Editor's Note
This episode of the podcast featured Johann Kerbrat, Senior Vice President and General Manager of Robinhood's Crypto Business. He mentioned that perpetual contracts have already gained traction in Europe, and tokenization will be the next breakthrough, including putting US stocks, private equity, and commodities on the blockchain.
Johann also directly addressed the comparison between Robinhood and Hyperliquid, stating that it is a juxtaposition of "licensed centralization" and "full decentralization," making them incomparable. However, Hyperliquid's token, HYPE, can now be purchased on Robinhood.
Key Quotes
The Rise of Prediction Markets
· "This is a new way of investing. Previously, ordinary individuals had no way to hedge against the Federal Reserve's interest rate decisions, the future of AI, or which company would create the best model. Prediction markets and event contracts truly allow you to hedge your portfolio from these dimensions."
· "If you want to bet on AI, instead of picking a stock between NVIDIA, AMD, or Microsoft, why not directly buy an event contract related to AI? This is a play that ordinary investors could not access in the past; it was originally only open to specific institutions."
· "In our view, a trading platform is essentially a commodity. Any of our products will be integrated into multiple trading platforms, whether it's crypto or stocks, and the same goes for prediction markets."
Perpetual Contracts and Regulation
· "In many ways, perpetual contracts are a simpler product. You don't have to manage expiry dates or worry about specific funding mechanisms; settlement can be continuous."
· "We have already listed approximately 12 perpetual contracts in Europe, with a maximum leverage of 10x. We have been in talks with the CFTC, and the chairman has repeatedly stated that this is one of their top concerns. Once the US regulatory framework is clear, we can go live at any time."
· "Our stance has always been clear: stablecoin rewards are not the same as FDIC-insured bank accounts or savings accounts. However, we also do not want to penalize users who hold stablecoins solely for quick transfers between wallets and platforms."
Tokenization
· "Tokenization will be the next major breakthrough. Right now, it is very difficult for ordinary users to buy international stocks, and for international users to buy US stocks. It becomes even more complicated across continents, with high taxes, few safe investment channels. "
· "We see many people in different countries buying USDC, USDT, just to have a safe USD exposure. What stablecoins can achieve now, will also be possible in the future with assets such as commodities, stocks, and private equity."
· "Ordinary Americans who want to invest in private equity either cannot get in because they are not accredited investors, or they cannot access high-quality share channels. Tokenization can level the playing field for this."
· "Tokenization is the next stage of technological evolution. Either adapt to it or be eliminated. No one wants to go back to the old system."
Robinhood's Product Logic
· "We want to gradually replace some of the backend legacy systems with a crypto track. In Europe, we have already listed 2000 tokenized US stocks and ETFs, providing customers with 24/7 trading, fractional shares, and instant settlement, all the things tokenized assets can offer."
· "The first interaction with these DeFi protocols is a barrier for many. Users always have to think about cross-chain transactions, how to pay gas fees. But in the Robinhood wallet, all these complex steps are handled in the background, so users don't have to deal with them."
About Hyperliquid
· "On one side, there is a licensed, regulated business, on the other side, there is complete decentralization. These two things cannot be directly compared. What we are doing is centralized. If something goes wrong, you can sue Robinhood, you can file a complaint with the regulator against Robinhood. It's a different world. "
· "We don't see each other as 'irreconcilable foes.' You can now purchase Hyperliquid's token HYPE on Robinhood."
Robinhood's Super App Vision
Host: Robinhood's crypto business started as an experiment a few years ago and has now grown into a full-fledged market. Over the past two years, as you have built up this business at Robinhood, what has the experience been like?
Johann Kerbrat: Pretty cool. We started working on it in 2018, during the crypto winter when many people asked us why we bothered to list BTC and ETH. Our idea was simple, we wanted users to have access to all the financial products they care about, and crypto is one of them.
Since then, we have gradually added many assets, opened staking in most states, implemented transfer functionality, launched the self-custody Robinhood Wallet, and even went live in Europe. Just in the crypto sector alone, we generated over $1 billion in revenue last year. Now that the market has calmed down a bit, we are refining new features that users will need when the next bull market arrives.
Host: You mentioned that the market is relatively calm, but the momentum in the prediction market seems strong. I have some data here showing a 320% increase in the prediction market on Robinhood. Why is the prediction market so enthusiastic?
Johann Kerbrat: I believe this is a completely new way of investing. Previously, ordinary people couldn't hedge against the Fed's interest rate decisions, the future of AI, or which company would develop the best model. The prediction market and event contracts truly allow you to hedge your portfolio across these dimensions.
For example, if you want to bet on AI, in the past, you could only pick a stock from companies like NVIDIA, AMD, or Microsoft. Now, you can directly buy an event contract related to AI. This is a gameplay that regular investors couldn't access in the past, as it was originally only open to specific institutions. This is also one of the fastest-growing businesses for Robinhood, showcasing the value of our super app, where everything is done in one app. You don't need to transfer between different platforms; you can seamlessly go from buying stocks to buying crypto to buying event contracts.
