|From: Glenn Petersen||9/22/2021 9:42:13 AM|
|Robinhood to launch cryptocurrency wallets as bitcoin becomes a bigger part of business|
PUBLISHED WED, SEP 22 20219:00 AM EDT
UPDATED 21 MIN AGO
Maggie Fitzgerald @MKMFITZGERALD
Kate Rooney @KR00NEY
-- Robinhood is testing “crypto wallets” with select clients next month to allow investors to send, receive and move cryptocurrencies in and out of the Robinhood app.
-- In recent months, some users have taken to social media to complain that by using Robinhood, they had exposure to crypto prices but not actual ownership of the coins themselves.
-- The move comes as cryptocurrency makes up an increasingly large part of Robinhood’s revenue.
Robinhood is debuting a feature that gives traders more control over digital tokens in its latest expansion in the cryptocurrency space.
The newly public brokerage is testing “crypto wallets” with select clients next month, the company announced in a blog post Wednesday. The so-called wallet will allow investors to trade, send and receive digital currencies, as well as move them in and out of the Robinhood app.
In recent months, some users — particularly Dogecoin traders — have taken to social media to complain that by using Robinhood as their broker, they had exposure to crypto prices but not actual ownership of the coins themselves.
“We’re not first to the market — we’ve been taking our time to make sure that we build this in a phased approach,” Robinhood’s chief product officer Aparna Chennapragada told CNBC in a phone interview. “We’ll have a few customers come in, iterate on the product, get the customer feedback and then expand from there.”
Certain clients will begin testing the product and Robinhood will share their feedback over its blog and Twitter, said Chennapragada, who spent 12 years at Google leading product, engineering and design teams before joining Robinhood. The rollout will eventually allow clients on a waitlist to join.
Robinhood’s growing crypto business
The start-up debuted cryptocurrency trading three years ago but it has become increasingly important to the company’s top line. Last quarter, more than half of Robinhood’s transaction-based revenue came from cryptocurrency trading, up from just 3% a year earlier.
The new wallets will let clients to consolidate their digital coins into one account. Clients can then trade, send and receive cryptocurrencies to and from other wallet addresses. Rivals Coinbase and Gemini already offer this feature. Bloomberg News first reported Robinhood’s plan to roll out this feature in a beta version of the trading app.
Bitcoin and other cryptocurrencies have seen sharp volatility since bitcoin’s all-time high in April amid more concerns about regulation.
Cryptocurrencies took a dive alongside the broader market on Monday, with bitcoin ending the day about 7% lower. The slide resurfaced the debate about whether bitcoin can or should serve as a safe-haven asset. In more recent years, bitcoin has shown more of a tendency to dip with the broader markets.
Robinhood also said a new feature that allows the set-up of recurring crypto investments is live on the app on Wednesday. Clients can schedule a crypto purchase, commission free, for as low as $1.
The broker’s move comes as cryptocurrencies are under more scrutiny from the Securities and Exchange Commission, particularly Chairman Gary Gensler. Last week, Gensler assured lawmakers that Wall Street’s top regulator is working overtime to create a set of rules to oversee the volatile cryptocurrency markets, while balancing the interests of American innovators.
“Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending,” Gensler said in prepared remarks to the Senate Banking Committee. “Frankly, at this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted.”
Robinhood said the crypto wallets will have several safety features including identity verification, multi-factor authentication, and email and phone verification to keep coins safe from hackers.
“We are completely aligned with our regulators and the SEC to make sure that we are working on this with educational tools, with protection with safety. That’s great for customers that’s great for us,” Chennapragada said.
Shares of Robinhood ticked 2% higher in premarket trading on Wednesday.
Robinhood to launch cryptocurrency wallets as bitcoin becomes a bigger part of business (cnbc.com)
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|From: Glenn Petersen||9/22/2021 5:39:39 PM|
|The Fed is evaluating whether to launch a digital currency and in what form, Powell says|
PUBLISHED WED, SEP 22 20213:25 PM EDT
UPDATED AN HOUR AGO
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
The Federal Reserve is pushing ahead with its study into whether to implement its own digital currency and will be releasing a paper on the issue shortly, Chairman Jerome Powell said Wednesday.
No decision has been made on the matter yet, he added, and said the Fed does not feel pressured to do something quickly as other nations move forward with their own projects.
“I think it’s important that we get to a place where we can make an informed decision about this and do so expeditiously,” Powell said at his post-meeting news conference. “I don’t think we’re behind. I think it’s more important to do this right than to do it fast.”
Powell added that the Fed is “working proactively to evaluate whether to issue a CBDC, and if so in what form.”
Establishing a digital dollar has been for more than a year, and it announced in May it would launch a deeper examination into the issue with a paper to follow.
The Boston Fed has taken point on the project, joining with MIT in an initiative on whether the central bank should establish its own digital coin targeted at making the payments system more effective. Fed Governor Lael Brainard has been a strong advocate of the effort, though several other officials, including Vice Chair for Supervision Randal Quarles, have cast doubts.
Advocates such as Brainard say a central bank digital currency’s benefits include getting payments quickly to people in times of crisis and also providing services to the unbanked.
“We think it’s really important that the central bank maintain a stable currency and payments system for the public’s benefit. That’s one of our jobs,” he said. He noted the “transformational innovation” in the area of digital payments and said the Fed is continuing to do work on the matter, including its own FedNow system expected to go online in 2023.
The test for a CBDC, he said, is “are there clear and tangible benefits that outweigh any costs and risks.”
However, a larger drumbeat has been building as central banks, most notably China, have moved forth with their own plans and begun the first stages of implementation.
Some concerns even have been raised that if the Fed does not act more aggressively, the dollar’s position as the global reserve currency could be challenged.
Powell noted the dollar’s position in the world and said the Fed is “in a good place” to make a decision on whether to implement its own digital currency. He expressed some concern about the regulatory landscape and said the Fed likely will need congressional permission should it decide to proceed.
“Where the public’s money is concerned, we need to make sure that appropriate regulatory protections are in place, and today there really are not in some cases,” Powell said.
The Fed is evaluating whether to launch a digital currency and in what form, Powell says (cnbc.com)
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