April 27, 2022
Image: Christopher T. Fong/Protocol
Good morning, and welcome to Protocol Fintech. This Wednesday: Fidelity’s risky new bitcoin bet, Revolut’s expanding super app and Robinhood’s layoffs.
Fidelity’s huge retirement-savings business is the latest part of the financial giant to go crypto. The company launched Digital Asset Accounts on Tuesday, allowing account holders to have a portion of their retirement savings allocated to bitcoin. It's starting by offering the accounts to employees of MicroStrategy, a software company that has also placed big bets on cryptocurrency.
It’s a big moment for crypto. Though Fidelity isn't the first firm to offer crypto retirement accounts, the move to offer crypto-enabled 401(k) plans is the first of its kind by a major firm.
Fidelity has stood out for a while for its embrace of digital assets. It began experimenting with cryptocurrencies in 2014 and started testing products with its own employees in 2016.
Fidelity is taking on a big regulatory risk along with its pioneering status. That’s an unusually bold move from a company with a conservative reputation.
Fidelity’s move could prompt a regulatory showdown. The Department of Labor warned the industry in its March note that it soon planned to investigate firms that offered cryptocurrencies in workplace retirement plans. It now has a prime example — and a test case.
— Nat Rubio-Licht (email | twitter)
The emergence of DeFi is shaking up the way consumers think about how they store value. For reference, Visa saw $2.5 billion of crypto-backed transactions in the first quarter of 2022. We’re seeing consumers really starting to use this in a way that even a year ago was kind of hypothetical.
On Protocol: Robinhood is laying off 9% of its staff. CEO Vlad Tenev said the company was cutting back on duplicative roles after a period of “hypergrowth.”
Revolut CEO Nik Storonsky says the neobank wants to offer crypto wallets. It’s also looking at mortgages as it builds out its super app.
Optimism, the Ethereum scaling technology, is adding a governance token. An airdrop will be coming in the second quarter.Uniswap and its investors are facing a class-action lawsuit. The plaintiffs allege that the DeFi exchange failed to register as an exchange or broker-dealer.
Businesses — whether Web2 or Web3-oriented businesses that don’t want to hold crypto but do want to be able to interact with crypto holders — want to be able to offer that as a payment mechanism to their communities. The other is hands-on, where merchants are comfortable accepting crypto.
Thanks for reading — see you tomorrow!