WEBVTT - Robinhood CEO Vlad Tenev Talks Need for Clarity on Stablecoin Policy

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>I'm pleased to say joining us now is Robin Hood's

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<v Speaker 2>CEO of vlad Tenev, along with Bloomberg's Chanali Bassk, or

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<v Speaker 2>expert on.

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<v Speaker 3>All things crypto.

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<v Speaker 1>Lad.

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<v Speaker 2>I want to start with the SEC here, because, as

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<v Speaker 2>you heard from Nathan Dean, those in the crypto industry

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<v Speaker 2>are pretty pleased probably with Paul Atkins becoming Chair of

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<v Speaker 2>the SEC once he is confirmed. I'm curious to start

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<v Speaker 2>off with your take, your assessment of how much interim

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<v Speaker 2>chair Mark Ueda has done to enable Atkins to hit

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<v Speaker 2>the ground running once he is confirmed.

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<v Speaker 4>I think we're very optimistic about Paul Atkins. He's I

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<v Speaker 4>think he has the right mindset. The US needs to

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<v Speaker 4>be a leader in this important, new, burgeoning industry, and

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<v Speaker 4>we really like what we're hearing. And I think on

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<v Speaker 4>an interim basis, the SEC has actually done more than

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<v Speaker 4>I think in the past four years. Certainly, although admittedly

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<v Speaker 4>that's not a very high bar to provide clarity clarifying that,

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<v Speaker 4>for example, meme coins are not securities, as well as

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<v Speaker 4>clarity that they've provided on staking unregistered staking has been

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<v Speaker 4>very helpful. So that's a start we also need clarity

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<v Speaker 4>on stable coin, and having stable coin clarity will further

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<v Speaker 4>US dollar dominance, particularly overseas and with market structure, which

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<v Speaker 4>I know the previous guests just spoke about. Market structure

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<v Speaker 4>is also critical because if we can pave a path

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<v Speaker 4>towards tokenization of securities, that ensures dominance of US assets

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<v Speaker 4>and also US companies overseas. So tokenization, accredited investor relaxation,

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<v Speaker 4>because the accredited investor rules need a complete rethink. I

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<v Speaker 4>think I think those are things that we look forward

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<v Speaker 4>to working with the incoming administration and share adkins upon confirmation.

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<v Speaker 4>I think those are two big priorities for continued dominance

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<v Speaker 4>of the US financial system globally.

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<v Speaker 1>You know, I'm glad you brought up meme coins in particular.

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<v Speaker 1>I think we've talked about this a bunch in the past.

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<v Speaker 1>But the proliferation of meme coins you've seen and the

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<v Speaker 1>precipice of relaxing listing standards across different exchanges, do you

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<v Speaker 1>worry that this might go too far?

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<v Speaker 3>At what point are you even looking.

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<v Speaker 1>For the sec to step in and say this is

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<v Speaker 1>what the barrier is.

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<v Speaker 4>Yeah, I think there's two ways to look at it.

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<v Speaker 4>One is obviously there's a huge proliferation of different types

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<v Speaker 4>of coins. The barrier to creating a coin has dropped

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<v Speaker 4>tremendously where someone can just go on their computer and

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<v Speaker 4>immediately create something that has access to global liquidity and

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<v Speaker 4>trades quite a bit.

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<v Speaker 3>But there's a positive to that.

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<v Speaker 4>There's an immense amount of power in that because juxtapose

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<v Speaker 4>it with the immense difficulty in a company going public.

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<v Speaker 4>You have to pay tens of millions of dollars in fees,

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<v Speaker 4>it takes several months. It's so complex and burdensome that

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<v Speaker 4>companies aren't even doing it anymore. I mean, you have

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<v Speaker 4>to be at tens of billions, maybe hundreds of billions

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<v Speaker 4>of valuation before it starts making sense. So I think

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<v Speaker 4>this technology provides an alternative, and if you compare it

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<v Speaker 4>to traditional capital formation, there's definitely advantages, and I think

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<v Speaker 4>that's what happens. That's why it's so important to have

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<v Speaker 4>a comprehensive securities market structure framework for crypto assets so

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<v Speaker 4>that you can tap into that.

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<v Speaker 1>What's incredible too, is just in the last twenty four

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<v Speaker 1>hours we hear at Bloomberg have reported that open ai

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<v Speaker 1>is close to finalizing a forty billion dollar fundraiser that

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<v Speaker 1>would value the company at three hundred billion dollars. It

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<v Speaker 1>would be the largest of all time. This is not

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<v Speaker 1>open to retail investors. To your point on accreditation rules,

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<v Speaker 1>how drastically do you think that they could change under

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<v Speaker 1>the new SEC chair such that more Americans would have

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<v Speaker 1>better access to younger companies before they become three hundred

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<v Speaker 1>billion dollar companies.

