Robinhood — the popular investment and trading app — recently announced that it has received the virtual currency license from the New York State Department for Financial Services (NYSDFS) — known as the BitLicense — that will enable the platform to bring cryptocurrency trading to New York residents.
Robinhood’s crypto investment subsidiary — known as Robinhood Crypto — is already available in more than 30 states and will be rolled out in New York over the next few months. Robinhood also acquired a money transmission license for NY.
Robinhood Expanding Crypto Platform
Robinhood is an exceptionally popular investment platform, particularly among millennials. Robinhood Crypto enables users to buy and sell seven different cryptocurrencies like Bitcoin and Ether side by side with stocks, ETFs, and options 24/7. Trading is also commission free.
Acquiring a BitLicense from New York is challenging, and only a handful of companies have successfully passed under the oversight of the NYSDFS so far. Other notable companies with the BitLicense include Coinbase, Ripple, Circle, BitPay, and Square Inc.
New York is a vast market for cryptocurrency trading, and opening access to trading cryptos for Robinhood users in the state grants the platform significantly more exposure. The company is seeking to expand further into more states following their entry into New York and is striving to compete with other trading platforms that are emerging as regulatory compliance digs further into the digital assets market.
While Robinhood Crypto does allow users to buy/sell among seven different cryptocurrencies, users cannot move them out of the Robinhood application yet, significantly reducing the draw of the platform to more established users of digital assets who prefer custody over their funds.
Updating The BitLicense and Granting More Opportunities for Trading Platforms
New York recently implemented a cryptocurrency task force, which is rumored to have discussed plans for updating the controversial BitLicense. The BitLicense has made it hard for many exchanges and crypto-focused businesses to operate in the state and has led to pointed criticisms by exchange operators of New York regulations in the past.
It is unclear whether the license will be refined to be less restrictive, but the regulatory space around digital assets has evolved significantly since the creation of the license in 2014.
Robinhood’s successful acquisition of the BitLicense follows the first instance of a Bitcoin ATM operator — Coinsource — receiving the license only a couple of months ago. In total, there are only 14 BitLicense’s distributed by the NYSDFS.