¶ Intro
I think that more and more people are getting interested in staking they hear about it. I mean Robinhood's mass market product. So I think as people see the yield that they're getting and kind of share the concept with their friends, I think it'll be hard to maintain control of assets on a centralized platform, particularly unless you're giving some exposure to that yield.
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visit the link in the description. Hey, folks, welcome into the Thinking Crypto podcast. I'm your host Tony Edward and we are recording at Station three in New York's Financial District today and my guest is Vlad Tenev, who's the co founder and CEO of Robinhood. Lad, awesome to have you on.
Thanks for having me, Tony. Good to be here, Glad.
This is so awesome. I've been a user of the robin Hood platform for many years. It made me want to get into investing because as an immigrant kid, I never really thought about investing in stocks. But Robinhood came along. It made it so easy. You know, what's your vision
¶ Vision for Robinhood
for the company as it continues to grow and it's had all this success.
Yeah, so a Robinhood. I like to think of it as financial super app. But right now we're still primarily US based and still primarily retail, and I think over the long run, we should be a platform that can help you with all of your financial needs, whether you're in the US or anywhere else in the world, whether you're an individual or a business or institution, we should just be central to all of your financial needs.
Yeah, and it feels like the world is heading that way, where everything is on this smartphone. And then with crypto, it's not even account based anymore, it's more wallet based. So do you see the direction being not only an app but a wallet for the future.
Yeah, I think that there's definitely some benefits to having a wallet experience. I think one of the main benefits that is off an overlooked actually is that with non custodial wallets, you're basically in complete control of your assets. So that makes you less reliant on the broker as a construct. If you're unhappy with the broker, you can
easily switch your assets to another provider. I mean, as long as the blockchain is up and running, you have control over your assets, and I think that's a very powerful thing. I mean, we're in the traditional brokerage space as well as crypto, and we've been a net beneficiary of asset transfers so more. I mean this quarter we announced for many quarters running, we're net We're getting net transfers in from pretty much all of our brokerage competitors, and so we see how crufty it is. We'd like
to make that process better. We think that it should be as easy as possible to move your assets, to have control of your assets, and you know, if you're unhappy with the service, we should compete over quality of service, not make it as difficult as possible to move your
your assets out. I think a lot of our competitors will probably disagree with that, but that mindset lends itself well to self custody, where ultimately you're leveraging public infrastructure for more and more of financial services, and you know the wallet providers or the brokers differentiate on service quality.
Sure, So before I get ahead of myself, I do want to discuss you know, some success and amazing numbers
¶ Business & Financial performance
you've had from a quarterly standpoint and year of the year revenues up forty five percent year of a year. We also have your net deposits of thirteen point eight billion on your third highest quarter on record. Amazing accolades, amazing numbers. What do you think about the growth and is it because the mar gets are growing the world's becoming more financialized and things like that, well.
We like to look at the leading indicators of growth because these are downstream metrics. You know, if you think about it, the path to producing earnings per share and revenue is get more customers. Make the customers as happy as possible so that they put more assets onto the platform and use a lot of your products. And then the more products they use, the higher their wallet share is, the higher their account is. That drives net deposits, which
ultimately drives revenue. And we like to focus as upstream on the funnel as possible, so getting more customers, we have a lot already, making sure they're as happy as possible. Our NPS is at a four year high, and that's really what's been leading to the net deposit growth and the market share gains across all of our businesses. And we think there's more tailwinds, you know, we think that
we're moving fast. The product velocity. The product velocities perhaps the leading indicator of everything because that's the rate at which we're improving our products and services, and that's what we found drives customer satisfaction and NPS. So we see tailwinds, we think we can we can continue and I look at the product, and I still see all the ways that it's clunky and could be better, and I don't think we're close to done.
Well. The user interface and the UX right now, it's pretty great. Like I said, I'm a user of the product, and I can't wait to see what additional features you guys roll out. Like I know it seems really silly, but like I love when I deposit money and it does this little graphical movement and it's like this lightning. But like, just stuff like that is like rewarding as a user. I don't know if that makes sense, just like a dopamine hit.
Almost well, we want to make sure that each moment, especially the big ones that are that are meaningful to you, like depositing money into that account, we take a little bit extra care and precision to make you feel like the people building the products actually care about the experience. And you know, I think the experience is an important bit. It's one of the things that differentiates us relative to our peers. But there's still problems that we need to fix.
