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Revolut has abandoned its plan for a bank merger in the U.S. and is now pursuing a separate banking license, according to the Financial Times.
The fintech firm anticipates that obtaining a de novo banking license under the Trump administration will be swifter than buying an existing bank, thus eliminating the necessity to operate physical branches.
(Kay/Unsplash/Modified by CoinDesk)
Key Points:
- Revolut has decided against acquiring a U.S. lender and will instead seek a standalone banking license.
- The fintech firm is convinced that a de novo banking license under the Trump administration will be quicker than purchasing an established bank, thus sidestepping the requirement for physical branches.
- Valued at $75 billion, Revolut is investigating various entry strategies and is actively enhancing its cryptocurrency offerings, having recently collaborated with Trust Wallet for immediate cryptocurrency transactions in the EU.
Revolut, a fintech based in the U.K. that provides cryptocurrency trading, has abandoned its strategy to acquire a U.S. bank and will pursue a standalone banking license as it seeks to grow within the largest financial market, according to a report from the Financial Times on Friday.
The firm located in London had aimed to expedite its entrance into the U.S. banking sphere by purchasing a chartered U.S. lender, which would have permitted it to function across all 50 states.
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However, the company, which attained a valuation of $75 billion during a secondary share sale last year, determined that an acquisition would be more protracted and complex than anticipated, as reported by the FT, referencing sources knowledgeable about the matter. A purchase would likely have necessitated maintaining physical branches, which would contradict its digital-only approach.
Instead, it is pursuing a “de novo” banking license from the Office of the Comptroller of the Currency (OCC). A de novo banking license is specifically issued to new banks. Insiders within the company are optimistic that a reformed OCC under the Trump administration will expedite the processing of applications, as noted by the FT.
Revolut stated that the U.S. remains “crucial” to its global aspirations and affirmed that it is exploring multiple avenues, including the de novo procedure. No definitive choice has been reached.
Although the U.S. regulatory environment is fragmented, recent approvals, such as banking charters awarded to cryptocurrency firms like Circle Internet and Ripple, indicate a more fintech-friendly attitude from regulators.
Revolut has also been intensifying its involvement in the cryptocurrency sector. Last month, it partnered with Trust Wallet to facilitate instant cryptocurrency purchases in the European Union with no fees in certain instances. Additionally, it has obtained a MiCA license through Cyprus, granting it regulatory authorization to provide cryptocurrency services throughout the European Economic Area.
