Digital bank N26 is entering the crypto world and will allow select customers to buy and sell cryptocurrencies on its app.
The Berlin-headquartered N26 will leverage Austrian crypto exchange Bitpanda’s trading and custody platform to give some of the bank’s customers access to up to 200 cryptocurrencies for trading including bitcoin (BTC), ether (ETH), Cardano's ADA and XRP.
The $9 billion European digital bank, which operates entirely online and doesn’t have traditional bank branches, hasn’t had the easiest couple of years despite its valuation, having failed to penetrate the U.K. and U.S. markets, and having to spend big on toughening anti-money laundering controls under pressure from regulators.
The bank is only offering crypto trading as a “wealth building feature” – meaning customers can buy and sell tokens, but cannot transfer the assets to other digital wallets, Gilles BianRosa, chief product officer at N26 said in an email to CoinDesk.
“This of course has a significant impact on security and fraud prevention,” BianRosa said, adding that the bank’s platform is a “non-anonymous crypto trading system” that has “strict eligibility criteria” on top of the bank’s existing know-your-customer requirements for onboarding customers.
To begin with, only N26 customers in Austria will be allowed to access crypto services. While the bank has plans to roll out the service to customers in other markets over the coming months, BianRosa did not specify which markets it will be expanding into.
“Right now, we are focused on rolling out the product in Austria, and will incorporate feedback from this for our gradual roll out to other markets,” BianRosa said.
The bank is using Bitpanda’s White Label product, which is already used by a financial service provider in Italy, and allows fintechs or banks to tap into Bitpanda’s 24/7 trading platform featuring hundreds of cryptocurrencies.
Earlier this month, reports surfaced that N26 was looking to buy Bitpanda in 2020, shortly before the startup was declared a fintech unicorn with a $4.1 billion valuation.
In a Financial Times report from January, N26 co-founder Max Tayenthal is quoted as saying he felt the bank tried to go global too quickly and that it had missed out on the crypto boom.
Now, as it enters crypto for the first time during a bear market – which also saw Bitpanda shed some of its workforce – N26 says its plans for crypto are “long-term.”
“We believe that cryptocurrencies are going to continue to be a prominent part of the financial ecosystem,” BianRosa said.
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