Revolut to allow retail traders invest in bonds with just €100
Revolut is gearing up to open the gates of the bond market to its European customers, with plans to introduce government and corporate bond trading by early next year.
The London-based fintech giant, which already expanded its trading portfolio to include European stocks this October, aims to make the multi-trillion-dollar bond market more acessiable for the average retail trader.
Revolut Securities Europe’s CEO, Rolandas Juteika, told Financial News that the service is slated to launch in the first quarter of 2024, noting the current allure of the bond market amidst rising interest rates. This move positions Revolut as one of the pioneering UK fintech companies to extend such an offering.
Traditionally, the bond market has been somewhat exclusive, often requiring substantial capital investment. Juteika, who doubles as the head of wealth and trading for the European Economic Area at Revolut, highlighted the steep entry barriers, especially for US dollar bonds which typically demand a minimum of $100,000. Revolut plans to slash this minimum to a more accessible €100.
With the global bond market valued at approximately $133 trillion in 2022 as per Visual Capitalist, Revolut’s initiative could democratize access to a sector that has been largely dominated by institutional investors.
The proposed bond trading feature will not be limited to government bonds but will also encompass corporate bonds from high-profile companies such as Apple and Wells Fargo, offering a broad spectrum of investment opportunities for Revolut’s traders in the European region.
This move is part of Revolut’s larger strategy to diversify investment choices for its users. The platform now encompasses more than 70 European stocks, over 2,200 companies traded in the US, and around 150 Exchange Traded Funds (ETFs). All these investments can be tracked directly through the Revolut app.
Britain’s most valuable start-up faced delays in securing a UK banking license, partly due to concerns raised during the publication of its long-delayed 2021 accounts in March 2023. At that time, BDO LLP, the UK’s fifth largest accounting firm, said it had been unable to fully verify nearly £500 million of revenues, adding that “the risk of an undetected material misstatement was unacceptably high” due to the configuration of Revolut’s internal IT systems.
Britain’s Financial Conduct Authority (FCA) is also investigating whether Revolut allowed money to be withdrawn from accounts flagged as suspicious by the National Crime Agency.