Robinhood is now buying and selling USDC stablecoins on its platform and helps withdrawals to Ethereum and Polygon crypto wallets. Whereas shopping for and holding USDC on Robinhood is a pointless technique for investing (the worth of USDC won’t ever change), withdrawing it to a private crypto pockets generally is a good transfer, as stablecoins are the lifeblood of DeFi and should in the future (hopefully) grow to be a broadly accepted fee methodology by retailers.
Stablecoins are cryptocurrencies with a secure worth that’s mounted (‘pegged’) to a real-world asset, significantly {dollars}. Stablecoins enable customers to switch cash to one another with out a checking account, get rid of the chance of being locked out of a checking account on account of suspicious exercise, keep away from a financial institution arbitrarily refusing to finish a switch, stop retailers from struggling bank card reversals, and are a lifesaver for people whose checking account was closed with out warning or motive (an issue steadily confronted by grownup performers). Whereas on-chain stablecoin makes use of are largely restricted to Decentralized Finance (DeFi) functions, this can change as retailers and banks start accepting stablecoin funds.
On Sept. 20, Robinhood listed Circle’s USDC stablecoin on its platform with assist for withdrawals to Ethereum and Polygon crypto wallets. Robinhood selected USDC on account of its stellar repute and regulatory compliance, versus Tether’s USDT, which has suffered many controversies over time (together with regulatory lawsuits). Transferring {dollars} from a checking account to a crypto pockets by way of Robinhood is achieved by way of shopping for and withdrawing USDC, which works precisely the identical as withdrawing ETH and different Ethereum cryptocurrencies. Conveniently, when withdrawing USDC from Robinhood, Ethereum/Polygon blockchain fuel charges are charged in USDC as an alternative of ETH or MATIC, so the person doesn’t want to carry ETH or MATIC to withdraw their USDC from Robinhood.
Transferring {Dollars} To A Crypto Pockets
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To switch cash from a checking account to an Ethereum/Polygon pockets by way of Robinhood, customers should first personal an Ethereum pockets, which is free to arrange utilizing the favored Metamask Web3 browser extension. Subsequent, customers should full Robinhood’s KYC/AML verification and arrange 2-factor authentication, which is mentioned intimately in Robinhood‘s assist part. As soon as these two conditions are met, a Robinhood person is then in a position to buy and withdraw USDC to their private crypto pockets. To switch a reimbursement to their checking account, the person should maintain sufficient ETH/MATIC of their pockets to pay the fuel payment, switch the USDC again to their Robinhood account, promote it, after which withdraw the {dollars} to their checking account.
Utilizing a crypto pockets to carry USDC provides customers the power to be their very own financial institution, however it’s also a a lot larger duty with zero protections if their pockets’s non-public secret is leaked or in the event that they undergo a phishing rip-off. That’s the place {hardware} crypto wallets (or “chilly wallets“) are helpful, as they stop hackers from utilizing viruses to steal a browser pockets’s non-public key, although they cannot defend towards phishing scams. For the very best safety, the {hardware} pockets’s handle ought to by no means be shared publicly, nor ought to it ever work together with any crypto pockets the person shared on social media, as doing so will completely hyperlink the {hardware} pockets to the person and will probably expose them to danger of theft (if their holdings are massive sufficient).
Now that customers can purchase and promote USDC on Robinhood, it’s attainable to make use of Robinhood as an on-ramp for shifting {dollars} on or off Ethereum/Polygon, which opens the door for permitting folks to be their very own banks and use their cash in Web3 decentralized functions. Till banks start supporting stablecoins, cryptocurrency exchanges like Robinhood and Coinbase will stay probably the most cost-effective method to switch cash between Web2 financial institution accounts and Web3 crypto wallets. Whereas self-custody for cryptocurrencies and stablecoins carries a duty that many individuals will not care to tackle right now, those that are as much as the duty (or who do not have a alternative) can now use Robinhood to switch cash to their Ethereum/Polygon crypto pockets.
Supply: Robinhood/Twitter, Robinhood, Metamask
