Robinhood is expanding its services in the European Union (EU) by launching commission-free crypto trading.
The move comes just a week after the company made its international debut with stock-broking services in the UK.
The Robinhood app, set to go live on Thursday, will enable European investors to buy and sell over 25 cryptocurrencies, including popular options like Bitcoin, Ether, and Solana’s SOL, Johann Kerbrat, the general manager of Robinhood Crypto, told Bloomberg.
Robinhood to Introduce Loyalty Program
To further incentivize users, Robinhood will introduce a loyalty program that functions similarly to cashback.
A percentage of each user’s monthly trading volume will be credited in the form of Bitcoin.
The launch of the app coincides with a recovery in crypto prices, driven by expectations of potential US interest-rate hikes being reversed and the industry potentially witnessing the introduction of the first exchange-traded fund directly tied to Bitcoin as early as next month.
In November, Robinhood reported a 75% increase in notional trading volumes for crypto compared to the previous month.
However, Robinhood currently has no immediate plans to offer its crypto services to UK investors, citing a lack of regulatory clarity surrounding digital assets in the country.
The revenue generated by Robinhood’s crypto brokerage will come from rebates received from market makers and trading venues executing trades on its behalf.
In Europe, the rebate will be approximately “65 basis points” per trade, nearly double the 35 basis points earned from crypto orders executed in the US.
Trading Volumes Remain Low Despite Price Surges
Despite the rise in crypto prices this year, trading volumes have remained relatively low compared to the retail investor surge witnessed during the COVID-19 pandemic.
This subdued enthusiasm has impacted Robinhood’s overall performance, with the company experiencing a decline in third-quarter revenue, primarily due to a 55% drop in crypto trading volumes compared to the previous year.
In its home market, Robinhood currently offers around 15 tokens.
However, the company had to remove several coins, including SOL and Polygon’s MATIC, from its offering in response to the US Securities and Exchange Commission categorizing them as unregistered securities in June.
The regulatory crackdown has prompted major US crypto exchanges such as Coinbase, Kraken, and Gemini to expand their operations overseas.
For the time being, European customers using Robinhood Crypto will not be able to transfer their crypto holdings outside of the app.
Nevertheless, the company plans to introduce this feature next year, along with additional tokens and staking services.
Robinhood has been registered as a virtual currency exchange operator in Lithuania since September and is actively pursuing approvals in more EU countries.
Once the EU’s new Markets in Cryptoassets (MiCA) regime comes into effect in early 2025, Robinhood will be required to obtain full authorization as a crypto service provider in at least one EU member state.
