Revolut has enabled crypto withdrawals, phase one of its plan to go 'full crypto'

Edward Cooper, head of crypto at Revolut, has in the past been saddened by suggestions that the neobank isn’t a true believer in crypto. He admits, however, that the token trading tool debuted by Revolut back in 2017 “wasn’t full crypto.”

Now that’s changing. Revolut has this morning announced that customers may now withdraw bitcoin from the app and transfer it to personal wallets. Before, customers would have to sell their crypto for fiat before withdrawing funds.

“We want to make sure that, when we talk about being a financial super-app, that the financial products we have in there aren’t half-baked. We want them to be fully functional,” says Cooper.

By adding withdrawals, Revolut becomes one of the first “non-crypto” firms to give its users greater freedom to move cryptocurrency around. This is significant because in most markets globally, regulatory frameworks for digital assets businesses are still being developed (although there are specific rules that companies must comply with, relating to things like anti-money laundering). 

In the U.K. alone, Revolut is subject to a host of other, older regimes that pertain to its payments and stock trading functions, for example. But financial regulators around the world are still trying to understand the risks associated with, say, allowing customers to withdraw crypto to a wallet that is not “hosted” by another regulated entity. Some policymakers are concerned that so-called unhosted wallets represent a loophole in today’s anti-money-laundering regimes.

Revolut’s new crypto offerings come with caveats. Heavily requested by the app’s crypto customers, withdrawals will initially be made available to paid subscribers to Revolut’s Metal account in the United Kingdom; will only be possible for up to £500 a day and £1,000 a month; and users can only add up to three external addresses. Withdrawals will be extended to more tokens and users soon, and limits will also be raised, according to a spokesperson.

But the move is nevertheless a strong signal of intent from a company that is simultaneously attempting to win banking licenses in various markets globally, including the U.K. and the United States.

Indeed, Cooper says that the reason for the delay in getting to this point has been the need to get all of Revolut’s stakeholders — which include regulators and banking partners like Barclays and Lloyds (which safeguard the bulk of Revolut customers’ funds) — comfortable with the app’s crypto plans.

“If we were just a crypto-only company we could have done this a lot sooner because we would have fewer partners that we had to discuss this with and make sure that they were comfortable with the product,” he adds.

A partnership with crypto security and custody firm Fireblocks, struck in October of last year, has certainly helped. With the help of Fireblocks’ Multi-Party Computation (MPC) technology, Revolut is better able to manage its users’ private keys — which verify ownership of tokens.

The Block can reveal that Revolut has also partnered with Elliptic, a blockchain analytics firm, to help ensure that any crypto transferred to external wallets doesn’t end up in the wrong hands.

To execute its customers’ trades, Revolut plugs into some of the world’s largest crypto exchanges, including Luxembourg-based Bitstamp and Coinbase, which recently completed a landmark direct listing on the Nasdaq.

Looking ahead, Cooper says Revolut has “a chunky launch plan for a bunch of new tokens.” It just added another 11 in April, including those linked to major decentralized finance projects Cardano, Uniswap and Filecoin.

Eventually, the neobank wants to give its crypto-holding customers a route to earning passive income — likely in the form of interest — on their funds.

“Currently it’s not something we offer but it’s no closely guarded secret, we would like to offer that,” says Cooper.

The new ability to withdraw crypto will make the inclusion of stablecoins in Revolut’s trading tool more compelling than it would have been before, according to Cooper.

“A stablecoin becomes really useful when, for instance, I can send USDC to my MetaMask wallet and I can do stuff with it from there. But if it was just a trading asset, I might as well just trade dollars, right?” says Cooper.  

“Now we’re managing to open our product some more, definitely we’re going to start to see if [stablecoins] can be a little bit more interesting for our users.”