Key takeaways

• Blockchain technology has the potential to fundamentally improve traditional financial systems.
• The blockchain enables 24/7 trading and instant settlement of assets, unlike traditional stock trading.
• Robinhood is opting for an open developer ecosystem, contrasting with closed, siloed systems.
• Emerging markets offer substantial yields that DeFi has yet to access, presenting growth opportunities.
• BRX bridges DeFi with institutional-grade tokenization and real-world yields.
• Tokenized assets are expected to play a crucial role in the future of financial applications in crypto.
• Robinhood’s certification process ensures compliance with customer protection and regulatory requirements.
• The company aims to expand on-chain capabilities while allowing developers freedom to innovate.
• The launch of Robinhood’s main net is anticipated soon after developer feedback from hackathons.
• Different companies pursue various tokenization strategies, indicating diverse market implementations.
• Robinhood aims to disrupt the financial system by launching products that offer significant value.
• Innovation in tokenized assets is expected to return to the US with improved regulatory clarity.
• The liquidity problem in tokenized securities limits their use in DeFi, requiring strategic solutions.
• Robinhood connects to multiple market makers and exchanges to ensure the best crypto trading prices.
• The Clarity Act aims to create a uniform regulatory environment for crypto products across the US.

Guest intro

Johann Kerbrat is Senior Vice President and General Manager of Robinhood Crypto. Before joining Robinhood in 2021 as Chief Technology Officer, he served as VP of Engineering at Iron Fish, a privacy-focused Layer 1 blockchain project. Under his leadership, Robinhood Crypto has expanded with self-custody wallets, EU trading services, the Bitstamp acquisition, crypto staking, and tokenized US stocks and ETFs.

Blockchain’s potential to transform finance

• “Blockchain technology can fundamentally improve traditional financial systems.” – Johann Kerbrat
• Blockchain enables 24/7 trading and instant settlement of assets, unlike traditional systems.
• “It’s still not working twenty-four seven; it’s still not instant to buy a stock and to settle.” – Johann Kerbrat
• The technology can address limitations in current financial systems.
• Robinhood’s blockchain initiatives contrast with traditional closed systems.
• “It seems to be you guys are going down the other road which is more of an open developer ecosystem.” – Johann Kerbrat
• Emerging markets offer yields that DeFi cannot yet access, highlighting blockchain’s potential.
• “Emerging markets generated over a $115,000,000,000 in annual yield for investors.” – Johann Kerbrat

Robinhood’s strategic initiatives

• Robinhood is building an open developer ecosystem rather than a closed system.
• “It doesn’t really make a lot of sense to just build in our little corner.” – Johann Kerbrat
• The company is expanding its capabilities on-chain while allowing developer innovation.
• “Our goal is really to be able to expand what we are able to do on chain.” – Johann Kerbrat
• The certification process ensures compliance with customer protection and regulatory requirements.
• Robinhood aims to disrupt the financial system with innovative products.
• “Any product that we launch has been fairly disrupting the financial system.” – Johann Kerbrat
• Different tokenization strategies are being pursued, indicating diverse market implementations.

The role of BRX in bridging finance

• BRX connects DeFi with institutional-grade tokenization and real-world yields.
• “BRX does the heavy lifting so DeFi can finally access real collateral and structured products.” – Johann Kerbrat
• Tokenized assets will play a crucial role in future financial applications in crypto.
• “We are really big believers in tokenized assets.” – Johann Kerbrat
• The integration of traditional financial systems with DeFi is a significant development.
• BRX’s role highlights the potential for innovation in bridging finance.
• The platform offers real-time stablecoin settlement across jurisdictions.
• “BRX connects these worlds with institutional-grade tokenization.” – Johann Kerbrat

