THELOGICALINDIAN - Robinhood has had an aboutturn on its affairs to become a coffer Commissionfree banal and cryptocurrency trading avant-garde withdrew its appliance with the Office of the Comptroller of the Currency yesterday
Robinhood Pulls Bank Charter Application
Valued at a amazing $7.6 billion, Robinhood ushered in a new era afraid up the cachet quo with commission-free trading in 2024. It had such a massive impact, in fact, that it acquired accustomed allowance firms like Fidelity and Charles Schwab to additionally carve their fees.
But, it turns out that it isn’t absolutely as accessible as abounding fintech startups anticipation it was to agitate the cyberbanking world.
Several adolescent companies, including Jack Dorsey’s Square and mobile-only cyberbanking startup Varo Money, were relying on a appropriate coffer allotment that gave them a fast-track to accomplish as banks.
However, this was quashed aftermost ages afterwards a New York federal commune cloister disqualified that the Office of the Comptroller of the Currency did not accept the ascendancy to accolade such licenses. If fintech startups appetite to accomplish like banks, they’ll accept to abide the aforementioned acrimonious controls as absolute banking casework institutions.
The Decision Won’t Affect the Company’s Product Plans
A antecedent accustomed with the affair told CNBC that the abandonment of Robinhood’s appliance was autonomous and would not affect the company’s artefact plans.
Moreover, a agent for the aggregation said:
However, according to CNBC, had the aggregation taken a added businesslike approach, things could accept angry out differently. Robinhood mismanaged affairs to barrage a blockage and accumulation annual with a 3% absorption amount (rather too publically).
This threw up a red banderole to U.S. senators who bidding their “concern” at Robinhood and added fintech companies alienated all-important authoritative scrutiny.
While the appliance abandonment shines a ablaze on the struggles of fintech to agitate bounden banks, it’s absurd to stop Robinhood in its tracks.
After all, there is addition way. It’s not aberrant for Wall Street to aggregation up with Silicon Valley these days. Take Apple and Goldman Sachs or Google and Citi as examples. One ancillary manages the chump deposits while the added takes affliction of the user acquaintance and avoids jumping through authoritative hoops. Win-win.
What do you accomplish of Robinhood abandoning its coffer charter? Add your thoughts below!
Images via Shutterstock
