Bitwala to transform into actual bank after partnership with a German bankMarch 1, 2018
Crypto companies making investments into banks is a trend that is picking up and we have come across such developments back to back in the last two days.
First we came across reports that Barry Silbert of DCG buys Silvergate Bank and now we have come across reports that Berlin based bitcoin start-up, Bitwala, is making progress towards transforming into an actual bank with the usual direct debit services, IBAN accounts and a MasterCard debit card, after entering into a partnership with an unnamed German bank.
The announcement was made by Bitwala wherein they confirmed their plans while also revealing that accounts opened at their bank will be fully regulated by The Federal Financial Supervisory Authority of Germany (BaFin) (current application pending). Accounts in fiat currency will have a guaranteed protection of up to €100,000.
Once the bank launches, customers will be able to buy and sell bitcoin directly from the bank account. Bitwala is going to add more cryptos in the following months.
According to Jörg von Minckwitz, Co-founder and CEO of Bitwala, they intend to work towards their vision of bridging the gap between traditional and crypto economies and that’s what their bank will enable them to do.
As an EU based bank, customers will be able to use SEPA transfers in and out of the account, which are usually instant. Bitwala however does not hold the crypto private keys, they would not therefore be covered by deposit guarantees, but fiat funds up to €100,000 will be covered.
Bitwala is one of a number of companies that have now started either outright buying banks, founding banks, or partnering with them, in a move to address anti-competitive practices where blockchain companies find their bank accounts closed for no other reason than that they are a crypto/blockchain start-up.
Becoming a full on bank would allow them to do so far easier, and perhaps cheaper, just as it might make Bitwala the go to place for a bank account if you run a blockchain start-up or even if you’re just a cryptonian.