Robinhood Markets Inc. has made a significant stride in its global expansion by introducing commission-free cryptocurrency trading in the European Union.
This move comes just a week after the company launched its stock-broking services in the United Kingdom.
Starting Thursday, Robinhood‘s app will enable European investors to engage in the buying and selling of over 25 different cryptocurrencies, including popular options like Bitcoin, Ether, and Solana’s SOL.
https://twitter.com/RobinhoodCrypto/status/1732651173721878535
Johann Kerbrat, the general manager of Robinhood Crypto, shared these details in a recent interview, highlighting the broad range of options available to users.
In a unique offering, Robinhood will introduce a loyalty program akin to cashback. According to Kerbrat, this program will reward users with a Bitcoin credit, calculated as a percentage of their monthly trading volume. This innovative approach aims to incentivize and enhance user experience on the platform.
The timing of this launch coincides with a noticeable recovery in cryptocurrency prices. This upturn is attributed to anticipations of a potential reversal in U.S. interest-rate hikes and the buzz around the possibility of the industry’s first Bitcoin-linked exchange-traded fund launching as early as next month.
Robinhood reported a substantial 75% increase in crypto notional trading volumes in November, a stark contrast to the previous month, as per their latest investor update.
Despite the European expansion, Robinhood does not currently have plans to extend its crypto services to UK investors. Kerbrat cited the lack of regulatory clarity around digital assets in the local market as a primary reason for this decision.
Robinhood’s revenue generation strategy for its crypto brokerage involves rebates from market makers and trading venues. In Europe, the company expects to earn around 65 basis points per trade, significantly higher than the 35 basis points from U.S. operations.
However, it’s noteworthy that despite the recent price increase in cryptocurrencies, trading volumes haven’t reached the heights seen during the pandemic-driven retail investment surge.
This subdued enthusiasm has impacted Robinhood’s overall performance, with a marked decrease in crypto trading volumes contributing to a revenue decline in the third quarter.
The platform, which initially launched crypto trading in 2018, has faced regulatory challenges in its home market.
The U.S. Securities and Exchange Commission’s recent classification of certain tokens as unregistered securities led Robinhood to delist several coins, including SOL and MATIC. This regulatory environment has prompted many U.S. crypto exchanges to explore international markets.
For now, European customers of Robinhood Crypto will not have the option to transfer their crypto holdings out of the app.
However, the company plans to introduce this feature and expand its offerings, including more tokens and staking services, next year.
Robinhood has been operating as a registered virtual currency exchange in Lithuania since September and is actively seeking approvals in other EU countries.
With the upcoming Markets in Cryptoassets (MiCA) regime set to be enforced in early 2025, the company will need full authorization as a crypto service provider in at least one EU member state to continue its operations.