Robinhood lists USDC as first stablecoin on trading platform

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Popular stock trading app Robinhood has listed Circle USD coin (USDC) earlier today, the first stablecoin accessible to retail traders on its platform.

Robinhood first opened the door to crypto trading on its platform in 2018. Over time, it has steadily added tokens. As of this writing, there are currently 17 different cryptocurrencies that users can trade using Robinhood’s app with the addition of USDC.

The move signals an increased focus on crypto trading under Robinhood’s business model.

At his most recent earnings call, Robinhood’s Head of Investor Relations Chris Koegel identified crypto trading as one of the company’s top three goals, along with brokerage and money services.

“Our vision with crypto is to be the most trusted platform for clients to invest in crypto as well as the most trusted on-ramp to the decentralized web,” Koegel said, according to the firm. note about earnings. “Customers tell us they want us to introduce more coins to the platform.”

However, it’s unclear how the addition of Circle’s stablecoin, whose price is pegged to the value of the dollar, might conflict with Robinhood’s reliance on payment order flow to make money.

Robinhood, order flow and stablecoins

The company makes the majority of its revenue by routing orders to market makers like Citadel Securities, which pays Robinhood to get information about people’s incoming trade orders.

According to his last 10-Q Ranking with the SEC, 68% of the company’s revenue comes from order flow payments. The practice has been criticized by some lawmakers, including SEC Chairman Gary Gensler, as potentially unfair to retail traders due to conflicts of interest between market makers and brokerages.

However, the business model allows Robinhood to offer commission-free trading to investors who use their platform, which many take advantage of as a benefit. But this comes at the expense of fractions of pennies gleaned from every transaction made by retail traders.

The company received $420 million from order flow payment in the last fiscal quarter, of which $112 million came from users trading crypto, according to Robinhood’s Filing with the SEC.

That’s more than he received from people trading stocks on his $65 million platform, but less than those $240 million trading options.

USD Coin is currently one of the largest stablecoins by market capitalization, with a total value of $50.1 billion, according to CoinGecko. Over time, its price has fluctuated slightly, reaching a high of $1.01 and a low of $0.995 over the past week.

The only other stablecoin with a larger market cap is Tether, which launched four years before USD Coin in 2014. Tether’s current market cap is $68 billion, but it has been losing ground against USD Coin since the collapse of Terra’s algorithmic stablecoin, UST.

A Robinhood spokesperson said Decrypt the company’s CTO and Managing Director of Robinhood Crypto, Jean Kerbrat will provide additional context regarding registration for Circle’s Converge22 conference in San Francisco next week.

The spokesperson said he could not provide any additional comment at this time.

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