Building the Next Financial System on Bitcoin

Thank you, everyone, for the warm welcome. I appreciate it. I am joined here on stage by participants in the network that really cover all the bases that are relevant here in Bitcoin markets. We have an equities platform, a native crypto exchange, and a bank that came from the world of custody. Every base is covered to help you understand the transformation we are going through.

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I want to start with BitGo, because it is kind of amazing what BitGo has achieved: to come from the world of custodying cryptographic keys, and keys are now currency. They have advanced so quickly since the invention of public key cryptography. It has only been about 40 years since the technology itself was invented, and now it is money. You managed to go from that world of keys to a U.S. bank charter. Bitcoin started as a system that people wondered if it could live outside the traditional financial system. Now it is completely integrated with it. Walk us through that change, from pure technical precision all the way to this identity as a bank and chartered infrastructure.

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I think it is the evolution of what is happening. BitGo started in 2013 as a wallet infrastructure provider. Multisig was something we championed. What we discovered is that everybody wants to hold their own self custody, but institutions, when they are holding hundreds of millions or billions of dollars in a wallet, want security and custody. That is how the institutional custody business came about. What we are seeing, particularly with Bitcoin, is the next evolution: how do you get it into the broader markets? How do you start using it as a settlement layer or collateral? For us, it was taking that next step into a bank charter to enter that next area.

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Over at Gemini, you started as a native platform for trading cryptocurrencies and became a trust along the way, advancing your business model. Describe that change and the evolution you have gone through, and how you have managed to chart the secure integration of the legacy system into what you have already built.

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Very similarly, Gemini started as a custodian and as a New York trust, setting that ground level as an institutional-grade player. Building on top of that, we built access to the asset class and the ability not only to hold assets on a secure platform, but to actually take action on those assets. We have built out custody and exchange as our bread and butter, and today much more from a trading and infrastructure standpoint, with regulation and security very much at the forefront.

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Robinhood has had an incredible run. I remember when it launched, it was not really involved in cryptocurrencies. You saw the retail play, got involved, became a household name in 2020 with all the action in the market back then, and now you are one of the most important players in volume, with a lot of trading and retail access. Walk us through some of that change.

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One thing we realized is that people want access to cryptocurrency, but also to traditional markets. For a long time, Robinhood was just equities and options. In 2018, actually during the winter, we decided to launch crypto. That was a pretty powerful moment because we gave access to millions of customers without them needing knowledge of private keys, wallets, or transactions. They were able to get exposure to crypto, at the beginning just Bitcoin and ether, and then we started to add more currencies. Right now, 27 million customers can hold cryptocurrency on the platform or switch to equity or something else. For us, it is very important that we can give access to people without them necessarily having all the knowledge needed to handle a wallet.

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Robinhood started as this retail platform and saw Bitcoin originally as an asset that people were interested in getting exposure to. With the GameStop story and that whole narrative, you started to really realize the infrastructure game and how important it was. Seeing that infrastructure and asset piece, where Robinhood really straddles both, when did you realize what we were dealing with here: cryptographic keys and a sovereignty platform? Describe where we are today on that path.

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It was a pretty long journey for us. Initially, we started with our own custody, and then we started to think about how to evolve from that. For a lot of our customers, we want to give them choice. Not everybody wants to hold assets on the platform, and not everybody wants to own their own private key and deal with the management of that. So we give people the choice. They can decide to transfer. They can use Robinhood Wallet, which is software, if they want to. But at the same time, a lot of customers want the security and peace of mind of knowing that Robinhood is managing the assets for them. Giving those choices is very important.

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Things did not stop there. With institutions coming in and ETFs coming in, now on Robinhood you can access Bitcoin through a Bitcoin ETF in your retirement account, and also directly through the underlying asset. That is very important because keeping the decentralized aspect of Bitcoin is key for the asset, but being able to bring the masses to it is also going to be very important if we want to keep developing on it.

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Bringing the masses is one thing, but bringing sophisticated players and offering them the right tooling is another. When BitGo pursued this license, what applications were you seeing? Is the settlement layer important? What does the banking license allow you to do to securely integrate the system and move more of the world on chain and into crypto?

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We were doing settlement prior to our bank license. What the bank license did was open us up to traditional financial institutions wanting to use our settlement layer. They needed that assurance through regulation and policy in traditional finance to have the confidence to come into the digital asset space and use Bitcoin for collateral and settlement. While we were already doing some of that from an infrastructure standpoint prior to the bank charter, this gave us credibility within the rest of the market.

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We are constantly seeing this division between retail and institutional. It was a much bigger bifurcation at the beginning of the industry, because there was always huge retail interest in Bitcoin from the very beginning. It is one of the rare assets that began on the retail end and started to infiltrate the institutional end. BitGo has been one of the companies to really straddle this. How do you see the bank charter? Where do you see the retail play with the bank charter versus the institutional play?

