Robinhood set to roll out crypto wallet to all users in 2022

Christine Brown, Robinhood Crypto COO, on how crypto wallets will help move the needle for the company.

Video Transcript

ZACK GUZMAN: Welcome back to "Yahoo Finance Live." Today's Crypto Corner, a big update that has been long awaited by a lot of Robinhood's customers, particularly those who are crypto interested, the company announcing it's going to be rolling out crypto wallets for its customers here. And for more on that initiative, happy to have Robinhood Crypto COO joining us today, Christine Brown, alongside Yahoo Finance's David Hollerith on with us as well. And Kristine, I mean, this is something that you've joked about on Twitter everybody's kind of been asking, when are these wallets coming, when are they coming? You've been talking about the timeline for a bit here. But talk to me about what it unlocks for customers out there and how it makes Robinhood a real player in the crypto space.

CHRISTINE BROWN: Yeah, when wallets? Well, soon. We are announcing today that we are opening up wallet access to a handful of Alpha customers, as well as launching a wait list for people to sign up and roll off and get wallet access in late 2021 and early 2022. What this really unlocks for our customers is, right now, our product. You can come to Robinhood. You can buy, hold, and sell crypto. Now you'll be able to deposit and withdraw. So when you buy that crypto, you can actually move it off platform and use it a little bit more like a currency, right? You have some utility to it.

If there's that NFT that you're looking for, you can move it off platform and buy it, you know, that cup of coffee that-- you know, your favorite vendor accepts Bitcoin, you'll be able to do that off of Robinhood's product. You can also consolidate all of your assets on Robinhood, which we think will be a great thing for customers because we do offer commission free trading, which gets a great pricing for a lot of folks who are trying to get into the market.

DAVID HOLLERITH: Yeah, Christine, could you talk a little bit more about the safety features of the wallet? I was sort of curious about those details.

CHRISTINE BROWN: Yeah, and this is something that we took our time with. I know a lot of people have wanted us to release these with a lot of quickness. But the top priority for us is safety first. And we want to make sure that users who are potentially transacting on chain for the first time really understand the permanence and the instantaneous of that action. And so some of the things that we've been thinking about not only kind of giving an educational piece and component in the experience itself, but building safety tools like MFA-- multi-factor authentication-- so that when your crypto moves, we can actually tell that it is you who is moving it.

ZACK GUZMAN: Yeah, that's been the interesting thing to watch, you know, especially in a year that it's attracted a lot of new crypto people out there who might not even understand what wallets are. You know, my mom bought Dogecoin on Robinhood, full disclosure. But when you look at maybe the breakdown here of what it unlocks, how many of those people you think are going to be using it because, you know, to your point, it's become a pretty important piece of revenue for Robinhood, $233 million in the last quarter, up from $5 million in Q2 2020. So, I mean, it's exploded in terms of people using the platform. But really, when they look at the expectations for using the wallets as their intended, what are you expecting for uptake there?

CHRISTINE BROWN: We really expect our customers to use it in both directions, both depositing and withdrawing. You know, withdrawing allows them to actually take their crypto into a broader ecosystem. And we think it's actually going to bring a broader group of investors, a more retail customer into what has kind of been known to be crypto native and kind of expand that ecosystem even more. We also think this provides the opportunity for customers to come and get access to a market with no commissions, right? Although many of the traditional brokers followed Robinhood's lead a few years ago and reduced their trading platforms to zero commissions, not all of the crypto kind of marketplaces followed. So we think that that's going to be a competitive edge that we'll see a lot of customers come in as well.

ZACK GUZMAN: The other thing too, I mean, we've talked about this trade off between security and really getting this right. And I think that's the reasons you're pointing to in terms of the delay. But in adding projects, I think you guys have seven, right, available for trading here as you roll out wallets. You look at Coinbase, they have close to 100 I think. And that's kind of been the question there. It took them a while, Coinbase, to add Dogecoin to the platform. We saw a lot of other people doing it. It obviously adds a lot of users.

