Fintech firm Revolut is launching a new service through its Revolut Bank UK Ltd., marking a significant advancement in the UK market. The new service will provide deposit accounts for individuals and businesses, with eligible deposits protected by the Financial Services Compensation Scheme (FSCS) up to £120,000. This means Revolut users will enjoy similar fund security guarantees as traditional banks.
Revolut is gradually migrating its UK customers to the new banking architecture, a process expected to last several months to ensure a stable transition of the platform. Simultaneously, Revolut plans to roll out current accounts to new customers in the coming weeks. This phased implementation approach aims to minimize disruption to existing platform operations. Currently, Revolut has approximately 13 million customers in the UK.
With the banking license secured, Revolut can expand its product range, planning to introduce lending services and more financial instruments to complement its existing payment and digital banking features. This move will enhance Revolut's competitiveness in the UK financial market. The new banking architecture supports Revolut in conducting a broader range of financial operations under a regulatory framework.
The Financial Services Compensation Scheme (FSCS) will provide protection for eligible deposits held by Revolut Bank UK. If a financial institution fails, the FSCS will compensate customers, with a maximum payout of £120,000. As a crucial safeguard in the UK financial system, the FSCS ensures Revolut customers enjoy fund security comparable to that of traditional bank customers.
The Prudential Regulation Authority (PRA) will regulate Revolut Bank UK, overseeing its financial stability and ensuring its operations meet stringent standards. This means Revolut needs to meet the same regulatory requirements as other banks in the UK, including capital controls and operational risk management. This approval marks Revolut's formal entry into the regulated banking sector.
Besides Revolut, several blockchain and digital finance companies are also actively seeking similar regulatory status. Companies like Ripple, Paxos, and Circle have explored bank license applications in multiple jurisdictions. Furthermore, cryptocurrency exchange Kraken recently obtained a limited-purpose master account from the Federal Reserve Bank of Kansas City, allowing it limited access to the Federal Reserve payment system. This is a significant milestone for cryptocurrency-related financial infrastructure.
Revolut continues to expand its regulatory footprint in international markets, having already obtained banking licenses in the EU and Mexico. Currently, regulatory authorities in Peru are reviewing its recent bank license application.