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<v Speaker 4>Yeah, I mean you wouldn't be surprised to hear that.

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<v Speaker 4>I think they need a total reboot. I think it

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<v Speaker 4>should be much more self certification. I think platforms like

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<v Speaker 4>robinhoods should obviously be required to clearly communicate the risks

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<v Speaker 4>and put different types of companies into different buckets and

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<v Speaker 4>make that clear to customers. But at the end of

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<v Speaker 4>the day, I think it's it's silly that you know

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<v Speaker 4>those companies are deemed too risky for non accredited retail investors,

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<v Speaker 4>effectively shutting out out over eighty percent of the investor

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<v Speaker 4>base from a company like open ai or SpaceX.

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<v Speaker 2>So, Lott, I want to ask you about twenty four

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<v Speaker 2>seven trading. The NAZAC is planning to launch that later

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<v Speaker 2>on in twenty twenty six. You already offer a twenty

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<v Speaker 2>four hour market in some products. How much can you

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<v Speaker 2>expand on that with NAZAC and other exchanges moving over

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<v Speaker 2>to a twenty four to seven kind of trading policy.

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<v Speaker 4>Yeah, I mean we're really happy to see the major

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<v Speaker 4>exchanges integrating and supporting twenty four hour markets. I think

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<v Speaker 4>they've been reluctant to do so just because there's operational complexity,

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<v Speaker 4>and so Robinhood has taken on a lot of that

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<v Speaker 4>complexity on behalf of our customers to make it easy

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<v Speaker 4>to stitch stitch together different market sessions so that you

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<v Speaker 4>have that round the clock trading experience.

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<v Speaker 3>And I think we have to go beyond that.

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<v Speaker 4>I mean markets still, our US equity markets aren't open

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<v Speaker 4>on Saturdays or holidays, for instance, and I think we

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<v Speaker 4>have to work to resolve that. So the big exchanges

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<v Speaker 4>coming in is a big step forward. It unlocks greater liquidity,

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<v Speaker 4>It makes it easier for more participants to come in

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<v Speaker 4>who don't have the capabilities to easily do what we've

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<v Speaker 4>done in terms of making the technology available, and I

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<v Speaker 4>think it's part of a progression it ends in twenty

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<v Speaker 4>four to seven. I mean, this is like the last

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<v Speaker 4>vestige of brick and mortar finance in trading, and I

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<v Speaker 4>think eventually it'll be completely digital like the crypto industry.

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<v Speaker 4>I think that's where it's all heading.

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<v Speaker 2>Robinhood is entering the banking sector. The trading platform said

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<v Speaker 2>today it will be rolling out checking and savings acounts

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<v Speaker 2>this year, as well as a wealth management service to

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<v Speaker 2>its Gold subscribers. The CEO of Robinhood of Latenet is

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<v Speaker 2>still with us and lad this idea of offering wealth

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<v Speaker 2>management services to your customers. How much of this is

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<v Speaker 2>about replacing your customer's existing bank accounts to be their

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<v Speaker 2>new bank.

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<v Speaker 4>It's really about giving you the power of a financial

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<v Speaker 4>team through Robinhood across your entire financial journey. So Robinhood

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<v Speaker 4>Banking gives you what we believe to be the highest

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<v Speaker 4>quality almost private private banking like experience in digital form

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<v Speaker 4>to our customers.

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<v Speaker 3>So that one's very exciting.

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<v Speaker 4>Robinhood Cortex, which is basically your research assistant powered by

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<v Speaker 4>AI that can help you with your self directed trading

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<v Speaker 4>and investing needs. And then Robinhood Strategies, which we think

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<v Speaker 4>is going to be the best digital advice offering on

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<v Speaker 4>the market.

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<v Speaker 3>And so we have.

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<v Speaker 4>Banking, we've got self directed, we've got digital advice, and

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<v Speaker 4>also with the Trade PMR acquisition, we're going to for

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<v Speaker 4>customers who want in person advice with an actual advisor

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<v Speaker 4>that offering as well. So it's really wherever you are

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<v Speaker 4>in the journey, Robinhood should help you manage your finances

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<v Speaker 4>with the best experience and the lowest possible costs.

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<v Speaker 1>How competitive do you plan to be on rates? We've

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<v Speaker 1>seen you come out with products before, like margin accounts,

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<v Speaker 1>and you've been quite competitive. Are you looking to offer

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<v Speaker 1>better rates than the current banking rivals out there on

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<v Speaker 1>checking in savings? Are you looking to beat the likes

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<v Speaker 1>of a Marcus for example.

