This tech startup based in California is among those eyeing to tap into the market share currently dominated by oldies in financial services. However, this may be an uphill task given a tech giant like Facebook is yet to get any regulatory approval to launch the Libra crypto project.
California Based Stock and Crypto Exchange, Robinhood, Has Withdrawn its Application for a Banking Charter in the U.S
According to a spokesman from Robinhood, they decided to withdraw the application voluntarily and will continue to focus on financial inclusion. He added that Robinhood is grateful to the parties who walked with them through the charter application procedure.
Robinhood currently enjoys a large capital base advantage having been valued at $7.6 billion back in July; this was after raising $323 million in funds. The digital asset exchange gives some incentives such as zero commissions on crypto and stock trading within its platform. This product has attracted a large clientele to the Robinhood exchange especially young tech savvy investors. In future, the exchange plans to integrate a cash management solution as a replacement for its savings instrument that failed regulatory tests back in 2018.
Despite the claims of voluntary withdrawal, Robinhood’s position is a clear indication of the challenges Tech firms encounter when scaling to financial products. Other firms which have or are currently facing similar challenges include Square and Social Finance.