Robinhood Chain Takes on NYSE/Nasdaq | Robinhood Crypto GM Johann Kerbrat

Today on the show, I have Johan Kerbrat from Robin Hood. He's the general manager of Robin Hood, and they are announcing something pretty cool, the Robin Hood chain test net.

I think we'll probably get the mainet live sometime this year, but today we're getting the details of Robin Hood test net and everything that comes with it.

I was able to ask Johan a bunch of questions about what the role of the Robin Hood test net is in the Robin Hood ecosystem.

My idea for this is this is their attempt to go toe-to-toe with NASDAQ and the New York Stock Exchange.

We know we've talked about this on Bankless before. We know the NASDAQ and the New York Stock Exchange has their own tokenization blockchain strategy.

Each one is a little bit different from each other, but they are going into the world of blockchain and doing the blockchain not Bitcoin thing, trying to use blockchain technology and tokenization to just improve the quality of their product.

Robin Hood's doing the same thing, but in a manner that I think is just more aligned with what we care about here on Bankless.

They're doing it with an open ecosystem on Robin Hood chain and Ethereum layer 2, a permissionless chain unlike NASDAQ, unlike the New York Stock Exchange.

Of course, NASDAQ, New York Stock Exchange, they put equities on their chain, and they are using blockchain technology to boost what tokenized equities can do.

Robin Hood is putting tokenized equities on Robin Hood chain again in the open manner, so really aligned with what I think is special and cool about public permissionless blockchains.

I was able to ask Johan about the whole strategy and the launch of Robin Hood chain and all the details around the test net.

But I also got the opportunity to talk to him about a bunch of other things as well, especially these strategic investments that Robin Hood makes.

They made a strategic investment into Lighter, the layer 2 perps exchange on Ethereum, and also Talon, which is this kind of like backend connectivity platform that allows multiple brokerages and exchanges to all kind of coalesce into one big platform.

It's actually penetrating directly into Coinbase's strategy for growth, which is being like a white label for places like Charles Schwab or Fidelity or anybody who wants to offer crypto to their clients but doesn't want to roll their own code.

They can just use Coinbase in the background. Well, that's what Talon does, and Robin Hood did a strategic investment into Talon.

So, I was able to ask Johan about these questions as well.

Bunch of other topics, too. What's up with the Robin Hood wallet? How does that integrate? The evolution of tokenized stocks and where those are at and whether those are coming to the US or not because right now those are just available for EU participants.

Overall, really great episode. Johan, I really like his leadership over at Robin Hood, and so congrats to the Robin Hood for getting the test net out the door.

That's coming. That's today. That's the announcement here on the podcast. So you're going to hear all about that and more.

But first, before we get into the conversation with Johan, a message from our friends and sponsors over at RocketPool who are launching their long-awaited Saturn upgrade, one of probably the biggest Rocket Pool upgrade ever shipped since launch.

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Let's go ahead and get right into the conversation with Johan from Robin Hood.

Bankless Nation, I'm here with Johan Kerra. He is the GM of crypto at Robin Hood. Johan, welcome back to the podcast.

Thanks for having me.

So, Robin Hood doing some big things in crypto as we know, usually known as a retail investing platform, but you guys have Robin Hood chain, which you guys announced in con last summer and also alongside of stock tokens.

When you put these things together, you guys trying to go toe-to-toe with NASDAQ and New York Stock Exchange?

Yeah, I mean, I think it's a bit of a way to see it. You know, I think what we've been saying is that crypto and blockchain is not just trading of assets.

It's also a technology that can be used to replace financial systems, and we see a lot of things that can be improved on the traditional system.

It's still not working 24/7. It's still not instant to buy a stock and to settle. And all of this already exists in crypto for a long time.

So we think that we can bring the two together and actually use the blockchain technology as a new way to operate the financial system.

So you guys have a pretty big announcement. Robin Hood test net is getting launched and out the door. So what does that mean for people?

Will I be able to go tinker around on a test net? Give me the dates. Give me the details.

Yeah, that's right. So you know we announced it in Hong Kong for at consensus, and really the goal of this public test net is to allow blockchain developer and user to start testing and evaluate the network.

Really the goal is to experiment, develop application, get them certified by Robin Hood, and we are seeing a bunch of requests already for decentralized tokenized platform, decentralized landing platform, decentralized perps exchange, all the things that have been exciting.

What really is interesting for us is to be able to finally build in public after a few months in private test net and getting to a step where we will be able to launch it in the main net.

So there were two possible strategies that I could have seen Robin Hood take with Robin Hood chain.