I think one of the things we've been thinking about lately is we have all these products, we have all these accounts. Now it's not just a trading app for stocks, but we've got retirement accounts, We've got joint accounts for your spouse bankings coming in there. We've got a great credit card offering. And you know, we've been thinking all right now that we've moved from a single account, how do we how do we make sense of all these
accounts and products. So you might have seen some interface changes to make it easier to discover our new products to sort of like organize your assets into new accounts, but that that's kind of the next area that we're trying to simplify for our customers.
In line of what we were talking about earlier with the wallet base and set up for the future of finance. You have all these suites, this full suite of products. You're disrupting many big players on Wall Street and tradfi.
¶ Disrupting wall Street & TradFi
Do you feel you have a targeting your back that they're kind of going to look to launch something similar to what you're doing, or you have this head start they may not be able to catch up.
I think it's going to be tough to catch up if you're an incumbent, because we're not only further ahead. I think in most of the areas that I believe matter, but we're also moving much faster and so by the time they catch up to where we're at now, we'll probably be two or three steps ahead. So I worry less about those firms. I think the real competition at the end of the day is going to be the AI firms. That's who we're competing with for talent, and
I think that's the leading indicator of all. And if I had to think about, you know, what are the new platform shifts, I think we've gone through mobile and cloud and Robinhood I believe is emerged the winner of that platform shift. But then there's another one with artificial
intelligence and crypto. So we have these two platform shifts that are that are happening simultaneously, and I think most of my attention is making sure we navigate those well and we actually emerge the category leader as a result of those platform shifts. And you know, we have some assets to bear that should help us, which is we've got scale. We still move fast despite our large scale and user base. But yeah, I think the bigger sort of like thing to watch out for is companies that
are unencumbered by legacy technology. Web three companies, companies and founders that are AI native and basically have like a clean slate to build, So that that's probably what we spend most of our time thinking about.
Oh absolutely, you mentioned AI. It's going to play a
¶ AI Investing & Markets
big part in markets and in our lives in different ways. I envision one day logging into Robinhood and have an AI agent and says, hey, Tony, how are you good morning. Here are some stock picks, here's some crypto picks. Here's how your portfolio is doing, Here's how the market's doing, Here's what the FED is doing. And just giving me all that information customized to me and what I like to invest in and things like that.
Yeah, I'm guessing you're a gold member. Yeah, you've got a Robinhood gold account. Are you have you had Cortex rolling out to you yet?
I don't think so, And I honestly have not checked it in the past couple of months because I've been traveling.
Yeah, you should check it more regularly, because then what you'll see is actually front and center on every stock you have Cortex digests, And basically what that does is it answers the question of what's going on with this stock? You know, sometimes you have a stock that's moving up five percent down five percent. You don't really know what's driving it. And I think one of the best use cases of AI is to just give you that answer in words, and so we have that that's very front
and center. Behind the scenes, we have customer support that's basically mostly driven by AI at this point, and we've been we've been able to actually increase customer satisfaction while we've been doing this shift, which has been awesome to see. But yeah, I think I think in the future, AI will be imbued across all the relevant services in the app. We're going to start with the biggest, most important ones, but then it'll it'll just expand from there.
In the world, we're headed to where we're going to
¶ 24/7 markets
have twenty four to seven markets because of tokenization. Do you think AI agents and AI bots if you want to call them, that will play a big role in helping us maintain our portfolio because we can't stay up till three am trading markets and things like that.
I think I think that, Yeah, it's interesting question. I think there will be some of that. I think a lot of traders that I talk to that are actively managing their portfolios really like to have full control over everything. And I think there there's a little bit of an open question in the AI industry itself about what the bigger opportunity is from augmentation to replacement. And you're seeing that encoding in particular right encoding, which is actually at
the frontier of AI applicability. You have kind of these two thoughts. One is I just tell my agent you know what I want done, Versus I'm kind of in charge. I'm writing the code, the agent is like boosting my output by one hundred x. And if the first paradigm wins of like replacement of software engineer, you start to think about, like what's going to happen. Software engineers in that world would be eventually sort of like replaced, or
the job would change fundamentally. If you believe in the second world of augmentation, perhaps software engineers will be one hundred x is common. Everyone will be able to be a software engineer. And I think it's very unclear what the end state is. I mean, yeah, the folks that are telling you that software engineers are going to be completely automated away are also paying hundreds of millions to
billions in packages for engineers right now. So if you believe that both of those things can't be true in your mind. But I think with trading and financial services for the foreseeable future, I think that it'll be a story of augmentation. So I think we'll have more traders,
will build tools to make them more effective. Everyone will be able to get the technology to do sophisticated things, and I think Robinhood can can support and provide a lot of that techno and make it usable in forms that actually help our traders.
