Robinhood is moving ahead with its plan to allow users to loan out their stocks to other financial institutions, a program known as fully paid securities lending, Bloomberg reported Wednesday (March 16).
The company is aiming to compete with more conventional brokerages, and said the feature, which first appeared on a beta version of the iPhone app, may be available in the next few months.
Per Bloomberg, the service is dubbed the Stock Loan Income Program (SLIP), according to code discovered by developer Steve Moser.
“Through SLIP, you have the opportunity to earn passive income by lending whole shares of stocks to other institutions,” according to an in-app explanation of the feature. “These institutions may borrow stocks to settle trades or facilitate short sales. You’ll be able to buy and sell as usual, even if your stocks are on loan.”
The lending program would rival similar programs from companies like Morgan Stanley, Fidelity Investments and Charles Schwab Corp, which allow customers to earn passive income off loaning their own stocks.
In January, Robinhood CEO Vlad Tenev said the company was working on the program at the time, though no specifics were offered.
“We are still on target to release this product in the first half of 2022, which will provide even more value to our customers,” Robinhood representative Rouky Diallo told Bloomberg in an emailed statement Wednesday.
PYMNTS recently wrote that two former Robinhood employees have launched a new program that seeks to take on global money transfer services like PayPal.
The company, Atlantic Money, is a fixed fee platform that promises to offer a “better deal” than other foreign exchange services. It was formed by Neeraj Baid and Patrick Kavanagh, who both left Robinhood in late 2020.
Their idea was to look into the difficulties and expenses associated with “financial lives split across continents.” Their project got friction, even despite its disruption of the industry monopolies.