Reports suggest the Bank of England may reject the application of Revolut, a UK neobank that offers financial services that include crypto . Concern has been raised in the cryptocurrency community as Revolut has grown to prominence since its launch in 2015 . What will happen now?
Revolut Has Been Trying To Get A License For Two Years
Revolut has begun a two-year effort to gain a banking license in the United Kingdom to provide regulated deposits and lending products like mortgages . The Prudential Regulation Authority (PRA), which is part of the Bank of England has voiced concerns about Revolut’s financial stability . The PRA informed the UK Treasury in March that it planned to issue a statutory warning letter to Revolut mainly owing to worries about the company’s balance sheet . These questions were brought up when a qualified audit of past-due accounts was released the same month .
There might be serious repercussions for Revolut and the cryptocurrency sector as a whole if the company’s bid for a banking license is rejected . Although Revolut may keep its UK operations going, it will be unable to compete with more established banks by providing mortgages and loans to UK residents . As a result it casts doubt on Revolut’s financial management and undermines trust among investors and customers .
So What Does This Mean For The Crypto Industry?
Due to recent financial issues, Revolut’s financial statements are being questioned . The auditing firm BDO (who also audits Tether) expressed doubts about the accuracy of approximately £500m in revenue reported by Revolut owing to problems with the company’s internal accounting processes . As a result of these problems, consumers may no longer have faith in Revolut’s income claims or its claim of financial transparency .
If Revolut’s application is denied it might be a huge hurdle for the crypto industry as a whole . The decision by the Bank of England emphasizes the significance of openness and stability in the financial system particularly for businesses that use cryptocurrencies . How Revolut handles these obstacles and whether it can establish itself as a big role in the banking market remains to be seen . Revolut’s and the cryptocurrency industry’s fates hang in the balance over the next several weeks .
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