Robinhood's Product Logic
Host: Continuing on the topic of the prediction market, I have another question. With the current success of this product and Robinhood's super app concept, will you further integrate the prediction market vertically? Currently, Robinhood sees a large order flow, but as I understand it, the final settlement of some contracts still occurs on other trading platforms. Will Robinhood internalize the market execution process?
Johann Kerbrat: From our perspective, trading platforms are essentially a commodity. Any of our products will connect to multiple trading platforms; this applies to crypto, stocks, and is also true for event contracts with players like Kalshi and ForecastEx. We also announced a joint venture with CBOE to create a trading platform specifically tailored to the type of event contracts we care about. This is crucial for us to ensure that all the products we want to offer to customers have a venue.
Host: When it comes to integrating these underlying products together, can Robinhood be seen as an aggregator of various crypto protocols and products? A competitor, Coinbase, has already done so; they used Morpho for Bitcoin collateralized loans (Coinbase's on-chain lending product in partnership with the Morpho protocol), allowing users to deposit BTC and borrow stablecoins. I heard that you have also already integrated or are in the process of integrating Lighter for perpetual contracts (Lighter is a decentralized perpetual contract trading platform).
What are your thoughts on building a crypto business using different product lines and directly leveraging underlying on-chain protocols? Will Robinhood's crypto business ultimately become a frontend that aggregates all on-chain protocols and routes order flow to these protocols?
Johann Kerbrat: This is exactly what we have been doing, which is why we introduced the Robinhood Wallet self-custody option. The goal is to allow users who are already familiar with the Robinhood UX to also access the blockchain and engage in DeFi.
You are right. Interacting with these DeFi protocols for the first time can be daunting for many people. Users have to think about cross-chain transactions and how to pay gas fees. However, in the Robinhood Wallet, all these complex steps are handled in the background, so users do not have to deal with them. But we can do more. For example, we have not yet integrated this investment in Lighter, but we have already invested in the company and will use it in the future.
One thing we also want to do is to replace some of the backend legacy systems with crypto. In Europe, we have already listed 2,000 tokenized US stocks and ETFs, allowing customers to access all the benefits that tokenized assets can offer, including 24/7 trading, fractional ownership, and instant settlement. This is important to us: gradually replacing traditional systems with crypto rails and slowly bringing these benefits to users. For example, in the European market, due to the time zone difference, when US stocks open, European users are already asleep, but tokenized stocks can be traded at any time.
US Perpetual Contract Strategy
Host: One of Robinhood's biggest businesses is options trading, and I saw a figure of around $4 billion annually, whether acting as a counterparty or providing market liquidity. Many in the crypto community believe that perpetual contracts are a better product than options. Do you agree? If so many people are essentially trading zero-day options, why not let them use perpetual contracts? How do you view perpetual contracts compared to these short-term options? And how will perpetual contracts enter Robinhood's product ecosystem?
Johann Kerbrat: We have already been selling perpetual contracts in Europe, where there is clear regulation. Currently, we have listed about 12 contracts with a maximum leverage of 10x. Perpetual contracts are indeed a simpler product in many ways: you don't have to constantly manage expiration dates or worry about specific funding mechanisms; settlements can be continuous, which is a significant differentiator and a key reason why it has been so successful in many regions. Another reason is the range of products that perpetual contracts can create. For example, some decentralized exchanges in Singapore have done well with commodity perpetual contracts because the logic is simple – the world doesn't stop on weekends, and when there are events in the Middle East, people want to hedge and invest.
We believe perpetual contracts are a great product. We have also been in discussions with the CFTC to see how we can bring them to the U.S. mainland. However, clear regulation is needed, and the chairman has repeatedly stated that this is one of their top concerns. So we are hopeful that once regulations are clear, we can launch at any time.
Clarity on Stablecoin Yield
Host: On the regulatory front, your CEO Vlad has been quite vocal on Twitter about "unleashing stablecoin yield," referring to the section on stablecoin yield in the Clarity Act. There was a significant development last weekend, where regulators made a clearer distinction between "reward" and "interest," effectively assigning the interest portion to banks. Idle stablecoins cannot directly earn interest; my understanding is that users have to click a button to deposit them into some sort of yield opportunity. How will this be presented in Robinhood's product?
For example, as a user holding stablecoin, based on last week's stance, will it be something like "Earn yield with Robinhood Gold" or "Earn yield with Robinhood Stablecoin Interest," where you have to actively select it rather than it being automatic?
