UK-based Revolut has received a banking licence from the Prudential Regulation Authority (PRA). This is a milestone for the fintech unicorn as it awaited this licence for three years. Notably, Revolut applied for the UK banking licence back in 2021.
What’s next for Revolut?
The banking licence is a key step in accelerating the company’s growth as it moves the company on from its current status as an e-money firm, which operates between consumers and licensed banks.
The UK licence will allow the fintech unicorn to hold customer deposits, opening the door to new income streams, since it can start funding own-branded loans and mortgages. However, it will face more stringent regulations and has to guarantee customer deposits up to £85,000.
This approval means that the bank is all set to become a fully fledged bank in the UK, that is also licensed to offer crypto services. Revolut has allowed the buying and selling of crypto for several years and introduced a standalone cryptocurrency exchange for experienced traders earlier this year.
Revolut’s co-founder and CEO Nik Storonsky, said: “We are incredibly proud to reach this important milestone in the journey of the company and we will ensure we deliver on making Revolut the bank of choice for UK customers.”
The catch!
The company claims that the PRA has granted the licence with restrictions. In addition to this, the company is going through the mobilisation stage, which competitors such as Monzo and Starline have been through.
As per the Bank of England, this mobilisation stage should last up to 12 months and not longer. The most notable restriction of this stage is that the bank cannot hold over £50,000 in total customer deposits.
