Source: Anthony Pompliano
Compiled by: Felix, PANews
Johann Kerbrat is the Senior Vice President and General Manager of Cryptocurrency and International Business at Robinhood, responsible for leading the company's expansion in digital assets and global markets. Johann discussed the rise of 24/7 trading, Robinhood's expansion into areas such as tokenization and prediction markets, and how AI is reshaping financial products on the Anthony Pompliano podcast.
PANews has compiled the highlights of the conversation.
Host: With the ongoing conflict in the Middle East, Robinhood, as one of the world's largest retail trading platforms, are retail investors buying, selling, panicking, or staying calm?
Johan: It depends on the weekend, as a lot has happened over the past few weekends. But what we've seen so far is that many customers are actually buying the dip and trying to keep up with market changes. Bitcoin's price has been volatile, but if you look at the past 12 months starting from last February, it has been quite resilient. Overall, I think the strength of Bitcoin and cryptocurrency lies in its 24/7 nature. When something happens on the weekend, people can actually use that information to trade and build positions.
Host: President Trump always likes to wait until Friday at 4 PM to say something good or bad, and the after-hours market and cryptocurrency react accordingly. Then every Sunday afternoon, like an hour before the futures open, he says something else, and the market moves again. You have been a pioneer in after-hours trading, trying to get as close to 24x5 trading hours as possible. What's the current situation?
Johan: Yes, 24x5 trading is already live, starting at 8 PM on Sunday and running continuously. Although it doesn't cover all tickers and has limited functionality, it's very interesting. As you said, things always happen on weekends or weekday nights; additionally, we have customers in the UK who want to access the market while they are awake, rather than waiting for the US market to open. Therefore, I think we will gradually move towards 24/7 trading. This not only provides opportunities to trade on news but also balances the needs of different users. Because Sunday futures open earlier than the stock market, less sophisticated investors might have to wait painfully for the stock market to open.
Host: When these investors come in looking for assets, you now have stocks, cryptocurrencies, and prediction markets. You seem to be actively pushing forward in these areas. How blurred are the lines between them? Or do you see a lot of cross-investment?
Johan: This is a major advantage of Robinhood; you can have everything in one place. You now also have options and futures. The appeal of the platform is that you can truly switch between different assets without transferring funds between different platforms, and you can create complex strategies. For example, we see people buying ETFs, buying crypto spot, and also using prediction markets or futures to hedge their positions. Now with the introduction of AI, things are becoming more complex, and you'll see more and more such strategies emerging in the market.
But for us, what we really focus on is accessibility: if you want to keep all your financial investments and wallet in Robinhood, you need access to all products. We shouldn't decide for the customer which product is good or bad, but rather provide them with access and educational tools to ensure they understand what they are doing.
Host: Do you think people use prediction markets for hedging, or are they just speculating and gambling?
Johan: Both. There are indeed some who use it just because they are interested in things like sports, but we also see many people using our new contracts. Take AI for example, if you want to invest in AI now, you could pick a stock, like NVIDIA, AMD, or Google, but the returns are still full of variables; NVIDIA might have a bad quarter, or contracts might not be fulfilled, etc. The prediction contracts in the AI field are much simpler, and for customers, the outcome is relatively fixed. I think this is important, providing these investors with other choices for investing in the market.
Host: This is interesting. Some people try to make complex contracts, but there are also some that make me think 'what are we doing', like: how long a press conference will last, or what color tie someone is wearing—that's pure speculation, maybe with entertainment value, but I don't think anyone would hedge against 'what color the Gatorade is during the halftime show'.
Johan: That's very reasonable. Actually, Robinhood spends a lot of time researching which contracts to list on the platform. For example, we don't do the contracts you just mentioned. We worked with regulators for a long time, knowing what would be problematic, so we avoided many such contracts, focusing more on content that could have a real impact on actual predictions.
Host: You now have 8 business lines with at least $100 million in revenue, is it more now?
Johan: Yes, 11.
