switching gears, trading and investing app. Robin Hood
has been a big part of the retail investor revolution
early last year driving meme stock mania and giving most
customers a taste of the markets for the first time
joining us now is dan Gallagher, chief legal and
corporate affairs officer at Robin Hood. Damn good to
have you here now. President Biden yesterday signed an
executive order focused on Cryptocurrency regulation. What is Robin
Hood's feeling about this? So we're feeling really good
ken about the executive order. It was a great
signal from the administration of a few things first that
crypto is here to stay right. You've you've heard
some doubt about that over the last five years or
so in Washington about the ability of crypto to last
as an asset class. And I think this executive
order, you know, firmly states that yes,
crypto is here to stay. Which it talks about
the important uh competitive issues around crypto and how the
United States needs to be a leader, a global
leader in innovation and technology regarding crypto. And so
that's a huge statement to make. And then one
that we take really uh you know, close to
heart at Robin Hood is that the executive order talks
about inclusion, right? The need for crypto to
open markets two to american citizens who have not been
served by traditional finance and this is something that's near
and dear to us. It's something we've done in
the brokerage space and we're already doing in crypto and
we look to expanding that. So we're pretty excited
now? You're a former S. E. C
. Commissioner. So what's your take on increased oversight
for both meme investors as well as the Crypto sector
. Yeah. So it's starting with crypto I think
we we desperately need clarity. Right? I do
worry that overregulation has the potential to uh you know
, to to quash innovation. And I think crypto
is all about innovation. It is driving tremendous change
in our financial infrastructure. It's critically important that we
not quash that. And so regulators need to take
their old authorities and apply them to a new space
unless there's legislation coming anytime soon. And if they
do that, they should do so very carefully and
selectively not to quash innovation. The current atmosphere can
though of of uh you know, opacity with respect
to regulation of uncertainty. The greatness around regulation can't
last. And that's why I'm very happy to see
this executive order mandating that the various relevant agencies go
off and and work on a more I think,
sensible regulatory regime when it comes to meme investors.
You know, it's a it's a conundrum for regulators
, especially at the sec things that happened early last
year. Uh you know, messaging and coordination happening
on reddit that then gets translated to activity at retail
firms like Robin Hood and and elsewhere isn't really something
you can regulate right? The the ability to go
and read it and uh you know, your your
First Amendment rights to free speech or very well protected
over there. Obviously if you're committing fraud or something
that the sec and other agencies will take a look
at that. But they're going to have a really
hard time trying to get at investors themselves in that
space. And to the extent that anything that happened
early last year, uh, you know, is
attributed to brokerage firms like Robin Hood. I think
a lot of that blame and a lot of that
saber rattling is misplaced, right, so called Gamification
of investing concerns with payment for order flow. I
think these things are all false narratives about the events
of last january. And so we are fully engaged
in these debates. And, and I think that
regulators are starting to see the truth of, you
know, we just had an investor movement. It's
not something to be discouraged and you don't always need
a villain when things like this happen. Now,
you're the right man to talk about this, biden
talked about developing a digital dollar now. If that
happens, what would it look like and how would
it impact Robin Hood? Yes. So this is
super exciting. I think that, uh, you
know, talk of the Central bank dollar, there's
been a lot of work, uh, involved in
this. A lot of intellectual work going on the
last few years, former CftC Chairman, christian Karl
has done a lot of work, uh, and
advocated for this for a long time. And I
give him credit for that. You know, the
ability to have a digital dollar I think is,
uh, would just be a massive boon for financial
markets and, and for investors at the end of
the day. And one of the biggest issues in
US markets right now is we have antiquated payment rails
, right? The, the whole payment system here
in the United States is essentially 40 50 years old
. And so when you talk about things like we
did at Robin Hood, where we want to accelerate
the settlement cycle for securities transactions, put crypto aside
, you know, when we want to go from
T plus two to real time settlement, what,
what you hear all the time can, is we
can't do that. Uh, you know, that
, that's too much right? Maybe T plus one
is good enough. And truth be told it's good
, but it's not good enough and to get to
, to the optimal state to get to real time
. Same day settlement, you need better payment rails
. And I think a central bank dollar will play
a big role there as could, by the way
, stable coins. Right? So, so more
security, more predictability from a regulatory perspective for stable
coins could also help us bring a lot of efficiency
into the markets. And then I think the innovation
that could, that could go along with that in
new financial products, you know, reaching again,
um, populations that have been underserved for a long
time, I think is going to be dramatic.
So I'm looking forward to that very much now,
Crypto has become part of the Russia Ukraine conflict.
So I want to ask you what kind of dimension
does crypto ad when it comes to war nowadays.
Yes. So I mean this has been such a
big deal in the markets obviously for the last couple
of weeks. Uh you know, at a macro
level, obviously the tragedy that we see unfold on
tv is is heart wrenching. Um and then it
translates into uncertainty in our markets. And and as
you see, can in a on a daily basis
, an hourly basis here, there's just massive uncertainty
right now. And so investors are wondering what to
do should they be in, should they be out
of the markets? We're we're all looking to see
what the Fed does in response to this. Are
they gonna pull back? Uh they're gonna be more
aggressive today's inflation numbers don't help too much. 7.9%
. My goodness. Um you know, the last
time we saw that was 1982. And so,
you know, the uncertainty that's been triggered by this
, the Ukraine conflict has, has been profound.
Kryptos role is very interesting because you've seen an outcry
for crypto platforms to to drop their Russian customers to
not serve the Russian markets. We had Robin Hood
, our domestic only platform when it comes to crypto
. So we don't have these issues because we don't
have for national customers. Like Russian customers, we
don't have our platform operating there, That's something our
competitors are dealing with right now and it's been sort
of a mixed response, but it, it does
present a new, uh, you know, chapter
in the evolution of sanctions, when you have,
you know, all of these financial sanctions being inflicted
upon Russia, but you have this almost a little
bit of a safety valve for, for some of
the Russian citizens to be able to use their crypto
to make payments and, and to move money,
uh, you know, into our country and then
outside its borders. Now, my last question for
you is to wrap this up, Robin Hood in
the past has said educating retail investors is important.
So what are your plans to prove that? And
also your plans for expansion? Yes. So look
, education is just critical and the best education,
by the way, ken, is being in the
market. And that's something robin is. Robin Hood
has uniquely done has brought people into the markets that
weren't in before. We have 22 million plus customers
active on our platform. You know, financial literacy
, a lot of financial literacy goes to just actually
being in the markets and transacting. And so we
feel very good about that. We have our,
our learn page on our website, we have Robin
Hood snacks, which has downloaded millions and millions of
times per month. So we feel really good about
our educational offerings, but we're constantly tweaking it,
we're constantly rethinking it to make sure investors have what
they need and they're gonna need it, you know
, as, as we roll out new products as
we just introduced our first trade recommendation product, which
is, is quite frankly groundbreaking in the brokerage space
. Uh, you know, most, most platforms
have moved to self directed brokerage, which Robin Hood
has been traditionally. Now, we're offering a recommendation
if you want it and and subjecting ourselves to heighten
regulatory scrutiny for doing it. But making sure that
folks have the advice they need, I think is
huge, and I look forward to, you know
, eventually expanding that offering crypto wallets and all sorts
of other products on our roadmap. It's a,
it's gonna be an exciting year at Robin Hood,
you know, international expansion and crypto innovation and uh
, you know, we're just thinking it's gonna be
a great year alright, don't lose our number down
when all this is rolling out. That's dan Gallagher
, Chief legal and corporate Affairs Officer at Robin Hood
, dan, thank you so much for stopping by
the show, We appreciate your time sir.