Effective October 3, Revolut, a leading fintech firm headquartered in the UK, will cease all cryptocurrency-related services for its clientele in the United States.
The decision comes in response to the escalating intricacy and unclear nature of the US regulatory landscape concerning cryptocurrencies. The company’s decision shocked the banking world, as many saw Revolut’s services as a pioneering push into cryptocurrencies for the general market.
According to the announcement, the suspension of purchasing cryptocurrencies will begin on September 2, followed by a cessation of selling and holding digital assets from October 3.
Revolut has announced the end of its bitcoin and crypto services in the United States.
— Whale (@WhaleChart) August 4, 2023
Revolut stated in its official communication, “To protect our customers from the volatility of the cryptocurrency market and the constantly changing regulatory landscape, our US banking partner and we have made the painful decision to temporarily halt Revolut’s cryptocurrency services in the United States.”
US regulatory climate and its impact on the crypto market
The US has long struggled to impose comprehensive regulations on the domestic crypto sector, leading to uncertainty and confusion among companies operating within the space. The Securities and Exchange Commission (SEC) has acted against some industry giants, including Binance and Coinbase, adding to the turbulence.
Revolut’s decision to cease its cryptocurrency services showcases the direct implications of this regulatory haze. Additionally, the lack of clear regulations could push investors and capital outside the US, as has been pointed out by well-known figures like Brian Armstrong (Coinbase’s CEO) and Jeremy Allaire (Circle’s boss).
The regulatory dilemma also led GameStop, the American gaming merchandise retailer, to reveal that it would suspend its crypto program. Starting November 1, GameStop will remove its iOS and Chrome Extension wallets, citing the “regulatory uncertainty of the crypto space.”
GameStop’s pivot away from crypto
GameStop’s withdrawal from the crypto space is another example of the sweeping changes the uncertain regulatory environment is causing in the industry. GameStop introduced its self-custodial wallet in May last year, allowing customers to manage digital assets and non-fungible tokens (NFTs). The company had even introduced an NFT marketplace on the Ethereum layer two network, Loopring L2.
The sudden removal of these features highlights companies’ risks and challenges when venturing into the still-evolving world of digital assets. It’s an illustrative example of how companies must remain agile and ready to adapt to regulatory shifts that can dramatically alter their business landscape.
The future of crypto in the US
The decisions by Revolut and GameStop to terminate their crypto services represent more than just individual corporate strategies; they are indicative of broader challenges that the US faces in regulating and nurturing the burgeoning crypto industry.
The unfolding developments are heightening the calls within the United States for a streamlined and consistent regulatory approach. Circle’s CEO, Jeremy Allaire, stressed the immediate need, proclaiming;
“We are at a pivotal juncture in the US, and, as I frequently highlight, this is genuinely a chance for Congress to step up.”
Revolut and GameStop’s decisions, together with increasing apprehensions among leading figures in the industry, mark an essential crossroads in the growth of the cryptocurrency sector in the United States. This pivotal period demands calculated, reflective, and firm regulatory decisions.
How the US navigates this challenge could profoundly influence the future direction of the digital asset industry, affecting not only the domestic sphere but also resonating on a global scale.