The gap between cryptocurrency and the banking industry is shrinking.
For instance, Bitwala, a German crypto banking startup, has begun rolling out their mobile banking app. Users who own an Android or iOS device can begin experimenting with this new functionality. The services are available across the entire European Economic Area. Clients in 31 countries can obtain a German bank account which includes a Bitcoin wallet and trading support. The creation of an account takes just minutes, according to the company. This would make it on par with opening a traditional bank account in one’s own country.
The bank accounts will be provided courtesy of solarisBank. This licensed entity will protect deposits of up to 100,000 euro for all clients. The Bitcoin balances associated with the account will remain in control of the user. Funds are deposited in a multi-signature wallet. This also serves as an extra layer of protection.
“Onboarding is now directly integrated into the app,” said Bitwala CTO and co-founder Benjamin Jones. “Once you have an account, you can seamlessly integrate your daily banking activities – whether in bitcoin or Euro – into your everyday life.”
This service distinguishes Bitwala from other centralized cryptocurrency platforms. Exchanges do not allow customers to own their private key. As such, those users are never in full control of their funds. Bitwala aims to do things very differently. They focus on giving users full control of their wallet at any given time. Furthermore, Bitwala’s wallet will offer peer-to-peer transfers. Users can also offer QR codes to request payments from others. Bitwala also features a multi-signature wallet.
Customers have the option to enable biometric account authentication – a rather rare feature in today’s cryptocurrency industry still dominated passwords and two-factor authentication.
This news comes on the heels of other crypto banking services receiving regulatory approval. In Switzerland, FINMA has issued licenses to SEBA Crypto AG and Sygnum AG. Both firms received capital market and securities dealer licenses. But, although the licenses were granted in August, neither bank has received permission to publish its prospectus. They will be fully licensed next month after which they will be able to issue, manage, store, and trade cryptocurrencies like Bitcoin and Ether and convert fiat currency to crypto. The banks will also be able to offer brokerage, custody, and tokenization services for digital assets.
For now, the main focus lies with Bitcoin and Ethereum. Those two markets are still the biggest by market cap to this very day. Additional functionality comes in the form of converting fiat currencies to Bitcoin and Ethereum.
“We have been approached over the past few months by many parties who hold a lot of cryptocurrencies and look for a fully regulated bank,” Sygnum co-founder Mathias Imbach explains. “One of their biggest challenges is to find banking specialists to connect them to the real world, to pay their taxes, their employees’ salary.”
Further down the line, additional crypto banking services may be offered by either company. That will not happen until they fulfil their “secondary criteria”, though it is unclear what those criteria entail exactly. Without completing this step, SIGMA will not allow either Swiss firm to become a full-fledged bank.
“It’s a sign that regulators are taking the topic seriously,” Guido Buehler CEO of SEBA, told Cointelegraph. “The ice is broken — services relating to digital and traditional assets are now centrally accessible within a strict regulatory framework. This will boost the blockchain industry and allow existing and new companies to create new value and business.”
Banking and cryptocurrency regulations is evolving on multiple fronts. In July, the New York Department of Financial Services created a division to research financial technologies, as well as being “responsible for the licensing and supervising” of crypto-assets and institutions in the space.
“The financial services regulatory landscape needs to evolve and adapt as innovation in banking, insurance, and regulatory technology continues to grow,” said NYDFS Superintendent Linda Lacewell in a statement.