According to Bloomberg, the Prudential Regulation Authority has granted Revolut a permit with some restrictions, allowing the London-based company to enter the mobilization stage. This is a common step for many new banks in the UK. A full license will soon enable Revolut to offer overdrafts, loans, and savings products to its more than 9 million UK customers, joining other challenger banks like Monzo Bank Ltd., Starling Bank Ltd., and Atom Bank Plc, which aim to compete with traditional banking giants such as Barclays Plc and HSBC Holdings Plc.

This development is considered a significant step forward for Revolut and its customers, according to the UK Chief Executive Officer. With the license, Revolut’s customer accounts will be covered by the UK’s Financial Services Compensation Scheme, which protects deposits of up to £85,000 ($109,500) if a business fails. Revolut initially applied for a UK banking license in early 2021. The mobilization stage, which could take up to a year, allows the firm to test its systems as it gradually introduces new services.

Until the mobilization stage is completed and the UK bank is fully launched, Revolut’s UK customers will continue to be served by Revolut, a UK e-money institution regulated by the Financial Conduct Authority (FCA). Their funds will be safeguarded in accounts in accordance with the Electronic Money Regulations of 2011.