Last month, Robinhood co-founder and CEO Vlad Tenev highlighted the enormous financial benefits of using blockchain for trading and his belief in the future of tokenization. He observed that meme currencies and speculation tend to attract attention. By implication, this distracts from true utility.
“We have these two businesses (crypto and traditional) and we can see them side by side,” he told Fortune. “The cost of running a crypto business is an order of magnitude lower because you can leverage a lot of the public infrastructure and these public blockchains do a lot of the heavy lifting in terms of settlement and transactions.”
“There’s just a clear technological advantage to putting more and more things on that infrastructure.”
Tenev is more aware than others of the cost advantages because of the razor-thin margins on which Robinhood operates. In 2023, Robinhood’s 23.4 million active customers generated an average revenue per user (ARPU) of $80 per year. Half of that came from interest. In contrast, established broker Schwab has an older, wealthier clientele. Its ARPU is $541 per user for 34.8 million active customers. Again, half of that comes from interest.
“It’s kind of like moving from mainframes to on-premises to the cloud,” Tenev added. “I think the next transition for financial services is going to be more and more blockchain-driven. More and more financial products that we think of as traditional are going to be traded and held on blockchains as well.” He mentioned fixed income and equities.
Some observers have speculated that Robinhood could launch a stablecoin, given that Tenev mentioned that people overseas want dollars and stablecoins are the easiest way to do that. Given the large proportion of Robinhood’s revenue that already comes from interest, this could make sense.
“There’s a kind of view of crypto as a technology layer that’s really going to accelerate once people understand there’s a huge efficiency advantage,” he concluded.
In June, Robinhood agreed to acquire global cryptocurrency exchange Bitstamp for approximately $200 million.
