Robinhood agrees to distribute Ripple's RLUSD stablecoin after its crypto revenue more than halved
On October 27 Robinhood agreed to run Ripple's stablecoin through its retail app, its institutional settlement and its own corporate treasury, hours before reporting that its crypto trading revenue had collapsed. The price of the shelf is undisclosed, and the deal reaches XRP last.
Richard Tang · 3 min read
Ripple spent this week buying shelf space in American retail finance, and the timing explains why the shelf was for sale. On October 27 Robinhood−4.63% — Robinhood, down 4.63 percent today agreed to run Ripple's dollar stablecoin, RLUSD, through three layers of its business: the retail app used by nearly 29 million funded customers, institutional settlement on the XRP Ledger, and Robinhood's own corporate treasury 12. That evening it reported quarterly results, crypto trading revenue more than halved, and the shares fell 8.7% before Wednesday's open 23.
A bank charter turned RLUSD into corporate cash
The enabling hop came first. On Monday October 26 the Office of the Comptroller of the Currency, the US bank regulator, gave final approval to Ripple National Trust Bank, which will hold RLUSD's reserves; Robinhood signed the next day 4.
The day after, Moody's+0.39% — Moody's, up 0.39 percent today rated RLUSD A2 with its top short-term grade, the first investment-grade rating Moody's has given a stablecoin, citing reserves of short-dated Treasuries and cash held mostly at BNY+0.51% — BNY, up 0.51 percent today 56. The rating is the hinge: a corporate treasurer cannot park cash in an unrated token, and can hold a rated dollar. Robinhood is now moving its liquidity management, payments and intercompany netting onto Ripple Treasury 1.
Robinhood's fee engines are rotating off crypto
Robinhood's results explain the yes. Crypto transaction revenue more than halved while event contracts, options and equities all grew; prediction markets now out-earn crypto, and a record $1.42 billion of total revenue did not save the stock 23. Stablecoin rails are the next fee line, one that pays around the clock rather than only when retail trades: ledger settlement, financing across roughly 20 assets through Ripple Prime, and perpetual futures on Bitstamp later this year 1.
Prediction markets and equities now out-earn crypto at Robinhood
Data
| Value | |
|---|---|
| Options | $399M |
| Event contracts | $173M |
| Equities | $121M |
| Crypto | $120M |
Two camps, one scarce asset: the shelf
The stablecoin market is splitting into camps, and in both the scarce asset is distribution, not technology. On Friday Coinbase−1.66% — Coinbase, down 1.66 percent today will convert 14 stablecoins that fail European rules, Tether's among them, into USDC, the token issued by Circle−2.63% — Circle, down 2.63 percent today: shelf space won through regulation 7. Ripple is buying shelf space outright, adding BNY custody and C2FO trade-finance settlement in the same week 4. Its president, Monica Long, calls stablecoins "a critical piece of financial infrastructure" 8. But neither company disclosed volumes, revenue or economics, so this deal's value is a claim, not a number 69.
The deal reaches XRP last
XRP holders should read the fine print before bidding the token up. Settling in RLUSD does not require buying an equivalent amount of XRP, and only about 38% of the stablecoin even sits on the XRP Ledger; the rest is on Ethereum 96. The honest signal is whether RLUSD supply on that ledger climbs once Robinhood's settlement starts.
Robinhood's crypto chief, Johann Kerbrat, put the deal in one line: "Utility is what moves stablecoins forward" 1. His company just wired itself accordingly, and the builders connecting a rated digital dollar to daily settlement and treasury work are the ones creating the value here. This week, that work sits on Ripple's side of the ledger.
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