Robinhood Plans to Launch a Crypto Wallet 'as Fast as Possible'

Soon you'll be able to use your Robinhood wallet to deposit and withdraw crypto.

Pointing to a huge number of first-time crypto traders this year, Robinhood says it's prioritizing the growth of its crypto offering. Not only is it hiring and investing heavily in its cryptocurrency offering, it also plans to launch a wallet with deposit and withdrawal functionality.

Robinhood CEO and co-founder Vlad Tenev spent more than half the online broker's first fireside chat on YouTube talking about cryptocurrency. He said that in the first month and a half of this year, over 6 million customers traded crypto for the first time.

Tenev promised the company would launch a wallet with deposits and withdrawals "as fast as possible." There is a caveat though. Robinhood's top priorities are to ensure the service scales as it handles the exponential crypto growth, and to achieve top-level customer support.

What is a cryptocurrency wallet?

If you're new to crypto, you might be wondering why you'd need a wallet for a virtual currency. The main thing to understand is that your wallet helps you manage the keys to your cryptocurrency. Keys are a fundamental part of cryptocurrency -- when you own crypto, you own public and private keys that let you access your assets. A popular mantra in the crypto community is: "Not your keys, not your coins."

The idea is that if you don't have complete control over your keys, someone could take your coins. For example, your account could get hacked or frozen. Right now, Robinhood customers can use the platform to buy, sell, and store crypto. But they can't move currencies off its platform and into their own wallets. That's why some people have an issue with Robinhood's platform -- it manages your keys for you. Its new crypto wallet would let you take back that control.

Many enthusiasts store the majority of their crypto in what's called a cold wallet, which is offline and therefore more secure. You might also put currency you want to access more often into an online, or hot wallet. Either way, you choose how and where you store your crypto.

How does Robinhood's crypto offering stack up?

Robinhood's mission is to democratize investing. It pioneered zero-commission trading and continues to offer low fees. It was among the first online brokers to offer fractional shares. With 17 cryptocurrencies, it's also one of the top crypto exchanges.

With its roots as an online stock broker, Robinhood differs from exchanges like Coinbase which only trade cryptocurrencies. Tenev is keen to point out Robinhood is a cost-effective way to trade. "We want to make sure you get the most crypto for your money," he said. "We want to compete on price."

He also addressed the criticism the company faced over its January move to temporarily suspend GameStop (NYSE: GME) trading. Robinhood was flooded with negative reviews as users expressed their frustration at the halt on trading. The brokerage justified its decision, but the backlash has yet to fully dissipate.

"We're working hard to dispel the fake narratives," he said. "But the bulk of the focus is letting the products speak for themselves and continuing to make the product better and better."

Tenev explained the thinking behind launching Robinhood's initial crypto product without a wallet. "We did feel there was a product offering that appealed to people who didn't want to manage their own keys," he said.

The new wallet functionality -- which is next on Tenev's priority list -- would let users move those assets to other wallets. "As much as people are bugging me about that on social media, I'm bugging our crypto team and software engineers," he said. The CEO added that the online brokerage might also add more coins along the way.

RELATED: Check out The Ascent's guide to the best NFT wallets.