I heard someone recently say that these AI platforms and so forth will make us be less doers and more directors. So you can have multiple AI agencies along what you're saying. Maybe I have an AI agent's focused specifically on crypto, one on stocks, one on the goal market or whatever it is, and I'm directing, I'm monitoring, and they're doing my bidding, so to speak.
I think if you ask someone one hundred years ago to evaluate the state of like the modern workforce, they'd probably tell you everyone's directing, nobody's doing anything, because back then, if you weren't actually like growing your own food and you know, tilling your own soil and chopping your own wood, you weren't doing anything right. That was sort of like the dominant We were in an agricultural driven society back then, So they probably look at all of our jobs as
not real work. And it'll be like podcasts. You're a podcast hosts, so you just talk to people today and other people listen, right, So yeah, I think I think the true story is probably a little bit more complicated. I think the jobs will change, but they'll still feel like meaningful work, probably much more meaningful with much larger impact.
I mean, if you can take a trader and augment their capabilities by one hundred x in the same way that you can take a software engineer and give them the tools to perhaps run an entire software company by themselves, I think you'll have more entrepreneurs, more companies, you'll have more traders, so and and I think at the time they'll feel like real substantive work, is my guess.
When you say more traders, are you thinking not just
¶ Tokenized Global markets
the US but globally because with tokenization of traditional assets and much more, if you're in a country and Africa, or you're somewhere in India, wherever New Zealand, you now have the ability to access these markets trade them and then do defining things like that.
Yeah. I mean you look at a lot of these markets. People have access to crypto, they've been onboarded, they have crypto wallets, they're using stable coin, and when we get
US stocks on chain in a much bigger way. I think, in the same way that you know, customers in the past ten years in the US have increased their overall exposure to equities relative to cash and other assets, I'd expect customers overseas to increase their relative exposure of tokenized equities and other assets relative to stable coin.
Sure, talk to us a bit about that. Because one of your big crypto initiatives is tokenization of tradfy assets like stocks. There are going to be people watching, listening. This is a new concept to them, and they're gonna say, so, what can access Tesla stock right now now?
Yeah?
What will be your pitch to them to say, here's why we're tokenizing.
I think it's the same argument as stable coin. Like in the same way that stable coin puts fiat currency like the US dollar on the blockchain, tokenizing stocks puts US stocks in the blockchain, and there's several benefits. In the US, It's really about twenty four to seven trading.
It's about lower settlement times and the DeFi interoperability, the fact that if your broker has an outage, you can take your stocks to another provider and it's much more robust experience because you have control and access to your assets as long as the blockchain is up, and you know, blockchains have proved to be generally quite robust. But then there's the international component where you know, billions of people right now overseas don't even have access to these assets.
And you know stable cooin did that for dollars. It was hard to get dollars if you were in Latin America or you know even in even in Asia. And now with stable coins, because those customers have been onboarded a crypto wallets, they can get exposure to stable coin, and particularly in markets where the local currency has devalued very rapidly, you know, dollar stable coins have become the best vehicle to get that type of exposure. And I
think the same is true for token is stocks. They're going to want exposure to the higher appreciation of these companies. I mean, everyone's heard of the great American companies that Tesla's Amazons Meta Nvidia and you know, yeah, it's humbling to even be mentioned in that category for sure, But I think the rest of the world is interested in the American market. It's increasingly a global market, and so that product as a delivery system to US equities, I think will work very well.
And with these new on rams being built, do you expect tons of liquidity to come in and evaluations of the SMP five hundred and NAZAC to go even higher than we've ever seen it. Even the individual stock. So let's say Tesla, A lot of people are bullish on that and are like they're seeing what Elon's doing, and then you have people from around the globe that can now on ramp. It seems like this truly global market and tons of liquidity that can come in.
I think that if the number of startups and different opportunities stayed the same, you would expect that to happen, right, greater demand for the same amount of supply. But I think one of the other benefits of tokenization is that assets that typically have not been liquid or tradeable or even accessible, like private stocks like real estate. You know, these are attractive assets. A lot of people want to get their hands on real estate exposure, private stock exposure,
and it's very difficult right now. So we expect the supply to increase too, and not just the demand. So you'll have more global money chasing these instruments, but the number of instruments will continue to increase.
