Online brokerage company Robinhood announced the launch of a new cryptocurrency trading feature in the European Union.
Notably, it marks a significant step beyond the United States, reflecting the company’s strategy to tap into international markets for growth.
Robinhood reflects its commitment to enhancing its cryptocurrency services and providing customers with a broader range of options.
The newly unveiled crypto platform will enable users to buy, sell, and hold over 25 tokens, such as bitcoin, ether, ripple, cardano, Solana, and polka dots.
The platform plans to expand its token offerings and introduce features like the ability to transfer and earn rewards through crypto staking by 2024.
This marks Robinhood’s second significant expansion beyond the US. Recently, the company revealed its intention to introduce stock trades for UK customers by early 2024.
The waitlist for this service was opened last week in the UK, where customers can anticipate yields of up to 5% on their deposits.
Robinhood Targets Crypto Market Growth in the EU
Robinhood aims to entice EU users by offering the opportunity to earn free Bitcoin. Users who actively trade and refer the app to friends can receive up to one bitcoin.
The reward is determined based on a percentage of their monthly trading volume and the number of users they successfully refer to during sign-up.
Thus, the initiative reflects Robinhood’s strategy to attract and incentivize users in the European market.
Several prominent US crypto firms are seeking growth in the European Union amid regulatory challenges in the United States.
Facing scrutiny from regulators such as the US Securities and Exchange Commission(SEC), companies like Coinbase and Binance have been subject to lawsuits alleging violations of securities laws.
This trend stresses the appeal of the European market for crypto businesses navigating regulatory complexities.
On the other hand, the European Union has put forth a comprehensive regulatory framework known as the Markets in Crypto-Assets regulation.
This proposal aims to introduce more stringent rules for crypto trading platforms and issuers of stablecoins—tokens tied to real-world assets such as the US dollar or euro.
The move reflects a proactive approach to address regulatory concerns and establish a structured framework for the crypto market.
Johann Kerbrat, the general manager for Robinhood Crypto, noted that the EU was selected as the initial international target market for its crypto product.
This decision is attributed to the region’s pioneering development of the world’s first comprehensive set of laws specifically tailored for the cryptocurrency industry.
Robinhood’s strategic choice indicates the importance of regulatory alignment in shaping its global expansion plans.
Robinhood Promises a Secure Crypto Platform
Robinhood is emphasizing transparency and security features in its European crypto offering to encourage users to trade on its platform.
The company commits to transparently displaying spreads on trades, revealing details such as the rebate the firm receives from sell and trade orders.
This focus on openness and security aims to build trust among users and differentiate Robinhood in the competitive crypto trading landscape.
Robinhood assures users that it never mixes customer coins with business funds, except for operational necessities like covering blockchain network fees.
The company emphasizes the secure storage of all customers’ coins in cold wallets that are disconnected from the internet.
This commitment to segregation and secure storage aligns with Robinhood’s dedication to safeguarding customer assets in the realm of cryptocurrency trading.
Robinhood has implemented a crime insurance policy to safeguard a portion of assets held in its storage systems against losses resulting from theft, including cybersecurity breaches.
This policy, underwritten by Lloyd’s, the renowned insurance marketplace, provides an additional layer of protection for customers’ assets, demonstrating Robinhood’s commitment to security in the face of potential risks.
Crypto Security Challenges
Crypto theft has posed a significant challenge for the industry in recent years, with major hacks targeting blockchain networks and resulting in the loss of millions worth of digital coins from users’ wallets.
In a recent incident, platforms associated with high-profile entrepreneur Justin Sun, namely the HTX exchange and Heco bridge, were hacked, resulting in an estimated $115 million in losses.
Such security breaches highlight the ongoing vulnerabilities in the cryptocurrency space.
Last year, the blending of roles between trading venues and custodians became a significant issue.
The downfall of FTX, a once $32 billion crypto exchange, unfolded as its sister market-making firm, Alameda Research, admitted to using customer funds for speculative bets on specific tokens.
This revelation led to the collapse of FTX, highlighting the risks associated with blurred lines between trading platforms and custodial responsibilities in the cryptocurrency industry.
Read More: US Unemployment Rate Edges Up Amid Recession Concerns
BlackRock Strategist Calls Market Expectations for Fed Rate Cuts in 2024 ‘Overdone’