One would be kind of more of a closed door siloed backend office for Robin Hood just a ledger that Robin Hood operates that connects to Ethereum and has tokenized assets that you guys have gone down that road.

It seems to be you guys are going down the other road which is more of an open developer ecosystem. You still can do all the back office ledger stuff.

It sounds like you will do that but you guys are choosing to really push this into being more of an open developer ecosystem. Talk about that the goal in that direction.

Yeah, you know, I think the way we see it is that all the system that we've been building for years at Robin Hood, a lot of other company, a lot of other institution can use them.

It doesn't really make a lot of sense to just build in our little corner, and what we think is that Robin is actually going to be the first user of the chain.

So, you know, we'll be able to customize the chain for our needs, and we think that a lot of other institution will be able to to use it.

You will start seeing some of the features that we are launching using the chain in the background.

For a long time a lot of the features that we were building we were thinking about this idea that we will have our own chain at some point someday.

The beauty of the stock that we built using arbitrum and using an L2 on Ethereum is that we've been able to launch some product before, for example, the stock token, they were live on arbitrum, and because it's the same kind of network, we're able to transition them into the Robin chain when it's going to be on the main net.

Our goal is to really build in public, make sure that all the system that we use are usable by other people, and really advance the idea of like financial system using blockchain technology.

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So, in the crypto and Ethereum ecosystem, we've kind of seen similar stories like this before, right? a lay an EVM based layer 2 launched by an organization that has you know a ton of like might and power in distribution.

It's not this is not the first time that we have seen this story. So what's what's unique about the Robin Hood chain opportunity versus the the chains that have come before it?

Yeah, we're really focused on the financial application side of things. You know, I think we have a unique position at Robin Hood where we have this very deep expertise around equities, around option, the brokerage kind of old system, and we also have this deep expertise in crypto.

For us the first feature that we're going to launch is less about you know trading of mcoin or about launchpad and this kind of thing that we've seen on some of the competitors.

It's going to be a bit more on this financial instrument that we've been talking around tokenized asset tokenized stocks tokenized real world assets that we are really big believer in and we think it's going to be the way to to change the system.

At the end of the day we also don't want to decide for everybody right so the the L2 is still going to be a permissionless L2 everyone will be able to build on it.

If someone want to develop an application that we're not focusing on they will still be able to do put it on the Robin chain and everyone who's kind of connected to it using the Robin products will be able to access it.

You earlier you said when talking about the developers building on Robin Hood chain you mentioned this thing certified by Robin Hood. What does that mean? Can you go into that a little bit more?

Yeah, it's not necessarily certified in the sense like I'm going to come in and and put a stamp on things but you know we have a Robin wallet.

We have a Robin app that is connected to a lot of crypto system and so for us to connect to a developer apps that is on the chain we will have to make sure that you know it match all the requirements that we have around customer protection around regulation and all these things.

That's what it would mean if we wanted to kind of approve an app on our side. But again permission must change.

Anyone can build anything on it and we are not going to be approving every single application there right some applications some tools that developers build might be certified by Robin Hood and might get elevated in the Robin Hood experience with the apps and distribution that you guys have.

Exactly. Cool. It's a kind of a pretty strong competitive advantage to the apps that do earn that certification in quotes.

Absolutely and you know our goal is really to be able to extend what we are able to do on chain you know Robin there's a set of resources that we are spending on crypto every every year and so for us we have like specific feature that we're really interested because our customer asking for it or are really excited by it.

At the end of the day, there's so much to do in this in this world, right? Like we're just at the very beginning and the early years of blockchain and crypto.

We don't want to limit anyone to to keep building. We think that we're going to be able to implement a lot of compliance system and system proper to tokenize stocks and everything like that that everyone will be able to use if they want into their application.

I'm super excited about actually seeing what people come up with and what they're building on top of our network and how they're going to be able to support kind of the the different ideas that everyone has around financial systems.

Okay. So, test net is up and running. Developers can go tinker with it, play on it, try and build an app that might get be certified.

What What does the timeline look like moving forward from here? Do you guys have like a a mainet target date or what are some of the the next like hurdles for the test net?

I wouldn't say we have like a hard deadline. I think for us the goal is to get in in in the room with all the developer.

We are planning on running hackathon and understanding how people are using the chain getting the feedback making sure that it it's working exactly how we want to we want it to work and then we'll be able to to launch to to the mainet.

I will say usually it doesn't take that much time before the two sessions, so I'm hopeful that we will be able to start using it for real pretty soon.

The New York Stock Exchange, they have this blockchain tokenization strategy. What they're doing is they're building this new 24/7 tokenized marketplace that has this like onchain style settlement settlement as some of his core rails, kind of like a back office upgrade.