Now part of the announcement with launching tokenized stocks and
¶ Blockhain on Arbitrum
so forth, I believe it's Arbitrum that you're using that blockchain.
Are you planning to use We're building our own, but it's using the Arbitram stack.
Are you planning to integrate other blockchains have some interoperability among the maybe the top chains and things like that.
Yeah, I mean, right now it's still early. We're focused on our own chain, but over time, I think we'll have to as it gets up and running and interoperability becomes more of a desired feature, we'll have to focus on bridging and those types of technologies, or at least sponsoring, endorsing, helping out other companies that want to build these bridging technologies. I think the great thing about it is so much of this stuff is open source, and you really have
like community development of these public protocols. It's really public infrastructure, right, I mean, we don't drive ethereum development. We probably could make suggestions, but ultimately we don't drive arbitrum development either. And the goal would be, like over time the Robinhood chain to be the best chain for real world assets and to have a vibrant open source ecosystem and a vibrant developer ecosystem around it.
So is your vision for that chain to be public or will it be permissioned?
Division? Is for it to be public? Yeah, full DeFi access.
That's great. I love that. And then some of your
¶ Crypto services
other crypto initiatives. Obviously you have full crypto trading and you added staking. Tell us a bit about that.
Yeah, So in the US we have Staking, which has been off to a fast start. In the first month since we've rolled it out for Ethan Soul, we have about seven hundred and fifty million in steak dassets, which is actually significant percentage. Now we've looked if you look at Europe where we launched Staking earlier, much higher percentage.
Over half of our assets are staked, and we think over time, as we get more and more, as the word gets out that we have this offer, you should see the steak dassets increase even further and I think it's good for customers. Obviously they get the yield, but they also want to be a part of something bigger, and they really it resonates with them to actually be contributing to maintaining the networks that they're holding these assets in, so that's been good. We launched a bunch of other
stuff besides tokenized besides stock tokens. In the EU, for example, Perpetual Futures was announced to great fanfare, so people very excited about about Perpetual Futures. I think the UI is really nice there and we're looking to bring that to the US pending some regulatory clarity there. We have the credit card, which has been very popular, and we're adding a crypto value prop so customers can directly invest in
crypto through their rewards, which will be very cool. And yeah, I think I think the other thing is private markets. We're really working hard. We heard a lot of demand from our event, not just for private market exposure in Europe, which we demonstrated with the open AI and SpaceX giveaway,
but also in the US. We had over twenty five million people watch our livestream event, and a lot of those were in the US, so there's a lot of interest in getting private markets exposure, and we think there's a path to making that possible here, and it might not be tokenized at the onset, but you know, we want to use whatever technology and regular toy structure is available to give our customers the best experience.
On the staking front. This may be a hard question to answer, but you know, right now, banks don't give
¶ Staking yield
you any type of interest, right and folks are in a hunt for yield. Do you think that there may be this kind of black hole where crypto sucks in a lot of people are moving their money into ether or soul to steak, to earn that high yield and earn that passive reward.
I think that more and more people are getting interested in staking they hear about it. I mean Robinhood's mass market product. So I think as people see the yield that they're getting and kind of share the concept with their friends, I think it'll be hard to maintain control of assets on a centralized platform, particularly unless you're giving some exposure to that yield. I don't see it necessarily competing with cash fields because people tend to think of
these products very differently. Cash is like a you know, secure investment that holds its value. Cryptos, even the layer one chains, tend to be a little bit more volatile. So I think the better analogy is probably to a stock. People think of it similarly to stocks, and like there are analogies to earning yield on stocks, like securities lending for instance.
Right, so, Vlad, it's twenty thirty, it's crypto the biggest
¶ Crypto business in 2030
part of your business as far as revenue or do you think it's on par with the equities market.
I think it depends on how you measure crypto. So if crypto includes tokenization of real world assets like stocks, I think that could grow rather large. I think at the end of the day, though, the majority of investment will be in assets that have fundamental utility, so real things, whether it's real estate, a private credit, private equity, public stocks, or you know, things like art or collectibles even uh,
I think that should remain the majority and so. But but if those are tokenized, then you can you can probably categorize that as crypto revenue.
