Revolut Ventures into Crypto Derivatives
Revolut, a prominent player in the fintech landscape, is reportedly looking to venture into the crypto derivatives sector as evidenced by a recent job vacancy for a General Manager to oversee this new initiative. The recruitment is taking place across major cities such as London, Barcelona, and Dubai, indicating a significant commitment towards developing this business from the ground up.
Job Description and Strategic Goals
The role involves managing various aspects of the derivatives venture, including:
- Establishing the product’s framework
- Ensuring trading systems are in place
- Adhering to regulatory standards
- Devising a commercial strategy
The job description sets ambitious goals, aiming to create a derivatives platform that stands out as among the most trusted and profitable globally, particularly capitalizing on Revolut’s extensive customer base of 50 million users.
Broader Cryptocurrency Services and Challenges
This strategic move aligns with Revolut’s ongoing efforts to broaden its cryptocurrency services. Earlier in May, the company unveiled plans to allocate over 1 billion euros (approximately $1.1 billion) for investments in France, alongside efforts to secure a banking license in that region.
However, Revolut’s aspirations in the crypto derivatives market could face challenges due to the UK’s regulatory environment. The Financial Conduct Authority (FCA) previously enacted a ban on crypto derivatives for retail investors back in 2021, citing notable risks for less experienced traders. This backdrop raises questions about the viability of launching crypto derivatives in the UK. Nevertheless, the job posting indicates that knowledge of EU financial market regulations is advantageous, implying that Revolut may consider markets outside the UK where regulations might be more favorable, such as Dubai, where retail access is permitted under the right licenses.
Legal expert Daniel Arroche from D&A Partners highlighted that if Revolut aims for the UK market, achieving regulatory approval would be challenging unless the offerings are restricted to professional investors. In contrast, the road to approval appears smoother in regions like the EU or Dubai.
Recent Developments and Future Prospects
Revolut secured a long-sought banking license in the UK in 2024, which has opened avenues for expanding its lending options, including credit cards and buy-now-pay-later services, with mortgages potentially on the horizon.
Since its inception in 2015, Revolut has positioned itself at the frontline of crypto adoption within the fintech sector, launching trading capabilities for cryptocurrencies in 2017 and continuously enhancing its offerings. Recently, the company rolled out Revolut X, a dedicated platform for crypto enthusiasts that facilitates trading across 100 different tokens, boasting competitive fees and real-time exchange features. This initiative is slated for mobile expansion in 2025.
Notably, the crypto division of Revolut has become a substantial contributor to the firm’s overall revenue, with the company reporting a pre-tax profit of 1 billion British pounds (approximately $1.3 billion) in 2024, a significant increase from 438 million pounds the previous year, largely fueled by rapid user growth and a resurgence in crypto trading activity.