NASDAQ, they're doing they're keeping their existing market, but they're allowing the DTCC to optionally deliver purchased tokens in tokenized form after the trade.

There's the Robin Hood strategy, which is the Robin Hood chain with with tokenized stocks. It seems to be that these are three different strategies kind of pointing towards the same conclusion, towards the same outcome.

Going back and reiterating the kind of the question in the beginning. It seems you guys are using this opportunity to kind of swing for the fences here and to disrupt some pretty big players.

Yeah. I mean I think you know we've been doing that since the beginning of Robin, right? Exactly.

Any product that we launch has been fairly disrupting the the financial system and and that's how we think about building product internally.

We usually want to launch new products when we feel like we have a big differentiator where we feel like we can actually bring a lot of value to customers.

It's been interesting to see, you know, since last year when Vlad or SEO first started to talk about tokenized stocks in in an OPAD, you actually saw a lot of players starting to talk about it.

I think that's where I love working for Robin Hood because we are one of these player that is actually able to move and change the way people are thinking.

To answer more your question you know I think you will see different system everywhere like the same way we are starting to see stable coin in in multiple shape or form multiple companies doing it you will see different chain and different ways of tokenizing product.

I think for us what we're looking at is how do we make it simple to customer like a customer should not know what's going on in the background they don't need to know that like the same way that they don't need to know what protocols they use when they send a text or an email to one.

We want to give them the access to the equities and being able to have all the advantage of the blockchain technology under it like 24/7 trading but at the same time we also want to use that tokenization engine that we built for more than just public stock right so we did some experimentation with private equity last year and we're still extremely interested by that.

We think that real world assets can be tokenized as well like real estate arts other things and so really we we hope that there's a time where all these assets will all live within an ecosystem and basically interfaces like Robin Hood will be able to tell you like okay you want to buy this stock or you want to buy this product the best price is on this chain with this system and I will get it for you and you won't have to worry about bridging gas tokens private keys and all these kind of things.

Let's go and get an update on stock tokens. So can you just remind me and listeners who has access to stock tokens today and as I understand it US US citizens don't have access to stock tokens. Will that change anytime soon? What's the story here?

Yeah, currently we we launched it in the EU. So all the the 30 member of the EU and EAS have access to it. Currently not a US citizen.

We're out of work on it as well and there's a lot of discussion happening. I'm sure you've seen in DC around the CLY act and what does it mean for tokenized asset and is a tokenized security a security and you know the SEC has been pretty clear about that.

I think a lot of the innovation that has been happening outside of the US is going to come back now that we are it sounds like getting regulation pretty quickly.

Right now our focus has been in the EU and you know that was phase one and then phase two was the 24/7 trading and the permissionless trading which we are hoping to be able to launch soon.

More to come on that but I think for us what's been really exciting is the way that we've been able to expand. We launched in June last year in can with 200 stock tokens and now we're at more than 2,000 stock token.

That really shows that you know the engine that we built is compatible with many type of assets and that we are able to grow the offering quickly which has been like one of the most requested thing for for our product. People don't want to just access a few assets. They want to be able to access the entire market.

From my vantage, I mean the tokenized stocks, tokenized equities, tokenized securities vertical is one of the more exciting parts about crypto in 2025 and 2026.

It seems to be that there is a constraint on this sector in crypto on chain at least with liquidity. While everyone's kind of excited about it, getting actual a liquid market of these security tokens on chain seems to be a constraint.

Which it has second third order consequences because if there's not strong liquidity on some of these tokenized securities, it really limits their ability to be in DeFi.

It's just a a constraint on the expression of the asset. If there's not a lot of liquidity there, then you can't you have to worry about liquidation when if you use it as collateral and things like a and so the liquidity problem is pretty fundamental to anyone trying to put onchain stocks and tokens.

I suspect Robin Hood might have some advantages here that other players don't have because you guys have an actual real exchange. what what is the strategy for like bridging the liquidity or bolstering the liquidity of Robin Hood's stock tokens on chain?

You know, I think it's an interesting problem, right? And and what has been funny to us in a way is seeing how people have been trying to kind of cut corners and and launch computing product faster to to try to you know get it before us or or whatever.

We we took a separate path where we knew that liquidity was a problem. We've seen what happened with some stable coins, for example, in the past that would dep from the dollar.

It wasn't necessarily an issue with the actual stable coin. It was still like the same kind of tokenized version of a dollar bill, but because there was delay between the bank or because of the system, you will see the dollar DPEG the stable coin dip from the dollar.

