Financial technology company Revolut announced on Wednesday that it has launched a bank in the United Kingdom after receiving regulatory approval from the Prudential Regulation Authority (PRA), a banking and financial services regulator.
Revolut Bank UK will begin offering deposit accounts for individuals and businesses, with eligible deposits up to 120,000 British pounds ($160,958) protected by the Financial Services Compensation Scheme (FSCS), according to the company’s announcement.
The FSCS offers a safety net for customer deposits at banks and other financial institutions, similar to the Federal Deposit Insurance Corporation (FDIC) insurance for US bank deposits up to $250,000.
Existing Revolut UK customers will be rolled over to the new account type gradually, with the process expected to take several months to fully complete, according to the company.
The new bank sets the stage for offering a “wider range” of services in the future, including lending, the company said.
Revolut also applied for a full banking license in Peru and a federal banking charter in the United States in January, as crypto and financial technology companies pivot to become banks, blurring the line between digital and traditional finance.
Related: Revolut makes second attempt at US bank charter, names new CEO for US business
Crypto industry has eyes on banks, but banking industry pushes back
Crypto industry companies are increasingly looking to acquire national bank charters in the US and other regulatory designations that would plug crypto directly into the traditional financial system.
These companies include blockchain developer company Ripple, institutional-grade blockchain infrastructure provider Paxos, and stablecoin issuer Circle.
In March, crypto exchange Kraken was granted a limited-purpose master account with the Federal Reserve Bank of Kansas City, giving the company direct, but limited, access to the Federal Reserve’s payments system.
The approval of Kraken’s limited-purpose master account was a historic first for the cryptocurrency industry.
However, a trade organization representing the banking sector in the US is reportedly considering filing a lawsuit against the Office of the Comptroller of the Currency (OCC) to block crypto companies from acquiring bank charters.
The banking lobby has repeatedly pushed back against yield-bearing stablecoins and crypto companies offering banking services over fears that blockchain-based financial services will erode the market share of traditional banks.
Magazine: Crypto wanted to overthrow banks, now it’s becoming them in the stablecoin fight