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BitGo has historically been institutional-focused, but we provide the infrastructure layer to exchanges to be able to give that to the retail masses. Some exchanges will not need to have their own custody layer. We can do that for them.

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On Gemini’s end, you have very famous founders, a huge public-facing company, and successful branding across the market. Where do you see the retail market right now, and where do you see your own infrastructure play in securely integrating this system?

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I agree with your point that Bitcoin as a whole is interesting because retail engagement came first, and then institutional engagement followed. Gemini started as an institutional-grade custodian, and that still holds true to what we offer to both our institutional clients and retail clients. Being able to check off those regulatory boxes as a qualified custodian and have additional trading features available to institutional-grade customers is really important.

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We have also been able to build out an amazing mobile app experience that brings a retail user in, and a credit card that connects directly to your Gemini account. There has been a lot from an experience standpoint, both in the actual investment and purchasing of this asset and in the usability of it.

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Where do you see the opportunities right now? What part of the market, retail or institutional, do you think is underserved from an infrastructure point of view and from a pure product point of view?

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It is interesting to see Bitcoin as a store-of-value asset. That is how a lot of clients come in: they want to purchase it and use it as an investment. The second piece is where they engage and how they now use it, whether that is technology-based or in more of a payment structure. Right now we are seeing examples with the Lightning Network and what Cash App is doing. Those are examples of payments and putting Bitcoin into action. From a retail perspective, that is huge, and I think we are only going to continue to see more of that.

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I am completely amazed by the Cash App rollout. Watching that happen and watching the retail rollout play out that way, the transaction model and the consumer model, where do you see the opportunity at Robinhood? You are straddling much of that same retail market. Where do you see the underserved part of the market in retail for you?

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We still think there is a lot to do on adoption in the U.S. We are obviously in a good spot. We have this type of conference and a lot of people are engaged with Bitcoin and cryptocurrency overall, but there is still a large part of the world that is not really able to access it, access Bitcoin at a good price, or custody it in the correct ways.

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There are also new products being developed that come from the cryptocurrency world and not the traditional markets. We see a lot more adoption and demand outside of the U.S. There is a question of how we bring this onshore. There is a lot of discussion with the CFTC happening right now, even here yesterday. That is important because the rest of the world currently has access to some of these products and a lot of people are using them. We have our own exchange, Bitstamp, that offers Bitcoin perpetuals in Europe, and we think it is time to bring them back onshore in the U.S. as well.

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Perpetuals were an amazing innovation, and watching the rest of the world’s market pick them up has been amazing. Thinking of bottlenecks, for years at these conferences the bottleneck was always regulation: when we have clarity, things can move. We cannot talk about that in the same way anymore. We have so much clarity. We have an act called CLARITY and all kinds of things happening. Are there still bottlenecks left? Looking at all the licenses and banking efforts out there, what are we missing?

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I do not know that there is really a bottleneck, per se, particularly around regulatory clarity. We have seen, I think, six charters approved in the last six months, which is incredible. The bottleneck right now is operationalizing the actual activities. Now that we have the charters and licenses and can get into the mainstream, how do we connect into that mainstream?

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There are definitely places where we still need to use the traditional financial system, whether that is fiat rails or settlement. Bitcoin is the ultimate settlement. It is real time. It is not T plus one. It is real time, 24/7, which is what people want. Now we can plug into the rails, whether through a banking license or other licensing. I do not know that it is a bottleneck anymore, but it is really about how companies like Robinhood, Gemini, and BitGo operationalize it.

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Is there still a friction point in that operationalizing?

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Yes. There is still friction with traditional financial institutions. They do not know how to hook up. They were not spending the time building like we have been. We spent 12 or 13 years building this system, and now we are trying to connect into those traditional financial systems to get those rails. That is the challenge.

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I remember the White House crypto meeting that the president held not long after he took office. The founders of Gemini were there. To me, the story of that meeting was who was not there. Treasury was there, but the FDIC and Federal Reserve were not. Is that part of the friction? Gemini has been a big part of the conversation about this shifting system. Is Federal Reserve infrastructure needed? Is what is being created possible because the friction has been removed, or do we still need to integrate the FDIC and Federal Reserve into it?

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That is fair, and Gemini is definitely taking a large role. It is a little bit in between. It is important to have the regulatory piece. I do not feel as though it is necessarily the bottleneck that we have continued to focus on all these years. We have obviously seen a shift because of President Trump and many other cabinet members who are making those decisions.

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It is less about the regulatory front, but I would not go so far as to say we do not need it. It is very important to the business that we do. It is very important to getting institutional-grade approval. It is also very important in terms of how we align more closely with the traditional financial systems that we all know and are used to and do not typically question. Now, when we are looking to integrate Bitcoin and crypto into these systems, we are starting to question it a lot. Things like FDIC and so on do need to be considered and are important for the clients we are looking to bring into the space.

