Robinhood stock trading app: A National Banking Charter is attractive to many financial tech companies but alas! it is very hard to get. That hasn’t stopped California-based stock trading app Robinhood[1] from approaching regulators at the Office of Comptroller of the Currency (OCC), with an ambition[2] to acquire necessary licenses allowing it to receive a national banking charter.[3] This would effectively class the platform as a bank.
The idea is to become a more official banking platform[4], covering all bases; from cryptocurrency to stocks and fiat accounts for its customers. Currently, Robinhood boasts a 4 million strong user-base who enjoy commission-free stock trading. In the last year, alongside equity investments, it introduced the ability to trade Bitcoin and Ethereum for users across 16 states. If the company can receive ‘bank’ status it could offer more services such as savings accounts to its customers and become a one-stop-shop for finance.
Robinhood Stock Trading App
At present, Robinhood is registered with FINRA as a broker-dealer and is regulated by the Securities and Exchange Commission (SEC). If the company was to offer traditional banking services, it would join the ranks of several Fintech startups who have the idea of stirring people away from larger banks. This is rather reflective of current trends encouraged especially by those who trade in cryptocurrencies. Promises of higher interest rates, a smoother and convenient user experience, along with transparency, are attractive to many potential clients.
National Banking Charter Regulations
But the regulations surrounding banking services are vast and complicated. Most startups that have been offering banking services are usually affiliated with an existing institution and haven’t actually acquired a banking license themselves. Licenses can in some cases take years to finalize.
