Key Takeaways:
– Robinhood unveils a feature enabling European customers to transfer over 20 types of cryptocurrencies within its app.
– The option for self-custody of digital assets is new.
– This move comes after the launch of Robinhood Crypto in the EU in late 2020.
– The extension of services within Europe is viewed as potential growth due to the EU’s Markets in Crypto-Assets (MiCA) regulations.
– Robinhood also plans to repay 1% for any tokens deposited on its platform for a limited period.
Robinhood, a renowned retail investing platform, is set to raise its service bar in the European region by enhancing its cryptocurrency capabilities. As part of its robust international expansion strategy, the platform announced on Tuesday that it would allow European customers to seamlessly transfer digital currencies in and out of its app.
Expanding Cryptocurrency Transfers
This adaptive change empowers Robinhood users in the European Union to deposit and withdraw a diverse array of more than 20 digital tokens. These include but are not limited to renowned currencies such as Bitcoin, Ethereum, Solana, and USD Coin.
This innovative move introduces Robinhood’s European user base to self-custody of assets. This strategic method means customers can undertake direct ownership of their cryptocurrencies in a wholly owned wallet that securely stores their funds. By marking a clear departure from reliance on third-party platforms for cryptocurrency management, Robinhood is pivoting towards more autonomous digital asset management.
Historic Milestones and Future Predictions
The robust expansion of crypto services in Europe comes a year after Robinhood launched its cryptocurrency trading platform, Robinhood Crypto, within the region. Initially, the platform supported buying and selling of cryptocurrencies, but limited users to transfer their digital assets away from the platform, be it to a third-party platform or personal self-custodial wallet.
The general manager of Robinhood’s Crypto division, Johann Kerbrat, sees great potential in the European market for digital currencies. The EU’s supportive regulatory environment, specifically the Markets in Crypto-Assets (MiCA) legislation, is a key attraction. This legislation provides standardized rules for the cryptocurrency sector across all EU member states, encouraging cohesive practices across the market.
Indicating his optimism, Kerbrat stated, “The EU can become a very attractive market next year.” Once MiCA’s implementation is finalized, all EU member states will adhere to a unified regime, making the EU’s addressable market as large as the U.S.
Offering Customers More than Just Transfers
In a bid to create more customer value, Robinhood is offering European customers a promising bonus. For a limited time, the company will refund customers 1% of the value of deposited tokens into the platform. These refunds will be credited in the form of the cryptocurrency transferred into Robinhood.
Understanding Regulatory Challenges
Interestingly, the move to expand in Europe comes at a time when the relationship between U.S. crypto firms and domestic regulators is notably tense. Several companies are currently wrestling with lawsuits from the U.S. Securities and Exchange Commission (SEC) over allegations of dealing in unregistered securities.
Robinhood, regulated by both the SEC and the Financial Industry Regulatory Authority (FINRA) in the U.S., is well-equipped to navigate this regulatory landscape. It also holds a BitLicense with the New York State Department of Financial Services.
Partnerships and Future Growth
Earlier last year, Robinhood announced plans to acquire Luxembourg-based crypto platform Bitstamp. The acquisition, valued at around $200 million, aims at leveraging Bitstamp’s technological expertise while expanding Robinhood’s global reach. This strategic move further supports plans to diversify Robinhood’s crypto business by catering to more institutional investors.
As of now, Robinhood’s crypto trading, deposit, and withdrawal features are exclusive to its European Union customers. Cryptocurrency services are not yet offered to U.K. customers, even though the popular stock trading service was launched there last November. However, with its clear focus on expanding globally, the mandate of cryptocurrency services is expected to widen in the foreseeable future.