Interesting, Yeah, if it's bucketed that way, Yeah, that makes sense. Us d G the stable coin Consortium. Why not launch
¶ USDG Stablecoin
your own stable coin? Why be part of this consortium.
Yeah, I mean, uh, one one thing that we think is going to be a little bit easier with a consortium is getting other companies to be on board and using our stable coin as a first class citizen. Yeah, because if you think about it, if I was offering you, as you know, a crypto exchange or wallet operator robinhood coin, your first reaction might be why would I have robinhood coin on my platform and why would I endorse that?
But if it's something that's collectively owned, then I think that could be very very powerful if you could benefit from robinhood being part of your network without it being you know, termed a robinhood coin. And I think the thing that we really liked about us d G, which you know is unique relative to how other stable coin consortiums like Circle have been set up, is the participants get to control the rewards in the yield and distribute
it accordingly. So if we bring more dollars into the network, admit more us DG, we get a disproportionate amount of the awards based on what we bring. And so I believe it has the benefits of our own stable coin with with sort of like limited downsides and I think the great thing about it is, you know, we continue to support you as d C, will support whatever stable
coin customers want. But yeah, us d G, I think has we think has a nice structure as a consortium where we get the benefits of having our own coin and limited limited downsides.
That absolutely makes sense. And then in addition to the distribution, having you and other well known companies trusted brands being part of that consortium, I would trust that more as a consumer and a user versus let's say a startup stable coin that no one is really backing. It's out there, but I'm going to go with a trusted brand that I know.
And I also think that, you know, one of the other criticisms of being in a consortium historically has been that you don't really have as much control over the product development. And you know, we we do tend to want to have a lot of control into what the end user is experiences. But for a stable coin, there's
just limited degrees of freedom. The thing has to work, it has to be backed by dollars, it has to have some mechanism to generate yield, and if enough of that is flexible, we feel like, you know, we're good with the development. We don't think that there's going to be a huge downside to not steering that directly.
With the Genius Act that recently got passed into a law to stave of aquin legislation. What do you think that means for dollar adoption, dollar dominance, and just more people using digital money.
I mean, I think what the more powerful thing about the Genius Bill is it's a demonstration that the US has not just the will but also the capability of getting crypto legislation passed. So it was like a warm up. I think the securities legislation through clarity is going to be much more, much more meaningful. And also getting real world asset tokenization set up in a coherent regulatory framework that's on shore UH is going to be a big thing as well.
The Market Structure Bill David Sachs said they should send it,
¶ Clarity Act
should have that pass in September. That's the meat and potatoes. It covers a lot of different aspects of the crypto market. If that gets past, what does that mean for Robinhood and its crypto business.
I think there will be there will be much more clarity on what assets should be CFTC regulated versus SEC regulated uh, and also what the mechanism is from jumping from one regime to the to the other. And of course we run both kinds of businesses right our brokers are SEC regulated. We've got a futures commissions merchant which is our traditional futures business, but also predict markets that's
CFTC regulated. And of course our current crypto business, which is state by state, which I think is not ideal. I think state by state increases complexity and cost, and for something like crypto, there really should be a federal framework that unifies, sort of like the patchwork of regulations. So I think too early to be seen, the final
draft may look different than what's out there now. But if we get a comprehensive federal framework and also listing standards clarity for lack of a better word, I think that should make it a lot easier to operate going forward.
¶ Future of markets
So glad we have this soup of new technologies tokenization, DeFi, stable coins, and everyone's pretty much online now right. The infrastructure of the internet has gone global. Everyone has a smartphone for the most part. What does the future of markets look like? Is it kind of madness? Like we're staying up till four am trading or maybe not. Maybe we just have more accessibility to assets and can better our lives and can participate in the markets. There's more democratization.
I think there's a lot of trends that are sort of like hitting at the same time. One that I think is going to be a big one that we haven't talked about much as the Great Wealth Transfer. So one hundred and twenty four trillion, I think is the last number I saw of assets going from silent generation
and Baby boomers down to younger generations. And you know, this is money moving from people that primarily did their financial services in person at branches to younger people that are much more digitally native that prefer to do their financial services from their smartphone at home. And I think that that's going to change a lot of things for the better. I think obviously costs will be lower, You'll get a lot more direct participation in these companies, which
I think is a big thing. I think we've gotten very abstracted over the past few decades as more and more of the money has been going into funds, you know, pension funds, different things they're investing the money on behalf of like large pools of capital. We've sort of moved away from buying a company because you believe that company will do well. The dominant thing is like, what's the sector doing, what's the macro doing? Where do tariffs stand?