Johann Kerbrat: The final text will depend on the outcome, and until the legislation is passed, we will be cautious. However, it sounds like there should be a good compromise. Our stance has always been clear: the reward from stablecoins is not the same as FDIC-insured bank accounts or savings accounts. We have never wanted to blur this understanding. But at the same time, as Vlad has pointed out, we don't want to penalize users who hold stablecoin solely for quick transfers between wallets and platforms. So we hope that they can also receive rewards while holding stablecoin. Based on these recent actions, there should be room to pass on some of the rewards to users.
If the entire Clarity Act can be passed, it will be a huge benefit for users because then we can develop products for the entire U.S. market instead of being fragmented by state, each with its own rules and products. Once the Clarity Act is passed, we can unify all products nationwide.
Bold Prediction: Asset Tokenization Will Connect the Global Market
Host: I'd like to ask a broad question. Clarity Act, stablecoins, prediction markets, perpetual contracts, DeFi—everyone is looking for the next breakthrough. What is your boldest prediction? What do you think will be the next big thing to explode on Robinhood or the entire ecosystem in the next year?
Johann Kerbrat: Tokenization will be the next major breakthrough. Right now, it's still very challenging for ordinary users to buy international stocks, and international users find it difficult to buy US stocks. It's relatively easier within the Northern Hemisphere, but crossing continents adds much complexity—more taxes, fewer channels for secure returns. Stablecoins are a prime example; people from many countries buy USDC, USDT just to have a secure dollar exposure. We believe this concept can extend beyond currencies. Commodities, stocks, private equity—all these assets are destined for tokenization. Users will not only hold them in their portfolios but will also be able to borrow against them, use them as collateral, or even obtain home equity loans.
These things can be done in the US now if you have a large enough portfolio, but for the average person who wants to invest in private equity, either they can't get in because they're not accredited investors or they can't access high-quality shares. Tokenization can level the playing field, allowing everyone to participate.
Host: One thing that concerns me is, for example, the frenzy in the Korean stock market right now, everyone is excited, but you can't trade on-chain. Also, now we can finally buy some pre-IPO shares of American AI companies, but there are still a lot of pre-IPO shares of Chinese AI companies that are inaccessible. How quickly can you advance this initiative? As the enthusiasm for tokenization grows, how fast can Robinhood onboard tokenized assets and expand to different jurisdictions? How significant is the friction to actually onboard a new tokenized asset?
Johann Kerbrat: It depends on the asset and the regulation. But overall, we have a set of technologies that we have been building for the past 10 years. Personally, I believe our engineering team is one of the strongest in Silicon Valley. So as long as the regulatory side gives us the green light, we can drive this forward quickly. For example, I think Robinhood is one of the brokers with the most embedded AI systems. When you open a coin's details page or a stock's details page, you'll see a market summary. This is one of the most requested features by users—they receive price change notifications and want to know why. We have also developed the Cortex assistant, which allows users to discuss strategies and find areas for improvement. All of these demonstrate that once Robinhood sets its sights on something, it can move fast.
Host: Speaking of tokenization, DTCC (Depository Trust & Clearing Corporation) has also suddenly come out to announce its tokenization service, with over 50 companies participating in the first batch, including Robinhood, planning to go live in October 2026. What does this DTCC tokenization service mean for Robinhood?
Johann Kerbrat: It has always been important for us to collaborate with such institutions. We have long been advocating that T+1 settlement is too slow, it needs to be much faster, and trading should be 24/7. So we are willing to support any initiative in that direction. Ultimately, tokenization is the next stage of technological evolution. Companies either adapt or be left behind. No one wants to go back to the old system. So these companies should all realize that they need to start building products based on this technology.
Robinhood and Hyperliquid
Host: Many people on Twitter like to compare Robinhood and Hyperliquid, comparing their revenue, valuation, user base, scale, and so on. What do you think of the rise of Hyperliquid, a pure on-chain perpetual contract stack? They want to be an on-chain price discovery hub, moving a large amount of off-chain prices onto the chain. What does this mean? Is Hyperliquid a competitor to Robinhood in the crypto future, or are you not too concerned about them?
Johann Kerbrat: In our view, these are two different types of businesses. On one hand, you have licensed, regulated entities, and on the other, complete decentralization, which cannot be directly compared. One thing I like is that now many people are being exposed to new assets like perpetual contracts through them, which we also care about. We are also working on it, but in a different way. We are centralized, and in case of any issues, you can sue Robinhood, you can complain to regulators about Robinhood; it's a different world. But having said that, you can now also buy HYPE on Robinhood. We don't see each other as mortal enemies who never interact. We think they are a great team, and we wish them good luck.
Host: So are you bullish or bearish on them?
Johann Kerbrat: It's not necessarily about being bullish or bearish, but you can buy.
Welcome to join the official BlockBeats community:
Telegram Subscription Group: https://t.me/theblockbeats
Telegram Discussion Group: https://t.me/BlockBeats_App
Official Twitter Account: https://twitter.com/BlockBeatsAsia