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Assuming things go as scheduled in May, there is anticipation around a peaceful transfer of power at the Federal Reserve and a wall of cash being created, interest rates going way down, and the sideways market the industry has been in for much of the last few years. A lot of people are anticipating a new era. Where do you all see the players? Is it going to be custodians? De novo banks? What is going to be the major plank? Institutional level or retail level? Where are you most bullish in the stack for what is about to happen?

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I think institutional and retail go hand in hand. You will not see institutions coming into crypto if there is not retail interest. On regulatory clarity, it is still very important. The reason you are starting to see more players get into crypto is because of that clarity coming in, and we are still waiting on some of it. If you compare the U.S. to other parts of the world, there are areas where we are still very far behind.

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We do not have tokenized assets yet in the U.S. Robinhood has been able to launch tokenized stock tokens in the EU. We have been able to launch perpetuals, but not onshore. So the clarity that is supposed to come with the act is still very important. That is how we are going to bring more institutions into the play as well. Until we get there, it will be very hard for an institution to put crypto on its balance sheet, use Bitcoin as collateral, or use it as a settlement layer.

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We need a lot more work. So far, a few years ago when rates were going up, people said Robinhood would lose on transaction revenue and other things. Now we are seeing the opposite, where people are worried about interest rates for some businesses. What is important for us is to create a diverse business. Robinhood has 11 different business lines that are making at least nine figures. That way, when the market changes, we are able to adapt to where the market is going.

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The picture you are painting is the financial user in the middle. They can save money, invest money, trade money, and organize their entire financial life around that. With the same frame for BitGo, which of these pillars do you think will grow quickest? You are involved in saving, investing, and some trading, but mostly a lot of holding. Where do you see this growing fastest?

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I will lean a little bit on the institutional side. I do think the era of buy and hold is evolving into: I want to make money on the Bitcoin I am holding. Particularly for institutions, that means using it as collateral and doing other investments in different assets while still having Bitcoin in your treasury. That is the piece I see really growing.

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From a Gemini perspective, what would be a sign to you that the secure integration of this new system and the old system is not happening the right way?

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You would start to see continued delays on the institutional side. As everyone is touching on, there is massive importance in having both retail and institutional simultaneously. You are not going to get that retail flow without the institutional, and we are not going to get that institutional flow without the regulatory piece and the rails getting integrated in the right way.

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At Gemini, Robinhood, BitGo, and many others, we want to provide access points for both retail and institutional investors to come in, buy and sell, trade assets, stake assets, hold them, maybe take out leverage, and do much more. We want people to have that opportunity from an investment standpoint, almost like a one-stop shop for holding and investing in an asset class. If we continue to see siloed operations where you cannot do all of that and do not have access to another player, that will slow things down. We definitely need the institutional piece to come in.

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A sign that America is successful will be that the rest of the world ends up following. Robinhood has the largest international profile here. How much do you see the rest of the world waiting for a cue from America that it is either working or not working before they jump in?

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For a long time, it was actually the opposite. In the EU, with the MiCA framework, and with innovation coming from Singapore or Hong Kong, for a long time you would see crypto startups moving away from the U.S. It has been good to see the U.S. starting to catch up again and reclaim its place. Right now people are waiting to understand how the idea is going to work. There is also the question around the stablecoin act with GENIUS and how it is going to be changed for the yield portion. You will see regulators matching this, in my opinion. It is going to be interesting in the next few months.

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Watching this stablecoin revolution happen, even with no yield in America, is very interesting because yield can be given abroad. I think of this as the weaponization of the U.S. dollar in ways we have not seen before. Do you see the opportunity to move out of America without moving out of America, in the sense that the American suite and stack of products become interesting for the rest of the world?

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Absolutely. BitGo has been working on global licensing for a long time because we see this trend happening. The interest on yield has been a challenging point here in America. I do think what we are building here will go outside of the U.S., regardless of the regulation and clarity that we may or may not get.

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We heard about a possible swap line with the UAE today. We already have the successful Argentine version. I do not see why the stablecoin conversation will not continue in this way. For Gemini, what do you think about this focus on America and becoming so attractive to the rest of the world?

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We have become really focused on the American market. We have seen so much originally come out of APAC, and America is almost there. As we speak to these regulatory acts and so much coming into place, we want Gemini to stand strong in the brand we have built here. Being able to give everyone in the U.S. an access point to crypto that they can trust, know well, and recognize is really important to us.

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Maybe not for the audience here today, but through our research, only 22% of Americans hold any sort of crypto. That is not even just Bitcoin, although Bitcoin at this point has become the gateway in some sense and is synonymous with crypto as a whole. Gemini’s mission is to expand that. Hopefully we see those numbers increase, and we think we can do that in the U.S.

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We love expanding access and we love that you shared information, but unfortunately we have to restrict access to your great advice because we are out of time. Everyone, please give a warm round of applause for this great panel. Thank you.