Revolut, the French digital payments app which introduced services for bitcoin, litecoin, and ether in 2017, announced the addition of ripple (XRP) and bitcoin cash (BCH) on May 24, 2018. The company states that ever since adding support for cryptocurrencies, a significant increase in their valuation, customer base, and profit has been observed.
BCH, XRP Find New Market
The firm’s core business revolves around providing digital banking services, such as debit cards, payment gateways, and insurances. However, if numbers are to be considered, a reported 20 percent of Revolut’s 1.95 million customer base has diversified their portfolio into cryptocurrencies since their introduction on the platform. Additionally, the company claims that their systems handle over 100,000 cryptocurrency transactions on a daily basis.
Revolut has taken specific measures to avoid company losses due to the volatile nature of cryptocurrencies. It usually does not charge for major transactions via fiat money, however, does levy a 1.5 percent fee for every cryptocurrency transaction.
The same reasons make the digital asset class is infamous in larger financial institutions, alongside the lack of regulations. Centtrip CEO Brian Jamieson elaborated:
“We are seeing a reluctance from the banks and card schemes to offer services or support to crypto-related companies. We receive requests for accounts from crypto-based companies almost daily that we turn away.”
Jamieson’s firm is similar to Revolut’s business, as it provides international payments and foreign-exchange for corporate clients and high-net-worth customers. However, the cryptocurrency market remains a grey area for Centtrip.
Firms Tread Cautiously on Cryptocurrency Route
In 2018, several financial institutions have expressed an interest in cryptocurrency trading, with Goldman Sachs launching a bitcoin futures trading desk on May 3, 2018.
However, cryptocurrency adoption largely remains a feature of financial firms with younger people at the helm, such as Robinhood or TradingView, who are apparently more conversant with the asset class and open to taking higher risks.
Notwithstanding the profits made by firms which introduce cryptocurrency services, the primary question remains of long-term business sustainability.
Some of the Crypto Community Largely Unimpressed with Revolut
Despite the Revolut’s success, a handful of cryptocurrency enthusiasts maintain a skeptical outlook towards the firm, due to several reasons that go against the decentralization ethos.
The application is largely centralized, and cryptocurrencies can only be purchased via the in-app platform. It does not allow users to receive cryptocurrency, in addition to practically discouraging the use of cold wallets, as the Revolut wallet is the only place where a user can store cryptos purchased through the app.
Of course, adding greater functionality would be a welcome move and is likely to be on the cards for Revolut in the near future.
Complete anonymity is mitigated if one uses the platform, as cryptocurrencies can be purchased only after an elaborate Know Your Customer (KYC) procedure, with the information supposedly provided to banks.
At the time of writing, XRP and BCH trade at $0.61 and $1,037 respectively.