Robinhood to Deploy Integrated Crypto Wallet in 2022


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Robin Hood Wednesday announced plans to launch a new wallet for cryptocurrencies like Bitcoin, Ether and Litecoin. Those interested in beta testing the new feature can register soon, although the official release will not come until 2022.

Founded in 2013, Robinhood’s financial app, which makes buying and selling stocks easy and free, also offers cash management accounts and as of 2019 supports some cryptocurrency exchanges. The company was in the throes of controversy, attracting the attention of state regulators and academics for “gamify the investment” and for his role in GameStop’s business fiasco earlier this year.

Yet by offering a cryptocurrency wallet, the company is giving its customers more of what they want: nearly 60% of app users bought or sold cryptocurrency in the previous quarter, according to Robinhood. And the focus of investment within Robinhood’s user base continues to change: For the first time, the company revealed, first-time purchases by new users more often involve cryptocurrencies than stocks.

“Our customers have requested the ability to send and receive crypto on Robinhood, and that’s exactly what we’re building,” said Christine Brown, Robinhood COO.

CNET spoke with Brown to discuss the future of cryptocurrency trading, the company’s new wallet, and how it decides which coins to support. Here is what we learned.

Why is Robinhood building an integrated crypto wallet?

“When you look at Robinhood’s clients, about half are first-time investors,” Brown said in an interview with CNET.. “In crypto in particular, there’s this generational shift in the way users invest. It’s something we’ve seen happen over the past six months. I think crypto is a central part of that. So creating accessible and available functionality and making the cryptocurrency market and ecosystem easier to approach for the first time is really aligned with our mission to democratize finance for all. “

Will the wallet be free?

Robinhood wants to make it easy and inexpensive for its users to access crypto markets, Brown said, so that its wallet is free to use, in the same way that wallets work on other exchanges like Coinbase. However, Robinhood users will still have to pay the transaction fees.

“We have not added any fees to the [wallet] product. We will pass on any transfer fees that exist when you transfer assets on-chain. But there is no additional charge for Robinhood, ”Brown said.

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Will users hold the keys to their Robinhood wallets?

No. The Robinhood wallets are custodial, meaning access to your crypto assets will ultimately be held by Robinhood. This removes the burden of keeping up with your keys, which some users may prefer. However, your ability to access to your Robinhood wallet depends Robinood’s infrastructure. Some crypto enthusiasts may feel wary about entrusting the security of their crypto assets to a centralized authority.

“This will be a custodial wallet, or a ‘hosted’ wallet. Users who have the ‘Not your keys, not your coin’ mentality will be able to transfer into their own wallet and manage their own keys if they want to.”

That means that Robinhood users will retain the right to transfer their crypto assets from Robinhood’s wallet into their own noncustodial wallet, where they can have full control.

Will Robinhood have access to my wallet?

Robinhood says it will track some transactions in an effort to prevent fraud, which is increasingly common in the cryptocurrency market. The company will have access to your wallet and its contents.

Brown confirmed, “Yes. We will have the ability to understand all of the assets under custody that users deposit onto our platform.”

Read more: What to know about cryptocurrency pump-and-dump scams

If my wallet is custodial, where is the crypto?

When you buy cryptocurrency and store it in your Robinhood wallet, Robinhood controls that cryptocurrency. 

“The product we’re launching mirrors the infrastructure and setup we use today to [manage] keeps all of our customers’ coins. When you make a purchase from Robinhood, we actually acquire these parts. We hold them in-house and have a mix of hot and cold preservation solutions to make sure our users’ assets and their parts are as protected as possible, ”explained Brown.

How will Robinhood authenticate my identity to transact to and from my wallet?

“We’re building a new in-app multi-factor authentication process, so we know it’s you when you initiate a transfer. There is no way anyone else can initiate a transfer to a transfer. wallet without your confirmation.There are several steps of confirming that it is in fact you as the person doing it, ”Brown said.

How does Robinhood determine which cryptocurrencies to support?

Robinhood has also announced that it will be adding new parts to its platform.

Most of us are familiar with Bitcoin. But there are other major coins, including Ether and Litecoin, as well as countless other niche cryptocurrencies that are popping up all the time. Robinhood wouldn’t provide many details on its criteria for which parts to take care of and which to ignore.

Brown said, “The world of parts is huge – there are thousands of parts. We have a process to look at all the parts that we would like to list, and we make sure we list the parts that meet a certain level of criteria. and standards on our side. There’s a little bit of secrecy in this sauce of what’s in our asset listing framework. But we put all of our parts through a rigorous review process before they’re on the shelf. platform and accessible to our users. “

Robinhood currently allows users to buy and sell Bitcoin, Bitcoin Cash, Bitcoin SV, Dogecoin, Ethereum, Ethereum Classic and Litecoin.

When will Robinhood’s crypto wallet be available?

Robinhood said the wallet will be rolled out next year. But users will soon be able to add their name to a waiting list to become a beta tester.

“We’re going to be rolling out a beta group of initial customers over the next month or so. And we’re going to be building in public, so those users are going to get a first version of the app. We’re going to look to them for their feedback and their first experiences, and that will help iterate and drive the end product that we produce, ”said Brown.

“Beyond next month, we will deploy users to our waitlist until early 2022.”


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