Regulatory clarity and its impact

• Innovation in tokenized assets is expected to return to the US with improved regulatory clarity.
• “A lot of the innovation that has been happening outside of the US is going to come back.” – Johann Kerbrat
• The Clarity Act aims to create a uniform regulatory environment for crypto products across the US.
• “It’s just setting up a level playing field for everybody.” – Johann Kerbrat
• The fragmented regulatory environment is frustrating for companies and customers.
• “Just because there are some disagreements at the political level, our customer cannot access all the products.” – Johann Kerbrat
• The Clarity Act will help stabilize the regulatory environment for stablecoins in the US.
• “This clarity act will kind of put us back in the game at the same level as other countries.” – Johann Kerbrat

Liquidity challenges in tokenized securities

• The liquidity problem in tokenized securities limits their use in DeFi.
• “The liquidity problem is pretty fundamental to anyone trying to put on-chain stocks and tokens.” – Johann Kerbrat
• Fragmentation of the market leads to fragmentation of liquidity.
• “With the fragmentation of the market, you’re going to have a fragmentation of liquidity.” – Johann Kerbrat
• Routing orders to the best available prices can navigate liquidity challenges.
• “To actually use that as an advantage to be able to route the orders to the best price available.” – Johann Kerbrat
• Robinhood connects to multiple market makers and exchanges to ensure the best crypto trading prices.
• “We connect to multiple market makers, multiple exchanges, and route to the best one.” – Johann Kerbrat

Robinhood’s approach to product development

• Robinhood’s strategic planning includes both short-term and long-term roadmaps for product development.
• “We always have a roadmap that is multi-years.” – Johann Kerbrat
• The company is actively pursuing mergers and acquisitions in the crypto space.
• “We do think a lot about M&A, and we’ve done some in crypto.” – Johann Kerbrat
• The focus should be on growing the overall market rather than competing for market share.
• “We should be more focused on growing the pie in general.” – Johann Kerbrat
• Robinhood’s wallet targets more advanced users who desire greater control over their assets.
• “They want the convenience of a full-service experience; they want to control the custodies.” – Johann Kerbrat

The importance of partnerships in crypto

• Long-term partnerships are critical in the crypto space due to the prevalence of scams and issues.
• “It’s especially important in crypto where so many things have been kind of staying with the scams.” – Johann Kerbrat
• Robinhood will likely integrate with Talos in the future to enhance their crypto offerings.
• “It’s something that they can absolutely do in the future.” – Johann Kerbrat
• Talos enables faster integration with market makers and exchanges, enhancing liquidity options.
• “Talos brings a platform that can allow us to do that faster.” – Johann Kerbrat
• The company is transitioning from a retail-only platform to also serve institutional clients.
• “Our goal with Bitstamp is not just to offer an exchange for retail customers.” – Johann Kerbrat

Regulatory challenges for perpetual contracts

• Perpetual contracts are not widely available in the US due to regulatory challenges.
• “Perpetual is not a product that’s really allowed in the US.” – Johann Kerbrat
• The CFTC’s new chair may lead to regulatory changes that could bring more trading volume back to US exchanges.
• “I’m hopeful that we’ll see something there because we’re seeing a lot of the volume going offshore.” – Johann Kerbrat
• Perpetual contracts are essential for the US to remain competitive in the crypto market.
• “Perps is going to be one of the reasons for that.” – Johann Kerbrat
• The focus should be on growing the market rather than competing for market share.
• “We should be more focused on growing the pie in general.” – Johann Kerbrat

Product diversity and customer outcomes

• It’s crucial to offer multiple options for products to ensure the best outcomes for customers.
• “It’s important for us to not have just one option.” – Johann Kerbrat
• Developers should refer to the published documentation to effectively build on the Robinhood test net.
• “They should look at the docs we have just published.” – Johann Kerbrat
• The Robinhood wallet provides users with control over their assets while maintaining a user-friendly interface.
• “You’re in control of the keys; you’re in control of what you’re doing.” – Johann Kerbrat
• The wallet targets more advanced users who desire greater control over their financial assets.
• “Some hardcore people want the convenience of a full-service experience.” – Johann Kerbrat