WSJ What’s News - Robinhood Goes All In on Crypto

Episode Date: July 13, 2025

 With President Trump eager to promote the U.S. as the “crypto capital of the world,” the industry has the wind at its back, and online brokerage Robinhood is racing to see how far a friendly regulatory environment can carry it. Robinhood CEO Vlad Tenev speaks to host Luke Vargas and WSJ markets reporter Caitlin McCabe about the company’s “tokenization” of a range of assets, building out an edgier product suite and pursuing a rapid global expansion as part of its CEO’s vision of crypto serving as the rails of the global financial system. Luke Vargas hosts. Further Reading:  Robinhood Goes All In on Crypto With Major Product Push  Robinhood Launches New Tools to Woo Traders  Businesses Are Bingeing on Crypto, Dialing Up the Market’s Risks  The Big Loser From the ‘Genius Act’ Is $156 Billion Crypto Giant Tether  More Men Are Addicted to the ‘Crack Cocaine’ of the Stock Market  Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey What's News listeners, it's Sunday, July 13th. I'm Luke Vargas for the Wall Street Journal and this is What's News Sunday, the show where we tackle the big questions about the biggest stories in the news by reaching out to our colleagues across the newsroom to help explain what's happening in our world. This week, with President Trump eager to promote the U.S. as the crypto capital of the world and the House Financial Services Committee in the coming days considering several bits of crypto regulation, the industry has the wind at its back and is racing to see how far a friendly regulatory environment can carry it.

Brokerage Robinhood is helping lead the charge as it pursues a rapid expansion into new markets and product areas as part of its CEO Vlad Tenev's vision of crypto serving as the rails of global finance. We'll discuss that vision and more. Without further ado, I want to introduce Robinhood CEO Vlad Tenev. Vlad, thank you so much for being with us on What's News. Much obliged. Thank you for having me. And over here on my side of the table, I'm joined by Wall Street Journal markets reporter Caitlin McCabe, who covers hedge funds now,

but before that reported on Robinhood and on individual investors. Caitlin, pleasure. Thank you for joining us. Thanks for having me. Vlad, I want to ask you about your individual investor clients, many of them young people. The median age of Robinhood users is 35. So many of them are younger than that. This is a generation already facing substantial debt burdens, feeling a lot of anxiety around money. And now enter artificial intelligence, the CEO of Anthropic in May predicting AI

could lead to half of all entry level jobs disappearing in one to five years. I I'm curious what you make of that for Robin Hood to succeed I'd imagine you would want young people's share of the financial pie to be growing but there's obviously some uncertainty there I think that's right. There there is a tremendous amount of uncertainty and I think traditionally there's been two elements for how someone can generate income. There's been your wages from your job and also your investments.

And for young people in particular, the wages have often been the dominant factor. But investments has been becoming more and more important over the past few years, in particular, I think in part due to Robinhood's influence in the space in the US. And I think with some of these things that you're talking about, AI disruption, it makes the role of investing early and often even more important. How can Robinhood remain profitable if younger generations remain financially strapped

and just have less money to invest in general? There will likely be more money to invest if less of the compensation is in wage form and more of it is investments that increases the likelihood that investing is a bigger and bigger part of your life. You got a preview of this during COVID when we had probably the largest period of, albeit temporary, job dislocation. And that coincided with some of the largest increases in individual retail investing we've ever seen in history. And a lot of those effects have been durable effects.

