Revolut’s Crypto Exchange Services: Boosting Profitability Amid Market Growth and New Regulations

- Advertisement -

• The UK’s Financial Conduct Authority mandates 24-hour waiting periods for all crypto transactions under new regulations.
• Revolut withdrew its crypto services in the U.S. due to unclear regulatory frameworks and unstable market conditions.

Revolut, a global fintech firm with 40 million users, has launched a new cryptocurrency exchange platform. This move places Revolut alongside major industry players like Coinbase and Binance. The platform allows users to trade more than 100 crypto tokens with transaction fees between zero to 0.09%. 

This development follows the introduction of Revolut Ramp in March, a product developed with MetaMask that enables direct crypto purchases in users’ wallets. Leonid Bashlykov, who leads Revolut’s crypto exchange products, highlighted the company’s aim to enable users to increase their wealth through both traditional and digital currencies.

Revolut’s financial success is linked to the cryptocurrency market, having first turned a profit in 2021 during a high market period. The lucrative nature of crypto trading is expected to continue contributing to the company’s profitability.

In response to recent regulations from the UK’s Financial Conduct Authority (FCA), which include mandatory 24-hour waiting periods for crypto transactions, Revolut has adapted effectively. These regulations are challenging for smaller or offshore companies but are manageable for established firms like Revolut. 

Boaz Sobrado, a fintech analyst based in London, suggests that these conditions create less competition in the market, providing a larger opportunity for prepared firms like Revolut.

These barriers to entry are unsurmountable for smaller or offshore companies, but achievable for companies like Revolut and Kraken. This means there are less competitors around, and hence a larger opportunity.

Revolut’s continued investment in crypto reflects a positive trend in the broader market, which has seen significant growth following the approval of 11 Bitcoin exchange-traded funds (ETFs) in the US, accumulating over $53 billion in assets. 

The approval contributed to a 40% increase in Bitcoin prices. Additionally, the involvement of major financial corporations like BlackRock and Fidelity has broadened market access, attracting a more diverse group of investors.

Despite these advancements in the UK and global markets, Revolut has ceased its crypto trading services in the US as of August 2023. The company cited unclear regulatory conditions and unstable market circumstances as reasons for this decision. 

This shift affected a minor portion, about 1%, of Revolut’s overall customer base. Nonetheless, Revolut continues to enhance its cryptocurrency services in regions with more defined regulatory frameworks.