Robinhood launching cryptocurrency wallet feature
Popular trading and investing app Robinhood on Wednesday announced the launch of a new cryptocurrency wallet feature on its platform as more users are looking to invest in digital currency.
The wallets, which already have a waitlist in place, will be able to accept and distribute cryptocurrencies like Bitcoin and Ethereum within an existing Robinhood account. As with other transactions, any trading done with cryptocurrencies on the app will be free of commission fees.
“We’re excited to make crypto more accessible by making investing simpler, more straightforward, and low cost –– just as we’ve done for equities,” the company said in a blog post confirming the new feature.
Robinhood officials also added that they will rely on user feedback to continue updating and improving the app. A select few customers pulled from the waitlist will initially pilot the wallet, and the company will employ a broader rollout at a later date.
The app was previously the platform upon which several retail investors from forums on Reddit orchestrated a short squeeze on several previously obscure stocks, namely GameStop, AMC, and BlackBerry. This resulted in major jumps in share prices that rattled hedge funds and spotlighted the power individual investors have when organized against major financial firms.
Crypto has been permitted as a viable currency on the app since 2018. It recently permitted recurring investments using cryptocurrencies. Robinhood went public and debuted on the Nasdaq on July 29.
Legislators and regulatory agencies have been closely monitoring the mainstream developments of the crypto industry as more businesses are opting to accept various currencies in financial transactions. Regulating the powerful yet fledgling industry has been a priority on Capitol Hill, where language surrounding cryptocurrency transactions remains in dispute within the bipartisan infrastructure bill.
Rival companies have run into trouble with regulators when expanding their cryptocurrency service offerings. Coinbase, a platform dedicated to buying and selling crypto and NFTs, was the subject of a Securities and Exchange Commission (SEC) investigation as it prepared to roll out a cryptocurrency lending platform.
Coinbase’s tool, dubbed Lend, would allow users to use stablecoins, a cryptocurrency pegged to a fiat or other commodity, to lend out and gain interest. Amid purported threats by the SEC to sue Coinbase, Lend will not be launching until at least October.
These regulatory hurdles haven’t deterred crypto-friendly investors; CNBC reports that half of Robinhood’s revenue from transactions last quarter was from cryptocurrency trading.
“We are completely aligned with our regulators and the SEC to make sure that we are working on this with educational tools, with protection with safety. That’s great for customers that’s great for us,” Robinhood chief product officer Aparna Chennapragada said to reporters.