Are there policy supports young people are going to need or future generations are going to need in order to make up for the loss on the wage side of things? You're starting to see a little bit of that with the Invest America Act, which would be an investment account created for every child born in this country. So it's stipulated that it's a thousand dollars for all new children born, but

the private sector is coming in and we're retroactively fitting it into the 40 million or so children that are under the age of 10. So children that are under the age of 10. And I think that's the beginning of a defined contribution plan for the public sector. It's a way, I think, to test getting young people invested from an early stage could be the start of something much bigger. There has been a ton of growth and expansion at Robinhood. Can you talk about which products in particular we're meeting more active traders? Is it more of the edgier products, especially the ones that you've announced recently, tokenized shares of privately owned companies like SpaceX and OpenAI? You guys also have prediction markets or is

it more of those conventional products that can grow with users as they mature? Yeah, so active traders are customers that we consider to be at the high end of sophistication. They want to be at the frontier of innovation and technology and financial services. It's really the products that we have that aren't commonly found elsewhere, like 24-hour market, crypto trading, options trading. Robinhood Legend recently was our first desktop platform built from the ground up for the active trader audience. And then there's the long-term arc, which I consider our tenure arc. And I call that building the number one global financial ecosystem.

And that involves expanding the remit of the company across two linearly independent vectors, from retail only to business and institutional, and from U.S. only, or at least U.S. primary, to fully global. Tokenization is the big innovative one that we're paving the way towards, at least in the EU. one that we're paving the way towards, at least in the EU. And what that allows is for any asset, public, private, liquid, illiquid, to be put on a blockchain and attached to a liquid market and to be tradable 24-7, just like a crypto asset like Bitcoin.

You're owning the shares and folks are not exactly having a paper certificate, but getting dividends from having, I don't know, a tokenized version of a U.S. equity, say? They would get dividends. What's live right now in Europe is stock tokens, which we've tokenized over 200 of the biggest public companies and make them available via blockchain to European customers. And we did a giveaway. So the giveaway was of private companies,

more to demonstrate the power of technology. We did stock tokens of OpenAI and SpaceX. Those are not yet tradable, but it shows the full power and how generalizable this technology is, and we could adapt it. We have the technology already to tokenize pretty much anything. I wanna talk about the tokenization of SpaceX and OpenAI

because I think that's really interesting. And already you faced a bit of, maybe pushback is too strong a word, but some questions, firstly, OpenAI came out and said it was not involved in the endeavor. Then the Bank of Lithuania, which oversees Robinhood's activities in the EU has contacted Robinhood about the tokenization. What are your thoughts around the responses that you've gotten so far? It's not altogether unsurprising. What people forget is that it's a giveaway. So we're essentially giving people free stuff, but it's

uncomfortable to be the first. I can understand they feel, okay, like we're guinea pigs, we don't really know what this is, we want to run our companies and not have to worry about understanding tokenization. But also these companies are frontier companies that are representing a lot of forces and these companies are worth hundreds of billions and retail doesn't have access to it. So in the past few decades, I think we have the beginnings of what's, in my opinion, the biggest problem in capital markets, which is companies are less reliant on public markets to raise capital. They can basically raise infinite amounts of capital from private markets, from institutional investors. So the utility of the IPO and being public in general as a means of raising capital has diminished.

And at the same time, the level of difficulty, the hurdles, the sort of like annoyance factor of being public has increased. And what you have is some of the biggest companies are delaying or altogether abstaining from going public. And that's had the unfortunate side effect of leaving a lot of this appreciation that normally would have been taken advantage of by retail, everyday people. It's gone away. All right, we've got to take a very short break, but when we come back, we will pick up where we left off there and talk about the role of regulation in determining the future

of the crypto industry in the US in particular. Stay with us. No Frills delivers. Get groceries delivered to your door from No Frills with PC Express. Shop online and get $15 in PC optimum points on your first five orders.

Shop now at nofrills.ca. five orders shop now at no frails dot C.A. Before the break, we were talking about tokenizing stocks and some of the challenges that Robin Hood is contending with as it moves into that new area. Back in Robin Hood's early growth days, the company was encountering pushback, including from regulators, that it was gamifying the trading experience.

