Revolut Eyes Crypto Derivatives Market Amid Regulatory Challenges

According to Cointelegraph, fintech leader Revolut is preparing to enter the crypto derivatives market, as indicated by a recent job posting for a 'General Manager (Crypto Derivatives)' role. The position, advertised in London, Barcelona, and Dubai, aims to oversee the comprehensive launch of a derivatives platform, encompassing product architecture, trading infrastructure, regulatory compliance, and commercial strategy. Revolut's ambition is to establish one of the most trusted and scalable derivatives offerings globally, leveraging its extensive customer base of 50 million users. Revolut's expansion into crypto derivatives comes as part of its broader strategy to enhance its cryptocurrency services. On May 19, the company announced plans to invest over 1 billion euros ($1.1 billion) in France and pursue a local banking license. However, the move into derivatives could face challenges in the United Kingdom, where the Financial Conduct Authority (FCA) banned crypto derivatives for retail users in 2021 due to concerns about risks to inexperienced traders. This regulatory environment makes Revolut's initial market for crypto derivatives uncertain, although familiarity with European Union financial market regulations is considered advantageous, and Dubai presents another viable option due to its regulatory framework allowing retail access with proper licensing. Revolut's strategic direction reflects its ongoing commitment to expanding its crypto offerings. Founded in 2015, the company was among the first major fintechs to embrace cryptocurrency, introducing trading support in 2017. In May 2024, Revolut launched Revolut X, a dedicated desktop crypto exchange designed for experienced traders, offering trading for 100 tokens with low fees and real-time on/off-ramp capabilities. Plans are underway to extend this platform to mobile devices in 2025. The company's crypto division has become a significant revenue driver, with pre-tax profits doubling to 1 billion British pounds ($1.3 billion) in 2024 from 438 million pounds in 2023, fueled by rapid customer growth and increased crypto trading activity. As Revolut continues to expand its financial services, including credit cards, buy-now-pay-later products, and potentially mortgages, its focus on crypto derivatives underscores its commitment to innovation and growth in the fintech sector.