Robinhood Bets on Bitcoin


No, this is not the Robin Hood you likely have in mind. This is about stock trading mobile app provider Robinhood, which is also known as a “microfinance giant”. The company has been helping individuals trade stocks through an easier and simpler platform. It has recently announced that it is joining the cryptocurrency trading bandwagon. The company was founded in 2013 and is regulated by the Financial Industry Regulatory Authority and Securities and Exchange Commission and seeks to democratize stock trading and now wants to include cryptocurrency as part of its offerings.

Robinhood is offering its cryptocurrency trading for free and is hoping to bring in investors from the cryptocurrency industry which is currently estimated to be worth around $550 billion. It, however, has a certain premium service referred to as Robinhood Gold, which provides margin and after-hours trading. Robinhood does not have its own cryptocurrency wallet yet. For now, it relies on a third-party wallet, but the company will take custody of the cryptocurrencies of users who put their money in the Robinhood platform.

Microfinance and Bitcoin

Finance expert Sharone Perlstein is one of the many who sees this recent development in Robinhood as one of the good developments in the microfinance sector. It may not be exactly in line with more common microfinance service such as microloans but the willingness of companies to adapt to emerging trends is encouraging. Microfinance companies serve a very important role in bringing financial services to those who are not covered by banks and traditional financial services providers. Microfinance is helping people not just in addressing immediate financial needs but also in starting businesses hence enabling economic activity in rural areas.

Perlstein notes on his own website that the full repayment percentage of microloans is close to 99%, which means companies involved in microfinance are not really struggling. Providing financial services to individuals or small businesses not served by banks is not a losing venture. Instead, microfinance companies are enjoying good business even though the amounts they deal with and the interest they earn are minimal. That’s why Perlstein expresses enthusiasm and optimism on the many possibilities awaiting microfinance especially in view of the accelerating progress of technology. Robinhood’s response to the growing popularity of bitcoin is a good example of the extent of possibilities for companies that provide microfinance services. Microfinance, after all, is not just about providing loans and insurance. It can also be about enabling access to stock trading as well as cryptocurrency trading for individuals and small businesses in rural areas.

As companies adopt more extensive use of technology, like the use of mobile technology by most microfinance companies and the adoption of bitcoin, it is safe to say that the future of microfinance is anything but stagnant. Microfinance is not only advancing to benefit borrowers and lenders; its advancement creates a huge potential contribution to achieving full financial inclusiveness.





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Founded in 1994 by the late Pamela Hulse Andrews, Cascade Business News (CBN) became Central Oregon’s premier business publication. •

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