted by stablecoin and then we get stuck on like DeFi and some of these real meaty issues and there won't be enough time to get that resolved before the election this year when things start to get really messy. I think we've got to move quickly, get past the stablecoin issues so that we can actually talk about the Clarity Act itself.

Ryan:
[47:34] What does the Clarity Act do for Robinhood and for crypto and the whole, you know, idea of tokenized assets?

Vlad:
[47:41] Yeah. I mean, one thing is it just makes it clear what's a crypto security and a commodity. And a lot of calories are burned right now writing just like legal memos and getting very specific guidance on every specific coin that we list to ensure that it's not a security. And if there was just a paved path that we could follow, that unlocks a lot of other things. And then you have tokenization, which obviously would unlock... Traditional assets, non-crypto native assets on blockchains. There's some discussion about whether that even requires clarity, but the benefit of it being enshrined in an actual law is another administration can't just come in with a different SEC and completely flip their posture on the industry, which I think is a real risk. I mean, you've seen that happen a number of times already. That's why we've got to get some of this actually enshrined in legislation.

David:
[48:52] Maybe we're at the fork of two different possible timelines in the future,

David:
[48:56] one where clarity passes, one where clarity does not pass. How do you think that that impacts the whole Robinhood chain future? Like is the Robinhood chain team and the tokenized stocks team, I'm assuming they're just watching clarity with bated breath. And if it passes, then they get to hire more, they get more funding, you're investing more into the Robinhood chain ecosystem. If it doesn't pass, you're kind of, you know, not doing that, but just it doesn't move forward with as much gusto. Is that kind of how you view it?

Vlad:
[49:27] No, it's less about, you know, do we invest as much in the chain or not? The chain is a global product by design since it's permissionless. So it's more about how much of the things built on the chain can be offered in the U.S. Versus being international only. And you remember, you know, in the last administration under Gensler, we still invested quite a bit into crypto. But the view then was, well, it looks like the U.S. is going to be a challenging market for this, at least for a while.

Vlad:
[50:05] We've got to de-risk and do kind of what everyone else is doing in a sense, which is, you know, having a larger non-U.S. business. So that's where we actually started the initiative of launching in the EU and internationalizing our business. And now we have both, right? We're growing the international business, but we also see opportunities to invest in the U.S. So I think you'll just see shifting between those two. like maybe if there's less clarity in the U.S. While pushing for that greater clarity, we invest more internationally. Once the clarity comes, I mean, obviously we have so much, so many customers. Crypto is a big business, close to 20% of our revenue in the U.S. So we have to make sure we serve customers here with all the tools that they need to be competitive.

David:
[50:58] Yeah, I was at your guys' Robinhood event in Cannes in France where you guys announced like the Robinhood chain and then the tokenized stocks and everything was like, and for our EU customers, and for our EU customers. And as a US citizen, I'm not used to feeling jealousy over EU citizens over their ability to access tech, but it really felt like the shoe was on the other foot. But that is starting to change. We have a new administration, both on the SEC and the CFTC side. We just had a conversation with Mike Selig from the CFTC who said the CFTC is about to green light perps in the United States. That's a market that's previously been offshore. Within weeks, he wants to bring perps onshore. In that event, you guys talked about bringing perps into Robinhood. So with the green lighting of perps by the CFTC, soon TM, according to Chair Selig, how quickly do you think you can flip that switch for Americans? And what will that actual product look like inside of Robinhood?

Vlad:
[51:52] Pretty quickly. We already have non-perpetual futures offered to our customers. We launched that. About a year ago. And that's been growing really well. And we have a really nice mobile interface called the Trading Ladder that allows you to kind of very tactically engage with the order book. So I think a lot of the standalone futures experience actually translates very, very well to perps. We also have perps live in the EU in our app there. And those are offered via Bitstamp. So we're kind of a full stack Perpetuals product. So I don't think it would take us long at all. It's about just kind of making sure that the guidance is clear and we can put a compelling product in front of customers pretty quickly. We've talked about the needs of younger generations, the great wealth transfer,