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<v Speaker 4>Yeah, we announced yesterday at our Gold event that on

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<v Speaker 4>the banking side, we're going to be very competitive on rates.

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<v Speaker 4>You'll get the same four percent ap y that Robinhood

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<v Speaker 4>offers through a cash suite product in savings accounts, which

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<v Speaker 4>is nine times the national average. So that product's very

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<v Speaker 4>very I mean, it's done quite well and we're going

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<v Speaker 4>to bring that same rate to bank. The rate on

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<v Speaker 4>the digital advice Robinhood strategies offering is also very innovative

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<v Speaker 4>because not only is it a low zero point two

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<v Speaker 4>five percent of assets under under management, but we cap

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<v Speaker 4>that at two hundred and fifty dollars per year. So

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<v Speaker 4>let's say you have you know, a million dollars managed

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<v Speaker 4>with Robinhood strategies, you're still paying only two hundred and

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<v Speaker 4>fifty dollars a year. If you have ten million, it's

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<v Speaker 4>also capped at that amount. So for a digital advice offering,

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<v Speaker 4>you're getting the same service even if you're managing ten

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<v Speaker 4>times as much money. So why are you paying ten

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<v Speaker 4>times as much at other places? So we're fundamentally breaking

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<v Speaker 4>that model for digital advice.

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<v Speaker 2>Lat How far are you going to go in terms

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<v Speaker 2>offering services to your customers? Are you going to offer

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<v Speaker 2>conventional loans at some point? Could we see I don't know,

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<v Speaker 2>let's just say personal loans, mortgages at some point from Robinhood.

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<v Speaker 3>Yeah, right now. With the Robinhood credit card, which in

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<v Speaker 3>my opinion is the.

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<v Speaker 4>Best credit card on the market, three percent cash back

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<v Speaker 4>on all categories. That lets you have essentially a credit

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<v Speaker 4>card loan that we administer. And that's the most complex

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<v Speaker 4>type of loan because the velocity of it is fast.

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<v Speaker 4>It's a frequent use case product. So that kind of

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<v Speaker 4>gets us in there. If you think about these other products,

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<v Speaker 4>whether it be a personal loan or a mortgage, those

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<v Speaker 4>are less frequent, So from a product experience standpoint, it's

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<v Speaker 4>actually much much less complex for us to offer that

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<v Speaker 4>in the future. Credit card is the most difficult, and

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<v Speaker 4>we're tackling that first.

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<v Speaker 3>We're focused on that. It's going incredibly well.

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<v Speaker 4>We announced that we're going to double the number of

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<v Speaker 4>customers that the credit card is rolled out to in

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<v Speaker 4>the next week, and that's going to be an advance

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<v Speaker 4>of dramatically accelerating the roll out this year, So we're

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<v Speaker 4>definitely moving in that direction.

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<v Speaker 3>Flat.

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<v Speaker 1>We don't have a lot of time here, we have

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<v Speaker 1>less than a minute, but I do want to ask

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<v Speaker 1>a question just quickly on stable coin, really quickly. You

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<v Speaker 1>were talking about how this twenty four to seven trading

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<v Speaker 1>phenomenon you expect to expand in a pretty meaningful way.

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<v Speaker 1>But the way that it's done at Robinhood is by

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<v Speaker 1>using stable coin. And there's also separate legislation being passed

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<v Speaker 1>in Congress on the brink of it to allow stable

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<v Speaker 1>coins to be more usable across the financial industry. Do

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<v Speaker 1>you think this is going to become more commonplace practice.

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<v Speaker 3>I think so. Yeah.

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<v Speaker 4>I think that it's a good first step for crypto

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<v Speaker 4>legislation in Congress because generally everyone agrees that we should

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<v Speaker 4>have stable coins and that they're good for the country,

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<v Speaker 4>for the local companies and the crypto industry.

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<v Speaker 3>But it's not going to be enough.

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<v Speaker 4>I think we need comprehensive market structure legislation coming in

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<v Speaker 4>quickly thereafter, because there's so many things that are not

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<v Speaker 4>stipulated to stable coin bill. You still need to figure

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<v Speaker 4>out how to pay interest, pay yield to stable coin holders,

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<v Speaker 4>and that's not really stipulated, and of course securities. Being

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<v Speaker 4>able to tokenize securities is the largest opportunity, the one

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<v Speaker 4>that I think is going to be most important for

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<v Speaker 4>us to get legislation on.

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<v Speaker 2>Got it all right, Tenive, thank you so much. Lod

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<v Speaker 2>Tonive is CEO, Robin thanks for having me. And we

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<v Speaker 2>also want to thank Bloomberg, Scchanale, Basic