- Robinhood will provide its traders using its Arbitrum crypto wallet access to reduce gas fees.
- It is the company's latest expansion into cryptocurrencies.
- The move comes as both fintech companies and Wall Street giants enter the market.
Robinhood is expanding its crypto wallet with an Arbitrum add-on that will reduce merchant transaction fees as traditional fintech companies become increasingly involved in cryptocurrencies.
The stock trading app crypto wallet will allow its users to use Arbitrum, a layer 2 Ethereum blockchain, to process crypto transactions.
This is Robinhood's latest push to tap into the cryptocurrency market.
"We want to be a kind of on-ramp to the world of cryptocurrencies," said Johann Kerbrat, CEO of Robinhood's cryptocurrency division. DL News in an interview in December.
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Robinhood's expansion of its services is the latest in a series of moves by fintech companies like Revolut, PayPal and Venmo to launch and expand crypto services.
Wall Street giants like BlackRock, Fidelity, and JPMorgan have also entered the market through Bitcoin exchange-traded funds and other digital asset services over the years.
These movements come as the price of Bitcoin is trading around $63,000, a level not seen since late 2021, which has also raised the value of Ether and other cryptocurrencies.
Robinhood's Choice Wallet Integration
Robinhood has made cryptocurrencies a key part of its strategy over the years. The stock trading app has about 11 million monthly users, according to its latest financial results.
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The company's crypto arm boosted its growth in the final quarter of 2023. Cryptocurrency revenue grew 10% year over year to $43 million, nearly a quarter of the company's $200 million in transaction-based revenue between October and December.
The self-custody crypto wallet is part of that push. Launched a year ago, it allows users to manage cryptocurrencies without the help of an intermediary.
In December, thrown out a cryptocurrency trading service in the European Union.
While Robinhood doesn't charge fees for transactions made through the wallet, users still have to pay gas: transaction fees for the various blockchains the wallet supports.
Users can send and receive cryptocurrencies on various blockchains, including Ethereum, Bitcoin, Dogecoin, and Polygon, as well as Arbitrum, Optimism, and Layer 2 Base.
Users have been able to trade cryptocurrencies on Ethereum and Polygon via the 0x API and LI.FI decentralized exchange aggregators, respectively.
โEthereum gas fees are an essential part of securing the network, but those same fees can hinder adoption,โ Kerbrat said in a prepared statement.
โHistorically, accessing and transacting on L2 has been difficult for non-crypto natives, but Robinhood Wallet now helps remove the complexities to help onboard those new to web3.โ
Robinhood said it would partner with Arbitrum to enable cross-blockchain swaps โand other campaigns that lower the barriers to using web3 in the Robinhood Wallet.โ
Aleksandar Gilbert is DL News'DeFi correspondent based in New York. Do you have advice? Send an email to aleks@dlnews.com.
