Last month Robinhood co-founder and CEO, Vlad Tenev, outlined the huge cost benefits of using blockchain for running operations and his belief in the future of tokenization. He observed that the meme coins and speculation have a tendency to grab attention. By implication, this distracts from the true utility.
“We have both of these 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 get to leverage so much of the public infrastructure and these public blockchains do a lot of the heavy lifting when it comes to settlement and transactions.”
“There’s just an obvious technology advantage in putting more and more stuff on that infrastructure.”
Tenev is more aware of the cost benefits than others because of the wafer thin margins on which Robinhood operates. In 2023 the average revenue per user (ARPU) of Robinhood’s 23.4 million customers was $80 per annum. Half of that was from interest. By contrast, established broker Schwab has an older, wealthier client base. Its ARPU is $541 per across 34.8 million active clients. Again, half of that is interest.
“It’s kind of like going from mainframes to on premise to cloud,” Tenev added. “I think the next transition for financial services will be more and more of these things are going to go on blockchains. More of what we consider traditional financial products will be traded and custodied on blockchains as well.” He mentioned fixed income and equities.
Some observers have speculated that Robinhood might launch a stablecoin, given Tenev mentioned that overseas people want dollars and stablecoins are the easiest way to achieve that. With the high proportion of Robinhood’s revenues that already come from interest, that might make sense.
“There’s like a view of crypto as a technology layer that’s going to be really accelerated once people understand that there’s a huge efficiency advantage,” he concluded.
In June Robinhood agreed to acquire international cryptocurrency exchange Bitstamp for around $200 million.
