Robinhood advocates for passing yields to customers, critiques conventional finance.

Robinhood’s Johann Kerbrat joined Bullish CEO Tom Farley to discuss his platform’s perspectives on stablecoin yields and conventional financial systems.

Robinhood indicated that yields from stablecoins should be conveyed to consumers, while also advising them of the associated risks. (Tom Farley and Johann Kerbratt (Photo: Olivier Acuna/Modified by CoinDesk)

What to know:

• Robinhood executive Johann Kerbrat stated that stablecoin issuers and platforms ought to relay yields to consumers while ensuring that they are informed that such products do not provide protections like FDIC insurance.
• Kerbrat contended that customers, once completely aware of the risks and assurances, should have the freedom to choose among high-yield savings accounts, stablecoins, or tokenized payment solutions.
• He remarked that the traditional T+1 settlement model is an outdated systemic risk and highlighted Robinhood’s initiative toward tokenization and 24/7 trading through its new Ethereum Layer 2, as NYSE and Nasdaq also endeavor to introduce continuous trading of tokenized stocks.

Stablecoin yields ought to be transferred to the consumer, Robinhood General Manager Johann Kerbrat stated on Wednesday at CoinDesk’s Consensus Hong Kong conference.

Kerbrat further mentioned that it should be the consumers’ prerogative to determine the use of their savings, although they must be informed of the risks inherent in these offerings.

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“We believe that we should be able to transfer the yield to the consumer,” Kerbrat said. “They don’t want to be confined to a stablecoin that earns no interest when they could opt for a high-yield savings account.”

Nonetheless, he pointed out that stablecoins come with risks, and issuers, fintech companies, and trading platforms must inform consumers about these risks, such as the absence of FDIC insurance, which distinguishes them from traditional bank accounts.

The Robinhood general manager emphasized that consumers should be aware of the guarantees that exist and those that do not, enabling them to make informed choices about “whether to keep it in a high-yield savings account, utilize a stablecoin, or engage in tokenized payments.”

The discussion surrounding stablecoin yields is central to the crypto market structure framework or CLARITY Act currently being deliberated in the U.S. The digital assets sector is at odds with traditional bankers, who have claimed that such yield could severely threaten the deposit business that is fundamental to U.S. banking and credit.

Market conditions

Moderator Tom Farley, the CEO of CoinDesk’s parent company Bullish, shifted focus to the current conditions of the crypto market. “The market is presently down between 60% to 65% and it appears to me that there’s a prevailing negative sentiment among retail investors regarding crypto due to the events on Oct. 10. Are you optimistic about its recovery?”

Kerbrat expressed that Robinhood maintains a positive outlook based on their customers’ purchasing patterns.

“We actually observe many individuals buying the dip. We see them expanding their portfolios,” which he noted represents a marked change from previous years when individuals largely distanced themselves during downturns in the crypto market.

Kerbrat stated that the existing traditional finance system is “operating on borrowed time,” referring to a T+1 (one-day) settlement model that he characterized as an “outdated relic.”

He remarked that the 24-hour wait for stock settlements poses a systemic risk that modern blockchain technology has already addressed. He advocated for a transition to “atomic” settlement, where the transfer of ownership and payment occurs simultaneously, effectively eliminating the need for a settlement period.

This vision for a revamped market is rooted in Robinhood’s proactive approach to tokenization, which the company sees as a gateway to 24/7 global trading. By migrating assets onto the newly introduced Robinhood Chain, an Ethereum Layer 2 built on the Arbitrum stack, Robinhood aims to allow users to trade tokenized real-world assets such as U.S. stocks and ETFs with the same continuous liquidity that characterizes the crypto markets.

Sources acquainted with the shift to 24/7 trading indicated that around-the-clock trading might not be feasible until the end of 2026, when either Nasdaq or the New York Stock Exchange launches their digital asset platforms.

Robinhood is not the only participant in the pursuit of continuous tokenized stock trading. The NYSE announced plans in mid-January to establish a blockchain-based trading venue for tokenized stocks and exchange-traded funds that operates around the clock later this year.

The introduction of the NYSE’s tokenized securities platform is part of ICE’s wider digital strategy, which encompasses preparing its clearing infrastructure to facilitate 24/7 trading and the possible incorporation of tokenized collateral. Nasdaq, the NYSE’s primary competitor in the U.S., revealed its intentions for continuous trading in December as well.