We were worried about this problem and that's why we launched our stock token in multiple phases, phase one was the one that we launched where it's not transferable on chain and you know phase two is to be able to go on chain with the right exchange that we have in place and everything.

For us a lot of the solution is going to be into how do you route orders and how do you connect to multiple source of orders instead of just having one off.

That will give you a lot more flexibility on on the liquidity. But I think the the other response is that you know with the fragmentation of the market you're going to have a fragmentation of liquidity and so application like Robin and other application will have to actually use that as an advantage to be able to route the orders to the best price available the same way that that's what we are doing for crypto trading on the platform.

When you buy a bitcoin on Robin Hood, we offer in general the lowest cost available in average. And the reason for that is because we connect to multiple market makers, multiple exchange.

When you place an order, we actually look at what is the best price between the different systems and we only route to the to the best one. And so I think that's going to happen as well for for the stock token.

That will create the arbitrage necessary between the liquidity pools between the market makers that live on these pools to actually make sure that the price stay pegged to to the actual underlying asset.

So when more and more Robin Hood stock tokens come online and accessible to more people like the US US gets their hands on it and then the liquidity also deepens what can you really do past that point like what is unlocked to you when you have you know good volume good liquidity a good asset base a good user base what what kind of happens next in the arc of onchain stock tokens?

I think you will see a lot more accessibility so you know right now if I ask you how to buy a stock on the London stock exchange or on the Hong Kong exchange you will see it's fairly difficult and often it comes with a lot of fees because you know every every type of system are kind of charging more fees.

I think you will see more lending solution more borrowing solution you know being able to pledge your assets and and get a credit line for example to buy a house or to buy a car also not something that is necessarily the the easiest especially if you're not like high net worth or you try networks.

All these things will give you access to better lending pools, better underwriters that are more programmatic and not just people looking at spreadsheets and forms.

That's like kind of the the basic vision and then I think what you're going to see is more of this real world asset that we've talked at the beginning where it's not going to be just about public stock.

It's about going to be about private about different type of equity and you will be able to mix all these assets together. So you know if you're trying to buy a house you don't have to just show your your public stock you can also show your private equity that you have tokenized or whatever opts that you have and use that as collateral for for other ways of of learning and borrowing.

I think it's going to be interesting, and we're just very much at the beginning to be honest of this kind of phase of the financial market.

Let's introduce the next puzzle piece here, the Robin Hood wallet. So you guys have a chain and you guys have the stock tokens, you also have a wallet. How does the wallet synergize with the other parts of the the puzzle pieces that we've talked about?

Yeah, our wallet has always been, you know, for us a way for the customer that want to do more than just what we offer on the Robin Hood main app basically.

We have a lot of customers that are more advanced. They want to get access to DeFi, they want to get access to like taxes, do more with their assets.

We always had this question on like how do we bring all of this within Robin Hood? And, frankly, the answer is that it's it's really difficult. there's so much to build and there's so much new apps coming up every day that us integrating manually with all these apps will take forever.

We launched this wallet that really very much look like Robin Hood you know it's the same easy to use good UX and all this stuff that we've been doing for a very long time but you're in control of the keys you're in control of what you're doing you can approve the transaction the way you want.

For the chain obviously it will work with it you know it will be optimized for the Robin chain it will be optimized for all the stock tokens that we are building and the trading system that we're implementing.

We see it as a way to show to the world like what is a good wallet and at the end of the day the pirate key can be exported if you don't like the wallet you can import it into a different provider but we give you at least a choice to to access a very great UI and UX to communicate with the Robin chain.

So, is the Robin Hood wallet really meant for the people who are like, you know, kind of like me and many of the banklist listeners who just want to have a little bit more control and sovereignty over our financial world and like or is it like may maybe it's just for just just that where it's really just meant for users like me.

Whereas like the Robin Hood app, the main Robin Hood app, I would expect you guys aren't going to only give certain features to the Robin Hood wallet. like if a tokenized stock is going to show up in the Robin Hood app nonetheless.

Is really just the Robin Hood wallet kind of just meant for some of the more hardcore people who like to touch the chain themselves?

Yeah, that I think that's right. I think you know some some you know Robin has more than 26 million customers. So some some of them are like more the the day-to-day they they don't really care about crypto. They just want some exposure. They want to diversify their their portfolio.

We have some outcome people like you that you know they want the convenience of a full service experience. They want to control the the custody. They they don't want to leave their assets on on chain on the platform and they want to keep it on their control.

For us that what was just a step into this direction because otherwise you know you cannot build this great product that is very easy to use and then someone transfer it into their own software that hasn't really spent as much time into thinking about UX problem and suddenly like the experience is is pretty bad.