And less of like, Okay, this company's earnings I believe are going to be higher in the future than now by this much, and so I'll buy it. And I think we're seeing a positive We're going to see a positive reversion to direct investment, which I think is good. You have AI driven disruption, which I think is going to be a big thing, and I think self directed
is going to be an increasingly big thing. I think customers are going to be self directing a greater percentage of their finances and their lives.
So you're saying the RIA and wealth management business is gonna reduce significantly.
I think the RIA business is likely to increase, but I think the RIA relationship to customers will change fundamentally. And actually we have we made a great acquisition of a company called trade PMR, which is an RIA custody platform. I think you should think of the RIA as I think in the future we'll have more entrepreneurs And if you think about the Robinhood customer as many of them are. As an entrepreneur, your RIA should be your CFO. So historically the RIA has been like, leave this to me.
I know what's best for you, you know. And I think I think there'll be a trusted advisor. They'll be able to help you with a lot more of your needs, but ultimately they'll be there to help you achieve your goals. So I think the relationship will shift to a much more client friendly one. And I think also arias will be able to serve many more clients because they're going to be earlier adopters of this technology as well.
I'll give it a bit of an anecdotal story just personally. My wife and I we have a registered investment advisor in one of the big firms. I'll name it Edward Jones. Yes, we have a trad fy account, but they couldn't touch crypto. But I was the risk taker in my family investing in bitcoin in the early days, eth and so forth. That portfolio has grown significantly more than the trad FI portfolio. Yeah, and now when I speak to my ARIA, he's like,
how's your crypto portfolio doing? Because you can't touch it? Yet. But yeah, it's just funny that.
They're telling you that they're working on it. Yes, they're like, oh yeah, of course, yeah, it's so funny. And the transition that's happening. I eventually they'll get there. A lot of the Wall Street firms launching their own et aps and things like that.
You know, what are your thoughts on how trad fi
¶ TradFi embracing crypto
And I would include robinhood in there. I think you guys have been the disruptor of trad fi. But a lot of these firms launching tokenize money market funds, etaps and much more.
I think they're talking about it, but there's been a lot of words and very little action in the form of products that see the light of day and you can actually use. Yeah, I mean, most of the tokenization initiatives have been on private blockchains where you don't actually get the benefit of tokenization, so it sort of like
works slightly less well than non tokenized equivalents. And I think it's what happens when you have these large companies that have an established business that they're really afraid to touch, and so by design they kind of create these sandboxes and think tags and research labs. If people over here but it never makes its way into the full product.
This is a hard question to ask or if they probably answer, and it's probably been controversial. With the rise of platforms like Robinhood and this technology where people going to have ownership do their own investing, so to speak, with AI agents supporting them, are we going to see the reduction of power of Wall Street bangs and the Goldman sacks and so forth, that they're not going to have the same amount of power and capital they've had historically.
Yeah, I mean, I think that if you think about all of these trends, they're moving in the direction of greater individual power. I mean, the tools that you would have had to rely on an institution for in the past are now in your smartphone, and you know a lot of them are increasingly being offered in a self custody, permissionless way. And I think that's an enduring trend. It's going to be more individual for sure. Individuals will have
more power, whether institutions have less. I think demand depends on how far and how aggressively the overall PI grows, and I believe it'll grow quite significantly. So yeah, I see a world where the institutional market will also continue to grow. I think you'll see more assets on an absolute basis in institutional accounts, but individuals will become more powerful and will have more assets that are self directed.
And I think a lot of these individuals will also become institutions, and so the lines will will tend to blur between the two as well.
When you say these individuals will become institutions, do you mean that because they have, to your point, more access to data, trading, view, Bloomberg, terminal, things that were not accessible before. They can look at charts, they can understand what the feed is doing better because there's more knowledge out there on the Internet. They have their AI agents, they kind of.
Bul their AI agents, they have their own software, they have tools like Robinhood, which I think will help them. And then they'll manage money on behalf of others, right, And you know, you'll probably have an increase in one person hedge funds or one person rias or asset managers, which in all sense of the world, they look and feel like institutions, but it's not hundreds of people in an office. It's you know, one or two people that are just managing a large book of business.
