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Robinhood CEO Vlad Tenev Describes Crypto as Next Transition for Financial Services: ‘Clear Tech Advantage’
As brokerage firm Robinhood tries to establish itself as a publicly traded company, its CEO is still trying to figure out how to balance the platform’s roots in day trading with his desire to build a sustainable business.
Speaking at Fortune’s Brainstorm Tech conference on Monday, Vladimir Tenev reflected on his difficult tenure at the helm of the decade-old company, from startup darling to global villain. Game Store meme stock debacle 2021. After stock market turmoil sent Robinhood shares tumbling shortly after an initial public offering, Tenev said the platform is finally hitting its stride. Part of that can be attributed to the company’s investment in one of the most volatile assets: cryptocurrency.
While Robinhood has allowed customers to trade cryptocurrencies since 2018, it has moved further into the space in the past two years, including launching crypto trading in Europe and acquiring long-running exchange Bitstamp for $200 million in June. Tenev said he sees a clear upside in doubling down on the industry, which he described as more than just memecoins and speculation.
“The cost of running a cryptocurrency business is an order of magnitude lower,” he told Fortune Editor-in-Chief Alyson Shontell on stage, citing the ability to leverage open-source infrastructure like blockchain. “There’s just an obvious technological advantage.”
Robinhood isn’t the only financial firm pushing forward into cryptocurrency-related businesses, with historic firms like Black rock TO Goldman Sachs Consulting Firm experimenting with the hot field of tokenization, where assets from dollars to stocks are issued on blockchains. Tenev expressed his bullish view on the field, predicting it will be the “next transition” for financial services, thanks to the ability to eliminate costly middlemen such as for settlement of transactions. “You don’t have to squint too hard to imagine a world where stocks are on blockchain,” he said.
Time for reflection
While Robinhood has stabilized as a leading investment platform for younger traders, its future looked precarious in 2021, when the company was at the center of the meme stock craze. After fueling its rise through risky offerings like options, Robinhood had to limit customer trading during a brief period of market volatility in January 2021 due to capital shortages. And as public markets froze in 2022 and interest rates rose, Robinhood’s stock fell as much as 90% as it lost its core customer base.
Tenev said the company and its stock were able to recover somewhat by revisiting its core offerings, including the idea that all investors should be treated equally. One change was to offer white-glove service to its power users, upending Robinhood’s core thesis of customer equality.
The platform has also moved from focusing on active trading to diversifying into other products, including retirement accounts, a credit cardand high-yield cash accounts. However, Tenev said he still wants Robinhood to be able to compete with other brokerages, and even banks, for all types of customers, including high-net-worth individuals. “The aspiration is for people like me to have all their wealth in Robinhood,” he said.
Part of Tenev’s journey over the past two years has been personal, too, including contemplating what would happen if the board decided to replace him as CEO. But he credits his immigrant background (he was born in Bulgaria) and personality for allowing him to navigate the turmoil. “I have this pathological stability,” he said. “It can be very uncomfortable for people.”
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