Ryan:
[52:50] All of these things. I will say, you know, maybe speaking on behalf of kind of the millennial generation and also Gen Z, one of the biggest pain points I have is not having access to particular growth equities that I wish I had access to. So for retail investors, this means missing out on Stripe, missing out on SpaceX, missing out on Anthropic. I know you mentioned earlier in our conversation, the Robinhood Ventures Fund, which seeks to help with that a little bit. But there's still a whole bunch of these private equities that retail investors can't get their hands on. And they're missing all this upside, missing all of this growth. It seems structural at this point, like public markets kind of failing from that perspective. Is there any chance that that changes, that we get more democratization in terms of opportunities? And what structurally has to change for retail investors to have a shot at some of these private companies? Yeah.

Vlad:
[53:46] I mean, I think Robinhood Ventures is a big first step in the right direction, right where, you know, through Robinhood Ventures, we launched and successfully IPO'd in a very difficult market, by the way. Last week, Robinhood Ventures fund one. And RVI has signed pending close investment in Stripe. We've invested in Databricks twice in the past two rounds. We've got Boom Supersonic, the sound barrier breaking jet company that's also making gas turbines, Mercore, Revolut, Ramp, and Airwallex, which is another fintech company, and Aura. I'm wearing the ring right now.

Vlad:
[54:34] So yeah, I think that With the capital we raised from the IPO, Robinhood Ventures is going to continue to get into deals and give access to retail for these companies. And then you notice it's the first fund, right? So we anticipate that there will be future funds and we'll be able to really just like hit the investing in private companies for retail problem from various angles. So I see a world where if you're a founder raising a seed round or a series A, retail is a big chunk of your fundraising story. And that's just simply not a thing. And if you think about what we're doing now, you know, we started off giving IPO access on a level playing field with institutions to retail. Now we're, I believe, the largest retail participant in the IPO market through our IPO access product. Robinhood Ventures Fund One is like a typically later stage pre-IPO fund.

Vlad:
[55:41] But over time, there'll be earlier stage vehicles as well, where the risk is higher, but the potential upside is much greater. And then you saw what we did in Europe with tokenization of privates. Yes. My hope and belief is that that's the end state, but I think there's a lot of wood to chop to get there. And in the meantime, you know, these these closed end fun products is probably the best that we were going to be able to do for retail, at least for a little while. This has been great.

Ryan:
[56:16] As we maybe draw this to a conclusion, of course, Robinhood has had a lot of success in terms of spotting some trends early. I mean, two big ones, I feel like. One is the zero commission trading type thing, forced the entire industry to follow democratized equities for a generation. The second is crypto. When it was contrarian, you guys

Vlad:
[56:36] Went in and

Ryan:
[56:36] You went in big. You went in early. You developed a fantastic business there too. And it seems like the strategy has been consistent. It's kind of really owning the UX and capturing this next generation of investors. You've done this twice. The question is, what's the third biggest opportunity? What are the big opportunities right now for Robinhood moving forward? Is it perps?

Vlad:
[56:59] Is it this

Ryan:
[57:00] Idea that we talked about of a super app? Is it international? Is it all of these things combined? What's the next biggest opportunity for Robinhood?

Vlad:
[57:08] A lot of things we've announced already, and you can kind of see, well, you've got social coming. That's completely going to transform the Robinhood experience and add new elements. Prediction markets has grown quite big. And I think you've seen hints of our AI products. You know, we've introduced AI through Cortex into our products in ways that are extremely useful. But we're just scratching the surface. And I think that, you know, we're wrestling with the problem of like, what is it going to look like for an agent to run your entire financial life from trading all the way through to, you know, managing, you know, your savings and kind of your extremely passive activities? And can it look very much like family office for your financial life? So, yeah, I think there's going to be, there's just lots of white space for innovation and we're excited to. To explore that and share what we're working on in the form of real products that make people's lives better.

Ryan:
[58:15] Well, let's end it there, Vlad. You guys are doing a great job on that front. I want to congratulate you, especially for your work in crypto. You know, we're big fans here. We've got to end it. Let's end with this. None of this has been financial advice. Of course, you guys know crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless Journey. Thanks a lot.