Do you think they'll have to be licensed, or they can just do it with peer to peer type set up.
I think depending on what type of business they do and whether it's in the US or global, they'll they'll still have to get licensed, but you know, even that process can be streamlined. I think there's a big push now to like make it easier to get licensure, to at least clarify the process across a bunch of different fields of what it takes to get particular type of accreditation.
And you know, there's there's been We've gotten into a quagmire of regulations right that's become unsustainable to even parse. And I guess there's one of two solutions. One is we delete a whole bunch of the ones that don't make sense and streamline it. The other is we just like use AI to manage it for us and simplify it and interpret it. And I think one of those two definitely will happen, possibly a little bit of both.
On that note, do you think the accreditation laws need to be updated given how markets are situated?
Yes, yeah, the accreditation laws don't make any sense in the current market. I mean two reasons, right, One is you can invest in any meme coin that's like easy accessible. You can invest an unlimited amount of your capital and any meme coin and that's fully legal. But SpaceX and open ai is viewed as too risky. And historically the accreditation laws were intended to make up for a information gap, right, and the thinking was, there's not very much information. These
companies aren't publishing reports or really much of anything. And if you have, you know, a million dollars in net worth or certain threshold of annual income, you could hire a person for you to like make sense of this, a professional to make sure you know you're just making reasonable decisions. I think nowadays there's lots more information, right. You have all sorts of information on social media, the Internet,
probably more than most people would care to read. We have AI models that are getting smarter that can probably replicate the functions of most of the advisors you would have been able to hire in the eighties, right, at lower cost and also make sense of the information. And you juxtapose that against the current public company climate, where it's gotten easier for a private company to raise capital
from institutional investors in the private markets. Simultaneously the costs and like the process complexity of going public has increased. So all of this has created a perfect storm where retail investors can get exposure to some of these AI companies that are shaping the future, and the incentives are kind of all simultaneously aligned to make that more difficult
rather than rather than easier. So I think we have to start chipping away at it, and the accreditation laws need to be reformed for sure, And actually there's a lot of support for this. I think there's a good chance it'll happen.
Yeah. Absolutely. You mentioned meme coins. I have a love
¶ Meme coins
hate relationship with meme coins. I don't believe in banning them. I believe in the frame market, right, but there are some platforms that take advantage of people doing these things. Do you feel there needs to be some guardrails in place that, Yes, you could take your money and go invest in meme coins like you do at the casino, you go to Vegas, right, throw it on black on the roulette table, whatever, but there needs to be some guardrails to protect people here.
I'm not sure if we need additional guardrails. I mean, I'm a firm believer that people should people should have freedom to do what they want with their money, and it's hard. And any time that you create guardrails and they're applied without really an understanding what the costs are, you make it difficult for I think the vast majority of people that know what they're doing. So some guardrails, for sure, are necessary. But do we need more than
we have now? I'm not sure. And you kind of also juxtapose that with it's getting easier across the board to spend your money, right, And I think increasingly the way I've always looked at Robinhood is we're not really you know, our main competitor isn't really the traditional brokerages because most of our customers have Robbinhood accounts and they don't really think about traditional brokerage accounts, even though we're
pulling assets from them at an increasing rate. But a lot of these customers would otherwise not be investing, they'd be spending that money. And so I see us competing for like the spending bucket, right, and I think the spending bucket is formidable competition. So if you make it harder to invest in any way without making it harder to spend, more and more of those assets will just
be consumed in sort of like discretionary expenditure. People will be buying more you know, entertainment, They'll be subscribing to more streaming services, They'll be buying more trinkets on Amazon. So yeah, hard for me to sort of like call for more restrictions on the investing side when I know there's so many ways that you can spend your money to ill effect too.
And on that note, would entertainment and the movement of tokenization,
¶ Tokenized rewards
do you see brands launching tokens like Starbucks. It's a reward token, but it also trades in the open market. A sports team, the New York Knicks. We're in New York. They have a token. You hold that token, you get benefits, but you can also trade it using in DeFi Taylor Swift has our own economy. She creates a token, and we're interacting in that way from a token.
Perspective, that's an interesting question. I think that that technology has been possible for some time, and not so many people have sort of like adopted that and created brand tokens even though it's been possible. I mean, you had some things like I think the NBA did something a couple of years ago. I forget what it's called. Yeah, they did like their their NFT collection that had a
moment for a bit. There was one interesting use case of an NFT where someone was like selling advertiser time, so each NFT represented like a minute of advertising time on a popular podcast. But yeah, it almost It feels like either the right combination of factors haven't come into into play, or the products just aren't good enough to make to make a compelling product there, so I would like to think. So I'm surprised it hasn't been happening more.
