Fintech powerhouse Revolut is preparing to enter the turbulent and potentially lucrative world of crypto derivatives, signaling a bold shift in strategy despite regulatory constraints in its home market. The move underscores the company’s ambitions to diversify its crypto offerings and appeal to more sophisticated investors globally, even as UK retail investors remain barred from accessing such products.
Revolut has begun building a dedicated crypto derivatives division, actively hiring specialists in London, Barcelona, and Dubai. The new unit will focus on offering complex financial instruments tied to cryptocurrencies, such as futures and options, which are known for their high volatility and speculative nature. These products can provide high returns but also come with significant risk, especially for inexperienced investors.
The company’s recruitment drive is targeted at building out institutional expertise. While Revolut is traditionally known for its retail-facing banking and trading app, it appears keen to pivot toward the institutional market with this new derivatives offering. Job listings reveal roles for professionals with deep knowledge of derivatives pricing, trading infrastructure, and compliance – suggesting that Revolut aims to create a robust, fully compliant platform to support this new arm of its crypto business.
This expansion comes despite the fact that the UK’s Financial Conduct Authority (FCA) has banned the sale of crypto derivatives to retail investors since January 2021. The FCA’s decision was driven by concerns over consumer protection, citing the extreme volatility of crypto markets, the prevalence of financial crime, and the perceived inability of retail traders to understand the risks involved.
However, Revolut has publicly pushed back against this stance. The company’s own in-house crypto lawyer has spoken out against the UK’s retail ban, arguing that individuals should have the freedom to decide whether or not to trade high-risk financial products. This libertarian-leaning view resonates with a significant segment of the crypto community, who see regulatory restrictions as paternalistic and inhibitive to innovation.
By targeting institutional clients, Revolut is looking to bypass the FCA’s retail ban while still tapping into the growing demand for crypto-linked financial instruments. This could allow the firm to gain a foothold in the global derivatives market, which accounts for a substantial portion of all cryptocurrency trading volume. According to data from crypto analytics firm Kaiko, derivatives trading often makes up more than two-thirds of all crypto activity, driven by institutional and professional investors seeking to hedge risk or amplify returns.
The company’s expansion into crypto derivatives also reflects a broader industry trend. As retail growth in crypto has plateaued amid volatile markets and tighter regulation, many fintechs and exchanges are turning their focus to institutional services. These clients offer larger transaction volumes, longer-term relationships, and are typically more experienced in navigating complex financial products.
Still, Revolut’s foray into derivatives will not be without challenges. The company will need to navigate a patchwork of international regulations governing crypto derivatives, particularly as scrutiny of the sector intensifies in the wake of high-profile collapses like FTX. Compliance, transparency, and operational risk management will be critical as Revolut seeks to scale this new venture.
The choice of locations – London, Barcelona, and Dubai – offers strategic advantages. London remains a global financial hub despite Brexit-related uncertainties, while Barcelona provides access to tech talent and a growing fintech ecosystem. Dubai, meanwhile, is rapidly emerging as a crypto-friendly jurisdiction with proactive regulation and a growing number of blockchain startups.
Revolut’s latest move reflects a continuing evolution from a challenger bank into a global financial services provider with ambitions far beyond consumer banking. Its venture into crypto derivatives could cement its reputation as a high-risk, high-reward innovator – or expose it to greater regulatory and market risk. Either way, it’s a signal that Revolut is not content to play it safe in one of the world’s most dynamic financial frontiers.
