Robinhood App is another crypto-related entity that scares the bank since the popular crypto trading app is going after the legacy banks by launching a cash management account in the future. As we can read in the coming altcoin news, the COO of Robinhood Gretchen Howard stated:
“We’re going to come out with a cash management account soon.”
This feature was previously launched and discounted in 2018. The very existence of cryptocurrency already is considered as a threat to traditional banking because it is decentralized. When a decentralized financial system is trying to integrate a fintech platform such as the Robinhood App, the banks become very scared. The big banks are trying to use a policy that will slow adoption of such technologies or by creating their own alternatives.
The launch of the new feature was scheduled now because the regulators pointed out that there is effectively offering an unregulated bank account that has no deposit insurance as it is required in the States. This time, the company has prepared a legacy investment banking establishment which aims to disrupt the business model. The approach seems to be innovative and disruptive. After the retraction in December, Robinhood now aims to prove that the new product is not a real bank account but rather a cash management tool that is embedded in the customers’ already existing brokerage accounts. It is very important to make this distinction because of regulator reason but this is more than just making clear because the new service still has the ability to replace a traditional banking account.
The Robinhood app company has not been shy about sharing its plans to create a new investment paradigm which is focused on bringing many new retail investors. As noted in the latest cryptocurrency news, Robinhood also applied for a federal bank charter so in the long term, the goal is to disrupt the entire banking system as a whole. The banks have a lot to lose since many crypto companies are trying to develop a distinctive product that will attract retail investors and people who want to use decentralized platforms.
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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