I think also creators don't really want to think about crypto. You know, when they start thinking too much about crypto, you get a little bit the adverse selection of I want to I'm getting into this because I want to make money quickly, which which I think is the danger.
I think the crypto technology aspect of it has to disappear, and it's just it just needs to be better ways to do the things that they want to do anyway, like communicate with their fans, reward their fans, you know, give access to their music or catalogs, and there you're actually competing with things like Spotify. You're competing with you know, credit cards, their websites, which have you know, their social
media followings. So I think there needs to be a non crypto specific need that's met better with crypto technology.
Yeah, I agree with you. I think presenting it as crypto turns off a lot of people because of headlines they've read things that have happened in the early phase of the market and technology. But if you say, here is a reward token, it's very different from the traditional reward model. It's in a self hosted wallet. If you keep holding it over time, maybe you earn rewards like staking rewards so to speak. You can also sell it
on the open market. There's a financial value and that can drive the incentive because before it's just oh, here's this reward token. I'll use it maybe when I want to. But if there's a financial incentive of in the open market it's valued at something, it can grow in value. Maybe that's a key.
Yeah, that's an interesting idea.
Oh, not a bad one. You'll give me credit, right, glad.
If you guys do, maybe I can collaborate on bringing something like that. We can we can work with you on a reward token on the run hood chain.
I would love that that'd be great as a user, I would love that, or glad, I know we're coming up on time. So it's twenty thirty. What does Robinhood look like.
Well, that's not a very long time from now. Yeah, I mean, I think if you look at our five year plan, Robinhood should basically be your financial super app of choice if you're in the US, so you should be able to get your check into Robinhood. I think people will still have paychecks in twenty thirty. Some might disagree with me. I don't know. Your paycheck will be
on Robinhood. You're checking in savings will be on Robinhood getting a great rate, and by the way, Robinhood banking coming out soon, you'll be able to do all of your spending through Robinhood cards. I still think credit cards will be the dominant way that you spend money in twenty thirty stable coined People might disagree, but I'd be surprised if the credit card is unseeded as an instrument
in the US by that time. And of course you're investing your retirement portfolio and your discretionary portfolio, which includes your crypto, should be well served at Robinhood as well. And I think if we do that, we can help manage your financial life, and we can sort of like be this family office. The same service worth individual can get from their family office should be available to the mass market at very very low cost. So all of your financial stuff should be run smoothly with you being
in control. And I think that positions us well to benefit from this great wealth transfer of one hundred and twenty four trillion in assets, which is going to be accelerating over time. And I think there's no reason why a significant percentage of those assets can't be custodied at Robinhood. I think we should be the primary beneficiary as a company of that wealth transfer, and that should accrue to our end user in the form of lower costs and better products.
I love it. I'm looking forward to all of those things you mentioned. Some wrap up questions. If you never
¶ What Vlad would be doing if Robinhood was not founded
founded Robinhood, what do you think you might be doing.
Well. I was on a path to be a mathematics professor, so I dropped out of my math PhD as a first year. After my first year, started my first company, which was a hedge fund in New York actually, and then that one ended up not being very successful. It was kind of a quick failure, pivoted to an enterprise software company again in finance, and then you know, ended up starting Robinhood. But I like figuring things out. I like having lots and lots of impact, and I liked
wrestling with the big questions. So probably something to do with math or physics.
Sure, some rapid fire questions. Favorite food, pizza, favorite musician
¶ Wrap up questions
or band Pink Floyd, favorite.
Movie pulp fiction, favorite book brief History of Time?
And when you're not working at Robinhood, what are you doing for fun?
I like to work out. I like to go for drives. I have a family, so I like to hang out with my kids watching movies or building legos or sometimes even changing diapers. They do enjoy that. Yeah, And you know, honestly, not much free time exists. It's like my sleep time is very limited. Actually, it's like I have so little free time that sleep is like three to four hours a night, no way pretty much? Yeah, wow, sometimes less.
Oh man, Well, you're a busy individual, and I thank you so much for taking time to do this. I really appreciate it.
Yeah, thank you so much. It was a lot of fun.