Robinhood is now trading USDC stablecoins on its platform and s withdrawals to Ethereum and Polygon crypto wallets. While buying and holding USDC on Robinhood is a pointless strategy for investing (the price of USDC will never change), withdrawing it to a personal crypto wallet can be a smart move, as stablecoins are the lifeblood of DeFi and may one day (hopefully) become a widely accepted payment method by retailers.
Stablecoins are Decentralized Finance (DeFi) applications, this will change as retailers and banks begin accepting stablecoin payments.
On Sept. 20, Ethereum/Polygon blockchain gas fees are charged in USDC instead of ETH or MATIC, so the does not need to hold ETH or MATIC to withdraw their USDC from Robinhood.
Transferring Dollars To A Crypto Wallet
To transfer money from a bank to an Ethereum/Polygon wallet through Robinhood, s must first own an Ethereum wallet, which is free to set up using the popular to their personal crypto wallet. To transfer money back to their bank , the must hold enough ETH/MATIC in their wallet to pay the gas fee, transfer the USDC back to their Robinhood , sell it, and then withdraw the dollars to their bank .
Using a crypto wallet to hold USDC gives s the ability to be their own bank, but it is also a much bigger responsibility with zero protections if their wallet's private key is leaked or if they suffer a phishing scam. That is where hardware crypto wallets (or "cold wallets") are useful, as they prevent hackers from using viruses to steal a browser wallet's private key, though they can't protect against phishing scams. For the best security, the hardware wallet's address should never be shared publicly, nor should it ever interact with any crypto wallet the shared on social media, as doing so will permanently link the hardware wallet to the and could potentially expose them to risk of robbery (if their holdings are large enough).
Now that s can buy and sell USDC on Robinhood, it is possible to use Robinhood as an on-ramp for moving dollars on or off Ethereum/Polygon, which opens the door for allowing people to be their own banks and use their money in Web3 decentralized applications. Until banks begin ing stablecoins, cryptocurrency exchanges like Robinhood and Coinbase will remain the most cost-effective way to transfer money between Web2 bank s and Web3 crypto wallets. While self-custody for cryptocurrencies and stablecoins carries a responsibility that many people won't care to take on at this time, those who are up to the task (or who don't have a choice) can now use Robinhood to transfer money to their Ethereum/Polygon crypto wallet.
Source: Robinhood/Twitter, Robinhood, Metamask