So I guess there's a question there in the crypto community about the trade off between security and timing some of these projects just to add users and then revenue to the platform. So how does Robinhood maybe look at that as the timeline to expand beyond just the seven, eight you have now.

CHRISTINE BROWN: Right, and by allowing deposits on our platform, right, the goal is that you have one central place where you can keep your coins. Now if you have more than the seven coins that we currently offer, you know, we won't be able to fulfill that today. So we are looking at expanding our offering, including even more coins, so we can be the one-stop shop for crypto customers

DAVID HOLLERITH: Yeah, and, Kristine, I wanted to ask a side note sort of on Robinhood's crypto customers. I know I've heard that there's been sort of an uptick of women crypto traders. I don't know if you could tell me more about that.

CHRISTINE BROWN: Yeah, so in the last year, we've actually seen the number of women who trade crypto 7x on our platform. And two of every five active women on our platform are trading crypto. I think that's something that's, you know, I'm following very closely, given that I am a woman in crypto myself. But I think that traditionally, crypto has been the intersection of two, you know, kind of difficult areas to get into-- finance, which has kind of more historically seen a low adoption by women investors, and then tech, right, cutting edge tech, which is the crypto part of this.

And so when you combine those together, it's even more intimidating. There are even higher barriers to access and entry. And we think that our platform and how it's designed the educational tools and the ease of use make it something that is really appealing to a broader and more diverse group.

ZACK GUZMAN: I mean, this is something where you might see headlines now Robinhood is doubling or tripling down on crypto, but, you know, we've already seen in terms of the revenue. You guys were already pretty big in crypto. And now, I mean, I guess there is a question on whether or not this means Robinhood is going to increasingly be seen as pro crypto when it comes to maybe doing more than just adding wallets. You know, we've seen Coinbase talk about adding it to their balance sheet. We've seen other companies out there add crypto to the balance sheet. How serious is Robinhood when it comes to being kind of labeled a crypto company? Is that something that you might see Robinhood doing?

CHRISTINE BROWN: You might. I honestly, I think that we're pro-investor. So we want to be building products that our investors find valuable to manage and get into any market. And we started with equities, added options in crypto. I think that one of the benefits, and why we're seeing more and more people kind of come to our platform, is because we have all those things living side by side. It's approachable. It's understandable. So I think you're going to see more of that from us.

ZACK GUZMAN: Now, and Christine, thinking about all the sort of drama that is continually unfolding in Washington, as regulators sort of look to regulate the crypto sector and exchanges, I was curious, how does that affect Robinhood in terms of sort of your protocols. Obviously, you're still working, you're used to the equity markets though.

CHRISTINE BROWN: Yeah, Yeah. I would say that we're very early in the crypto space, right? When you look at the number of users who are holding crypto in the US alone, we've barely scratched the surface of providing access and getting people involved in these markets. So, yes, as that grows, as more people kind of enter in, there will undoubtedly be questions around additional regulation and exploring that. I think that honestly when Robinhood is building products, yes, we want to make sure we are meeting our regulatory obligations. But at the end of the day, I think we're really aligned with our regulators and our customers that we want to provide a great, easy, and safe experience. I think tax is a great example where crypto tax can be pretty opaque and confusing.

And there isn't like a regulatory obligation to actually have any specific tax reporting. But we heard from our customers early on when we launched our crypto product in 2018 that crypto taxes was something that they were really nervous about. So we've been generating 1099s since we first launched. So I think that's an example of where regulation and customer experience intersect. And we'll always come out on the side of making sure our customers have the best and safest possible experience.

ZACK GUZMAN: And regulators increasingly signaling that a lot of that is probably going to be required here in short order. But interesting to see it come out. When wallets soon and now sooner. Christine Brown, Robinhood crypto COO, I appreciate you coming on here to chat with us today alongside Yahoo Finance's David Hollerith as well. Thanks again for the time.