Online challenger bank, Revolut, has just updated the terms and conditions of its cryptocurrency offering, giving its users a so-called ‘beneficial right’ to their holdings. The move comes shortly after the UK Fintech allowed regular customers to access to cryptocurrency trading for the first time, a feature previously reserved for its Premium and Metal customers.
“You will own the rights to the financial value of any cryptocurrency we buy for you. We will hold it on your behalf and you will have a right. This means you can tell us when to sell or transfer it (within the limits of these terms and conditions). You have complete control of your cryptocurrencies, and we will only act upon instructions you give us. You will not be able to carry out transactions yourself,” the updated terms read.
The new ‘legal rights’ come with limitation though. The crypto holder can only transfer cryptocurrency to other Revolut customers in the app, which would involve passing the buyer’s beneficial right in the relevant amount of cryptocurrency to the seller. The banking service, however, wouldn’t allow its users to transfer cryptocurrency to anyone who is not a Revolut customer.
In addition, the sender cannot pay in cryptocurrency using his Revolut Card any more. This means that if he makes a payment using Revolut card, and the only funds he has are in a cryptocurrency, the payment will fail.
Revolut launches in the US
Revolut, which bills itself as a “digital banking alternative”, reminded customers that cryptocurrencies are not like the e-money in their account, thus are not regulated in the UK by the FCA or protected by the Financial Services Compensation Scheme.
Revolut holds an e-money licence, but it does not have a banking licence though it operated in the UK for five years without one.
Revolut has recently rolled out a series of new products, including the launch of its app and service in the US market in partnership with Metropolitan Commercial Bank. Before March 2020, Revolut’s services, which attracted over 10 million customers, have been available in the UK and Europe, with US applicants previously being held on a waiting list.
Revolut was founded in 2015 and claims to be signing up 250 businesses and 9000 customers every day, and projects to reach a 100 million milestone in the next four years. The startup received its European banking license in 2018 as it makes preparations for a shift in Europe’s financial services landscape after Brexit.