Host: Okay, it feels like a bunch of startups stuffed inside a big company. How do you structure products internally? With the rise of AI, it feels like you might be moving faster, I guess AI has something to do with it.
Johan: Yes, it's a combination of factors. We have a very good structure; almost every product line is like a small startup within the company. CEO Vlad and the entire company have built a great framework: the business lines can push forward in their own directions, but we are also committed to creating a cohesive UI and UX, so when you switch between crypto and stocks, it doesn't feel like jumping between different apps. We are also investing heavily in new businesses, like credit cards, banking, etc.
AI definitely plays a role. Our engineers are all using AI, not just for writing code, but also for reviewing code, even helping them brainstorm outside of work hours. More and more code is being released via AI, or even directly done by AI, and honestly, this is just the beginning. For us, AI is not just an internal tool; we also use it for customer-facing features. For example, a feature I really like is called Cortex: it generates real-time market summaries for stocks and cryptocurrencies for users. This saves a lot of time, allowing you to stay on top of the latest news. In the past, you had to go to platform X or news websites, and you might easily miss information; by the time you finally figured it out, the market had already changed.
Host: How do you view using mainstream US model companies? How do you decide whether to use off-the-shelf open-source models or fine-tune your own? For a company with rich resources but needing to prioritize, how do you make decisions?
Johan: Prioritization is very important. We use a lot of existing models, testing different models to see which are more suitable for different purposes; for example, the models engineers like might be different from those preferred by compliance or marketing teams. But we are still in a very early stage. Think back a year ago, engineers would still think 'it's helpful, but not quite there yet', and now it has become very powerful; you can build many tools in just a weekend. For example, we have a crypto API, and I spent a few hours over a weekend writing a trading bot using this API. When we consider the impact of this acceleration effect on the team, it's very interesting because we are still a 'US-first' company, just beginning to expand internationally. We need to build more and more personalized and localized features for each country, and having AI tools that can help us achieve this is crucial.
Host: You are not only building traditional software UI/UX technology, but now also building an L2. I think you and Coinbase are in a copycat war; every time you do something, they follow; they do something, you follow. You entered the crypto market from the traditional stock world, while they entered from the crypto world and are trying to provide more markets. Frankly, the ultimate winner is the consumer.
Johan: I completely agree. I think the more competition, the better it is for customers; it lowers fees and sparks innovation. As for copying, I don't see it that way. For example, they launched an NFT marketplace, and we didn't. What is most critical for us is to spend time communicating with our own customers, doing user research, and understanding their pain points.
One of the pain points is stock tokenization. We see many people who have difficulty obtaining US brokerage accounts due to geographical restrictions cannot access US stocks and ETFs. Additionally, there are settlement issues; T+1 settlement still exists in the US, and 24/7 trading is not yet a reality. So we realized we need technology to solve these issues. We could use off-the-shelf L1s, or we could build our own chain. Ultimately, we chose a combination of both—we wanted the decentralization and security of Ethereum, as well as the liquidity in the EVM ecosystem, so we decided to build an L2. This way we can customize everything we want, making the Robinhood chain the best RWA chain, while enjoying the advantages of Ethereum. We recently launched the testnet, with about 45 million transactions. The most exciting thing is seeing developers building on the chain very excitedly.
Host: Have you seen people using stablecoins to earn rewards or trade?
Johan: We see a lot of stablecoin usage on our platform; we are more like an on/off ramp. People come to Robinhood to buy USDC, then transfer it to their wallets or other platforms; vice versa, people who get paid in USDC transfer it here to convert to cash. Our biggest use cases also include usage between institutions, market makers, and liquidity providers, because we also work with them 24/7; we can't wait for the Fed system to open on Monday if it's Saturday, so we use stablecoins for settlement. In some parts of the world, people even prefer to receive stablecoins over cash because it's easy to verify authenticity and can be used anywhere.
Host: You now have about 2000 different stocks. Interestingly, you are offering these 2000 stocks on-chain in Europe. Is it available in the US?
