In a significant move for its global expansion, the trading platform Robinhood has officially launched its commission-free cryptocurrency trading application in the European Union. This follows closely on the heels of its recent introduction of stock brokerage services in the United Kingdom just last week.
The new service allows investors across the EU to buy and sell more than 25 different cryptocurrencies, including major assets like Bitcoin (BTC), Ethereum (ETH), and Solana (SOL). According to Johann Kerbrat, General Manager of Robinhood Crypto, the app went live on Thursday and is designed to make crypto investing accessible without the burden of trading fees.
Key Features of the European Launch
To attract and retain users, Robinhood is also rolling out a loyalty rewards program structured similarly to cash-back offers. Participants will receive a percentage of their monthly trading volume returned to them in Bitcoin, providing an additional incentive for active traders.
Unlike its approach in the EU, Robinhood does not have immediate plans to offer these crypto services to customers in the UK. The company cites a lack of regulatory clarity surrounding digital assets in the British market as the primary reason for this decision.
How Robinhood Generates Revenue
The company plans to sustain its commission-free model by earning rebates from market makers and trading venues. In Europe, these rebates are reportedly around 65 basis points per transaction—nearly double the 35 basis points the company earns on crypto orders executed in the United States.
This revenue strategy allows the platform to offer zero-cost trades to users while maintaining profitability through high-volume transaction flows.
Market Context and Timing
The launch comes at a time of renewed optimism in the cryptocurrency markets. Prices have been recovering amid expectations that U.S. interest rate hikes may soon reverse and due to progress toward the potential approval of the first U.S. spot Bitcoin ETF as early as next month.
In a recent investor update, Robinhood noted that cryptocurrency notional trading volumes increased by 75% in November compared to the previous month, signaling growing investor interest.
Despite this uptick, overall crypto trading volumes remain subdued compared to the retail investing frenzy seen during the COVID-19 pandemic. This broader downturn has impacted Robinhood’s performance; the company reported a year-over-year decline in third-quarter revenue, driven largely by a 55% drop in crypto trading activity.
Regulatory Landscape and Challenges
Since first introducing crypto trading in 2018, Robinhood has offered about 15 tokens on its platform in the U.S. However, the regulatory environment has grown increasingly stringent.
In June, the U.S. Securities and Exchange Commission (SEC) flagged several tokens—including SOL and Polygon’s MATIC—as unregistered securities. This led Robinhood to delist those assets from its U.S. platform.
The heightened regulatory pressure in the U.S. has prompted many crypto exchanges, including Coinbase, Kraken, and Gemini, to expand their operations overseas in search of clearer regulatory frameworks.
Future Plans for European Users
Currently, Robinhood’s European crypto users cannot transfer their cryptocurrency holdings outside the app. The company plans to introduce external wallet transfers in the coming year, along with support for additional tokens and staking services.
Robinhood has been registered as a virtual currency exchange operator in Lithuania since September of last year and is seeking authorization in more EU member states. Once the EU’s new Markets in Crypto-Assets (MiCA) regulation takes effect in early 2025, the company will need to obtain a full crypto service provider license in at least one member state to continue operations.
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Frequently Asked Questions
What cryptocurrencies can I trade on Robinhood in Europe?
You can trade more than 25 cryptocurrencies, including Bitcoin, Ethereum, and Solana. The platform plans to add more tokens in the future.
Why isn’t Robinhood offering crypto trading in the UK?
Robinhood cited a lack of regulatory clarity for digital assets in the UK as the main reason for not extending its crypto services there at this time.
How does Robinhood make money without charging commissions?
The company earns rebates from market makers and trading venues for routing trades through them. In Europe, these rebates are approximately 65 basis points per transaction.
Can I transfer my crypto to an external wallet?
Not currently, but Robinhood has announced plans to enable external wallet transfers for European users in the coming year.
What is the loyalty rewards program?
It is a Bitcoin-based rewards system that returns a percentage of users’ monthly trading volume back to them in Bitcoin, similar to a cash-back program.
How does EU regulation affect Robinhood’s services?
Robinhood must comply with the upcoming MiCA regulations by 2025, which will require it to obtain a crypto service provider license in at least one EU member country.