Digital bank N26 launches crypto trading service amid bear market

European digital bank N26 announced Thursday that it will launch cryptocurrency trading services. The first market is Austria.

The service, called N26 Crypto, will be available to N26’s Austrian clients in the coming weeks and will initially include 100 tokens, including: Bitcoin and ether. N26 plans to roll out this feature to users in other markets over the next six months, eventually expanding its token offering to include a total of 194 coins.

Gilles BianRosa, chief product officer at N26, told CNBC that the bank’s crypto brokerage feature allows users to “dip their toes in a non-foaming way.”

To make a trade, a user selects a coin and specifies the amount they wish to buy or sell. Once the order is completed, the cash will be deducted from your main account balance and displayed together with the selected token. Customers can drag and drop funds from their main account to their crypto portfolio and vice versa, according to N26.

Berlin-based N26 is a bit of a latecomer in the cryptocurrency rush.Fintech rivals PayPal and Revolut have long provided users with the ability to buy and sell digital assets and payment maestros visa When master Card We also sell crypto and so-called “Web3” services to our clients. Wednesday, Brazilian digital bank Nubank Launch your own tokencalled Nucoin.

Our users are very interested in cryptocurrencies, Bianrosa said in an interview. Even in a bear market, that interest remains very high.

N26’s foray into crypto could have been better timed. Bitcoin and other tokens have continued to lose money this year as investors fled the market over concerns about rising interest rates and liquidity constraints. Main Street banks have shunned cryptocurrencies due to fears of steep volatility and involvement in fraud, but the N26, which holds an EU banking license, says cryptocurrencies are more than just a fad. We have stepped into this field from the belief that it is a thing. “

“I want to take a pretty long-term view on this,” Bianrosa said. We are not trying to time our launch according to market trends.

N26 charges a 2.5% commission on all cryptocurrency buy and sell orders, except Bitcoin, which offers a discounted transaction fee of 1.5%. For subscribers with a paid Metal account of 16.90 ($16.54) per month, transaction fees are 1% for Bitcoin and 2% for all other tokens.

This functionality is powered by Bitpanda, an Austrian cryptocurrency and stock trading app. Equity with N26 backer Peter Thiel as an investor Bitpanda pockets a commission for each transaction processed through N26. N26 said it plans to support trading other asset types over time.

The move may offend regulators. Wiping out a $2 trillion market this year. The European Union, in particular, is trying to crack down on the Wild West of cryptocurrencies. Receiving rule It is expected to strengthen investor protection regarding digital assets. N26 had previously had its growth restricted by German financial watchdog BaFin, citing problems with its fraud prevention system.

We have a very strong working relationship with all of our regulators, so obviously we have let them know of our plans, they are aware, they are aware of all the regulatory needs for this market. We’ve got it covered,” Bianrosa said.

A BaFin spokesperson said the company did not comment on individual banks, but generally stated that banks have legal and other obligations to prevent money laundering, even when trading with crypto assets. We must comply with all banking supervision requirements.” The Austrian Financial Market Authority, which oversees the market where N26 will first launch cryptocurrency services, said questions about the move should be directed to BaFin.

Notably, N26’s crypto services do not include support for custodial wallets, so customers cannot move their assets out of the platform. Platforms such as Robinhood and Revolut Features introduced More recently, users have been given more control over their crypto assets.

BianRosa said this creates a “closed investment loop” where users’ assets are sealed in a controlled environment. This is a feature that some of crypto’s biggest proponents might say is at odds with the technology’s decentralized roots. I’m here. Clients are required to complete an identity verification check before they are eligible to conduct crypto trading.

N26’s head of product said, “It’s not like you can convert bitcoin and buy something from the dark web with your wallet assets.

N26 is one of Europe’s largest fintech companies, $9 billion valuation in its latest funding round last year.However, like any fintech, the company lose moneyN26 posted a net loss of 172.4 million ($168.8 million) in 2021, up 14% from the previous year.