European digital bank Revolut, the continent’s largest such institution with 13 million users, is close to applying for a U.S. banking license, according to a report by CNBC.
The FinTech, which claims London as home, is likely to apply for a charter with the Federal Reserve Bank of San Francisco and California’s Division of Financial Institutions within the next few weeks, people with inside information told CNBC.
Revolut is valued at $5.5 billion as of a funding round from last February, and the company is one of the new kinds of financial institutions operating in the digital realms and seeking to become a traditional institution.
Revolut’s bank charter will be with California, but it will allow the bank to operate anywhere in the U.S., with interstate agreements, according to the unnamed source, CNBC reports.
The nature of the market for FinTech startups breaking into the larger U.S. market for financial institutions is fragmented, with the most successful coming from ones like Chime and Current, which partnered with existing banks in order to make their offerings.
Square’s offering, by contrast, will be an industrial-loan company, supervised by the Utah Department of Financial Institutions and the Federal Deposit Insurance Corp., while cryptocurrency exchange Kraken Financial won a bank license in Wyoming last month, and state financial regulators have had a contentious debate with OCC regulators over a special charter for FinTech firms.
Revolut has seen losses tripling as recently as August, with $139.6 million losses total, with the company saying that happened because of expansions into new markets and debuts of new products. But while Revolut is one of the biggest players in the scene, the company has yet to make a profit.
In spite of that, the company’s revenues actually tripled last year, with a 180 percent boost and $80 million in new funding.
Revolut has already been doing business in the U.S., with the launch of its core banking program last March.