Johan: Not yet. This is a consideration of both regulation and product. In the EU, there is the MiCA regulatory framework, which is like a miniature version of the Clarity Act being pushed in the US. Under that framework, we launched stock tokens, increasing from 200 in June to 2000 now, and it's running great. I think stablecoins are the first example of tokenization, turning real-world assets into tokens. In the US, there is still a lot of debate; we often have meetings with regulators. Tokenization has huge benefits like instant settlement, 24/7 trading, and can also make private equity, real estate, and art more accessible.
Host: Regarding the method of tokenizing assets, some do it through SPV packaging tokenization, while others, like Figure Technologies, create digitally native stocks directly. What is your current approach? Is there a final goal?
Johan: Our system in the EU works by having a derivative in the middle that tracks the stock price and still provides dividends and corporate action results in cash. In three to five years, maybe the trend will shift towards direct issuance, but we are in the initial stage now.
Host: You were deeply involved in the acquisition of Bitstamp. How is it progressing now?
Johan: Bitstamp is performing very well. We have a 'crypto as a service' white-label solution. Banks are embedding this system to provide their customers with services like buying, selling, holding, and staking cryptocurrencies. With regulation coming, this is very encouraging because more and more companies want to provide crypto services. Rather than building from scratch, they can just use our white-label solution. This acquisition also truly gets us into the institutional business area that we weren't heavily involved in before; we were mainly focused on retail in the past.
Host: What specific services do you provide at the institutional level?
Johan: We work with market makers, hedge funds, family offices, and ETF providers, providing them with liquidity, as well as white-label services, staking, and other products. And because we built one of the largest retail platforms in the US, with a lot of non-toxic buy order flow, combining that with Bitstamp is also very helpful for the exchange's liquidity.
Host: When recruiting teams now, will you reduce hiring because of AI?
Johan: If you look at our career site, you'll see we are still hiring a lot of employees. Due to our growth at the entire company level, not limited to crypto business, and international expansion, we still need to recruit a lot of talent. For us, AI is just a tool. We provide a lot of training and tool support for older employees who didn't grow up with AI. For example, the compliance department can use AI to extract document summaries, saving a lot of reading time. At this stage, AI is just a good way to help us optimize all workflows and give us time to think about how to achieve our goals.
Host: What are your goals for the next 12 months?
Johan: International expansion is a major focus. Additionally, we want to practically drive the advanced trader business. For a long time, Robinhood was seen as a simple place to buy cryptocurrency. Now we are strongly pushing advanced features. Depending on trading volume, you can now buy crypto for just 3 basis points, you can also stake, which wasn't available before, and more coins are listed on the platform.
Host: You mentioned earlier that you are building an L2, but I haven't heard about building a stablecoin. Why?
Johan: Actually, we joined an alliance called the 'Global Dollar Network', which issues a stablecoin called USDG. It consists of several companies like Kraken, OKX, Bullish, etc. We believe stablecoins have become a commodity now, with over 50 different stablecoins; there isn't much differentiation we can make. But we care about the yield generated by stablecoins; we want to distribute that yield to our customers, whether institutional or retail. So we don't want the yield to be locked up by the issuer. The role of the alliance is to distribute the yield to member companies.
Host: You have an AI advisor feature on your platform. Will AI replace financial advisors?
Johan: The assistant we launched is mainly linked to your own investment portfolio, telling you what's happening in the market or how to think about diversification. It strictly does not provide investment advice; it acts more as an educational tool than an investment tool. In the future, regulation around the impact of AI on financial services will also be needed.
Host: Is there anything internally that isn't getting much attention but excites you very much?
Johan: For me, the banking business is very exciting. We recently also launched a suite of products for families. You can create a custodial account for your child. I created one for my son. You can also generate a link to send to family and friends, allowing them to deposit cash or stocks. This is not only to prepare for the upcoming massive wealth transfer but also to break the taboo of not talking about money in families, allowing children to be exposed to financial planning and investment education early on.
Related reading: Robinhood vs Coinbase: Who is the next 10x stock?