And it's a topic that had been on my mind recently, given the company's pivot into prediction markets, which allow users to bet on things like sports tournaments or a recent hot dog eating contest around July 4th. So let's pick up the interview on that. I was a pretty compulsive young person and I'm almost glad I didn't have that when I was in college and I had a small trading account. How do you balance, can we do this technically with, I don't know, should we be moving into a new area? I think there is this impression

that our customers are less sophisticated than they ultimately are. I think that part of it is driven by just narratives of extremes. It's not as interesting to talk about the person that's dollar cost averaging into a diversified portfolio of tech stocks. And it's more interesting to talk about the screenshot

that you see on Reddit of someone making a ton of money or losing it. So I think that's the reality that we have to contend with. We have 26 million customers in the US. That's like a large metropolis equivalent, right? And if you have a large metropolis, you see all kinds of behavior. And I think we do a really nice job of just making sure

that we offer our products to those that are suitable only. There's strict laws around all of this stuff that we have to adhere to while also just understanding the reality that we compete in a market with lots of competitors that want the same customer. They're offering them trading services and the customers want access to the best technology and they want access to all these tools that the high net worth and individual have had access to for a long time. We have to provide that in as easy and as safe a way as possible. So Vlad, if crypto really is the future of global finance, as you've said before, what

do you think is missing from the U.S. financial system right now to make that future possible. I see a world where crypto and traditional financial services fully merge. I think that it's not going to be too much longer that we have crypto over here on one side and traditional finance. Crypto itself is the next stage of the evolution of financial infrastructure. We started many decades ago with filing cabinet and paper, basically being the accounting systems. Then we went to mainframe, then we went to on-premise and cloud. And a lot of our big companies are actually

somewhere back there in the mainframe, maybe going to on-premiseland. And I think crypto is the next stage in that where a lot of the application logic that would otherwise be performed by companies. So think payment processors, transfer agents, even exchanges could now be performed by smart contracts or software code on a blockchain.

And the benefits are 24-7 access to markets, liquidity by tapping into a global network for assets that would normally be illiquid. And also when you have less intermediaries, less middlemen, less mouths to feed, the costs of operating a crypto business are around 10 times lower than a traditional business. And over time, what that means is the cost savings are going to be passed back in large part, I think, to customers in the form of better value, lower fees, better pricing. And so it's an inevitability that the two will merge and crypto will become the new substrate, the new foundation for the financial system. Regulatory clarity will help in the U.S.

As will just products that go beyond talking about these potential benefits and putting real benefits into the hands of customers. My final question. A lot of investors are still wary. into the hands of customers. My final question. A lot of investors are still wary. Well, we saw a poll from Pew last year finding more than 60 percent of Americans had little to no confidence in the reliability or safety of cryptocurrency. I mean, what would you say to someone who is intrigued by this premise, but just doesn't trust it yet? I think there's two ways to look at crypto.

One is Bitcoin, meme coins and the tradable assets. And in that way it's sort of a tradable asset, just like options and futures and stocks. And then the other way is it's an infrastructure layer and it's next in line of the procession of infrastructure developments and financial services going from pen and paper filing cabinet, mainframe, on-premise, cloud, and now crypto technology or blockchain is the next step in that. And I think that's the one

that's the more interesting view. The skepticism around crypto as a technology, making many, many independent things in the financial system easier, lower cost, more efficient, and just possible, that'll eventually fade away as more products like stock tokens hit the market. And it just becomes more and more clear that, hey, this is real stuff. It's giving me exposure to something that has fundamental utility, and that's very

powerful. And that's very powerful. And that's going to be hard to ignore. Vlad Tenneff is the CEO of Robinhood. Vlad, thank you so much for stopping by and joining us on What's News. Thank you for having me. And that's it for What's News Sunday for July 13th. Today's show was produced by Charlotte Gartenberg, supervising producer Sandra Kilhoff, and deputy editor Chris Sinseley.

And we had help from Daniel Bach. I'm Luke Vargas and we'll be back tomorrow morning with a brand new show. Until then, thanks for listening.