Robinhood Stock In Focus After Senate Delays Crypto Bill

Robinhood CEO supported Congress efforts to pass the crypto market bill, after Coinbase CEO withdrew support.

• Robinhood CEO said that there is still work to be done on the bill and has offered help.
• The legislation unveiled on Monday by the Senate Committee would define when crypto tokens are securities, commodities or fall into other categories.
• Coinbase CEO Brian Armstrong said that the company could not support the current draft.

Robinhood stock closed more than 7% lower on Thursday and was the top trending stock on Stocktwits during after-market hours after a U.S. Senate committee delayed a long-awaited debate on a landmark crypto bill.

The crypto bill, dubbed as the Clarity Act, is aimed to create a regulatory framework for cryptocurrencies. The legislation unveiled on Monday by the Senate Committee would define when crypto tokens are securities, commodities or fall into other categories, giving the industry long-awaited legal clarity. It was delayed after the CEO of Coinbase withdrew support for the bill. 

Coinbase Withdrew

Coinbase CEO Brian Armstrong announced the company could not support the current draft, arguing it would enact a "de facto ban" on tokenized equities and restrict stablecoin rewards. 

In a post on X, Armstrong said “We appreciate all the hard work by members of the Senate to reach a bi-partisan outcome, but this version would be materially worse than the current status quo. We’d rather have no bill than a bad bill. Hopefully we can all get to a better draft”.

Robinhood Supports Congress

On the contrary, Robinhood CEO Vlad Tenev, said that “staking is one of the most requested features on RobinhoodApp, but it’s still unavailable to customers in four U.S. states due to the current gridlock. Stock tokens are available to our customers in the EU, but not in our home market. It's time for the US to lead on crypto policy”.

“Let’s pass legislation that protects consumers and unlocks innovation for everyone. We support Congress’s efforts to pass the market structure bill. There is still work to be done, but we see a path and are here to help,” he said in a post on X. 

Stablecoin Popularity

Several prominent Wall Street firms like Bank of America, Galaxy Digital have been pointing out the growing popularity of stablecoins. 

In its recent earnings call this week, Bank of America CEO Brian Moynihan told analysts that about $6 trillion of total U.S. Commercial deposits could migrate to digital assets if permitted. He said that such a shift would move funds outside the traditional banking system and will result in shrinking of lending capabilities for the lenders. 

How Did Stocktwits Users React?

Retail sentiment around HOOD’s stock trended in ‘bullish’ territory amid ‘high’ message volume.

Shares of Robinhood have fallen 4% year-to-date, but have risen 151% over the past 12 months. 

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