N26 Crypto will allow users to buy and sell 100 tokens including bitcoin and ether.
N26
European digital bank N26 announced on Thursday that it will launch a cryptocurrency trading service, starting with Austria as the first market for the product.
The service, called N26 Crypto, is set to be available to N26’s Austrian customers in the coming weeks and will initially include 100 tokens including bitcoin and ether. N26 plans to roll out the feature to users in other markets over the next six months and eventually expand its token offering to include 194 coins in total.
Gilles BianRosa, product manager for N26, told CNBC that the bank’s crypto brokerage feature allows users to “dip their toes in the water in a way that doesn’t foam.”
To make a transaction, users select a coin and specify the amount they want to buy or sell. After they complete the order, the cash will be deducted from their main account balance and appear with the token of their choice. Customers can also “drag and drop” funds from their main account into their crypto portfolio or vice versa, N26 said.
Berlin-based N26 is a latecomer to the crypto craze. Fintech Rivals PayPal and Revolut have long offered their users the ability to buy and sell digital assets and payments Passport and Master Card also sell cryptocurrencies to their customers and so-called “Web3” services. On Wednesday, Brazilian digital bank Nubank launched its own tokencalled Nucoin.
“Our users are extremely interested in crypto,” BianRosa said in an interview. “That interest rate is still super high, even in a bear market.”
N26’s crypto breakout could be more timed. Bitcoin and other tokens are in the red this year after investors fled the market due to concerns about higher interest rates and liquidity constraints. While the main street banks have shied away from cryptocurrencies due to concerns about high volatility and involvement in fraud, N26 – which holds an EU banking license – is dipping its toes into the space because of the news. that it’s not just a “fad”. “
“We wanted to take a pretty long-term view on this,” BianRosa said. “It’s not like we’re trying to time the launch to see how the market is doing.”
N26 is charging 2.5% for buy and sell orders on all cryptocurrencies – except bitcoin, which it offers at a reduced transaction fee of 1.5%. For subscribers to its paid Metal account, which costs 16.90 euros ($16.54) a month, the transaction fee is 1% for bitcoin and 2% for all other tokens .
This feature is powered by Bitpanda, the Austrian cryptocurrency and stock exchange app share N26 Peter Thiel backers as an investor – with Bitpanda pocketing a commission for every transaction processed through N26. N26 said it plans to support trading of other asset classes over time.
The move could upset regulators, who have been much more strict in their approach to cryptocurrencies after… 2 trillion dollars wiped out the market This year. The European Union in particular has sought to crack down on the “Wild West” of cryptocurrencies, with rules come is expected to increase investor protection around digital assets. N26 was previously placed restrictions on its development by BaFin, Germany’s financial watchdog, due to flaws in the alleged fraud prevention system.
“We have a very close working relationship with all the regulators, so obviously we informed them of our plans, they knew and we responded,” said BianRosa. all the legal needs we have for this market.
BaFin was not immediately available to comment on N26’s crypto ambitions, which the company has publicly stated previously. The Austrian Financial Markets Authority, the market watchdog with which N26 first launched its cryptocurrency service, did not immediately respond to a request for comment.
Notably, N26’s crypto service does not include support for custodial wallets, meaning customers cannot move their assets off the platform. Platforms like Robinhood and Revolut have introduced features giving users more control over their crypto assets lately.
BianRosa says this creates a “closed investment loop” where user assets are sealed in a controlled environment. It’s a feature that some of the biggest cryptocurrency advocates can say stands in stark contrast to the technology’s decentralized roots. But N26 argues that this offers better protection for its users. Customers must perform an identity verification check before being eligible to conduct cryptocurrency transactions.
“It’s not like you can convert those bitcoins and buy something from the dark web with those assets from your wallet,” said N26’s product manager.
N26 is one of Europe’s largest fintechs, scoring $9 billion valuation in its most recent funding round last year. However, like other fintech companies, the company lost money. N26 posted a net loss of 172.4 million euros ($168.8 million) in 2021, up 14% year-over-year.