The way that we launch our stock token in the EU, for example, you you can buy a stock token like the same way you're buying a stock in the US. If I show you the two applications side by side, you you will look at them and you think it's the same.

We actually added a pill at the top that says that it's a token to actually tell people like it's tokenized, but you know, it's it's using arbitrum technology. We don't ask you for bridging. We don't ask you for gas fees. We don't ask you for keys or anything like that. We just take care of that because we think that's what is important and the wallet on the other side is a bit more involved.

You will be able to see that you have to improve approve a trans action. You will you will be able to see like what the network is. So so it's a bit more advanced I will say.

Let's get into the clarity act. What part of the clarity act is like more meaningful to Robin Hood specifically your guys' like lines of business? What what parts do you guys have more interest in than others?

I mean overall what we're excited about is that it's just setting up you know a level playing field for everybody for for a long time in the US with this fragmented situation where for example we are first taking everywhere in the US but four different states that you know for for now don't authorize it.

We have assets that are available in some state not the other because they have different requirements or different licenses need so so it's been really difficult to offer a unified experience and at the end of the day who's suffering is the customer because you know someone just moved to New York and suddenly they cannot do something specific on the platform.

It was frustrating for us because you know we've always played the game we've always got licenses. We have a license from the SEC. We have a FCM registered with the CFTC. We have a bit license with New with New York. We have many money transferring license in the US.

We also have many licenses internationally. So we know how to work with the regulator. We know how to do the the right thing for offering products safely.

Just because there are some disagreement at the political level customer cannot access all the products. So what client is going to bring is this level playing field where everyone can offer the same product to the same customers and there is not this like constant question of like are we going to get sued if we offer this product or not.

Everything else is interesting as well because you saw also the adoption from the institution. You know with the genius act passing earlier last year you actually saw a lot more institution interested to to embrace stable coin.

Everyone understand the value of stable coin compared to a wire like there's no one doubting that 24/7 instant transfer is is better than our current system. But for a long time, people didn't know how do you put stable book on your balance sheet if you're a company or how do you use it without creating a problem with banking laws or or or securities laws.

Having this clarity act will kind of put us back in the game at the same level as other countries like the EU where we have the the Mika framework and we'll be able to start building on top of it.

Right now, the Clarity Act is kind of getting hung up between Coinbase and the banks over the fight over stable coin yield. Do you guys have a position on this part of clarity? Do you guys like care about this?

We think that stable coin are fairly fairly innovating pieces and and right now we're kind of handicapped with the question of like can we pass interest or not or can we pass the yield or not.

I think there's a lot of compromise that can be done on each side where you know having the proper disclosure about the risk and having the proper explanation to the customer to understand that stable coins are not bank accounts or that stable coin can be used as more than just a payment rail is pretty important.

I strongly believe that we do need to have regulation in place. I don't agree with the idea that no bill is better than a bill than a bad bill.

We just need to keep actually discussing and coming up with a proper compromise between the different stakeholder on this one.

Few questions about two strategic investments that Robin Hood has made somewhat recently. the more the most recent one, this one perked my interest and I think was kind of well may maybe I'm reading into into it too much and you you can tell me, but January of this year, Robin Hood invested into crypto trading platform Talos.

Talos's $ 1.5 billion valuation in their series B. They raised $45 million from a from a handful of people. Robin Hood invested in Talos.

I was looking into Talos about what Talos does and it's a bunch of back-end connectivity as a trading platform to help you know a variety of different people in the financial world to all kind of access trades, crypto trades.

Charles Schwab or Interactive Brokers, they could all use Talos to all kind of point towards the same interoperability connected trades around crypto buying and selling making making bids or asks for Bitcoin on a particular exchange and you know Talos just can operate as like the backend of a lot of um you know pre-existing brokerages, pre-existing exchanges to offer crypto and they just use Talos in the back end.

That is explicitly what Coinbase has been going after. Now Robin Hood did not buy Talos. It made a strategic investment into Talos.

Talos is doing something that is directly trying to go headto-head with Coinbase which is one of your guys' largest competitors at least inside of the crypto space. Talk about talk about the strategy here with these with these strategic investments because Robin Hood's not a VC.

You guys don't have a VC arm to my understanding, but nonetheless decided to make this strategic investment to like inform me what the what the strategy is here.

We love to invest in companies that we utilize and use and where we are good partner with. Talos is one of them. We've been working with them for a long time and I think it was a a pretty good strategy for us to invest with them.

We have two different ways of thinking about our work with Stalos. one is we are