Robinhood Launches Commission-Free Crypto Trading App In Europe

(Bloomberg) -- Robinhood Markets Inc. is launching commission-free crypto trading in the European Union, a week after making its international debut with stock-broking services in the UK. 

The app, which will go live on Thursday, will allow European investors to buy and sell more than 25 cryptocurrencies including Bitcoin, Ether and Solana’s SOL, Robinhood Crypto’s general manager Johann Kerbrat said in an interview. 

The company will offer a cashback-like loyalty program, Kerbrat said, crediting a percentage of each user’s monthly trading volume in the form of Bitcoin.

The launch comes alongside a recovery in crypto prices, powered by expectations that US interest-rate hikes could soon reverse and that the industry might see its first exchange-traded fund tied directly to Bitcoin as soon as next month. Crypto notional trading volumes on Robinhood rose 75% in November compared to a month earlier, the company said in an investor update on Monday.

The Silicon Valley-based company does not have any imminent plans to offer its crypto services to UK investors, Kerbrat said, citing a local lack of regulatory clarity around digital assets.

Read more: Robinhood Wants to Shake Up the UK Market in International Debut

Robinhood will generate revenue from its crypto brokerage by taking a rebate from market makers and trading venues which place trades on its behalf. In Europe that rebate will be “about 65 basis points” per trade, Kerbrat said — nearly double the 35 basis points that the company earns from crypto orders executed in the US. 

While crypto prices have increased this year, trading volumes remain low compared to the surge in interest from retail investors seen during the coronavirus pandemic. That muted enthusiasm has weighed on Robinhood’s overall performance, with the company’s third-quarter revenue slipping, largely due to a 55% drop in crypto trading volumes from a year earlier.  

Robinhood — which first launched crypto trading in 2018 — currently lists around 15 tokens in its home market, where regulators have been cracking down on the asset class. The trading app removed several coins from its offering there, including SOL and Polygon’s MATIC, after the US Securities and Exchange Commission labeled them as unregistered securities in June. The regulatory clampdown has led US crypto exchanges including Coinbase, Kraken and Gemini to expand their overseas operations.

European customers of Robinhood Crypto will not be able to transfer their crypto holdings outside of the app for now. The company plans to add this feature next year alongside more tokens and staking services, Kerbrat said. 

Robinhood has been registered as a virtual currency exchange operator in Lithuania since September and is working on securing approvals in more EU countries, Kerbrat said. The company will be required to gain full authorization as a crypto service provider in at least one EU member state once the bloc’s new Markets in Cryptoassets (MiCA) regime comes into force in early 2025.

Read more: How Europe Wants to Impose Some Order on Crypto World: QuickTake

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