Bitwala aims to be a bank

[alyssa85]

https://www.bitwala.com/bitwala-bank-account-coming-soon/

We are excited to announce that we are building a German online bank account for the blockchain generation, enabling a seamless transition between the crypto and fiat worlds. We aim to introduce the new Bitwala accounts to the world within the next few months.

In the next few months, we will be building a full-fledged German bank account that will come with a German IBAN, BIC along with a real debit card from MasterCard. Bitwala accounts will be fully regulated by The Federal Financial Supervisory Authority of Germany (BaFin) (current application pending), meaning your funds up to €100,000 will be guaranteed, in our case by the deposit guarantee scheme of German banks.

Bitwala accounts will be the perfect solution for those seeking secure and crypto-friendly banking services. We’re hard at work to launch an online bank account that combines all features of traditional banking that you are familiar with an entirely new crypto-first current account.

You will be able to buy and sell cryptocurrencies alongside managing your daily expenses and setting up direct debits.The best of both worlds, all in one place.

The new Bitwala account will come with a debit card that is linked to your account (no more bitcoin prepaid cards!). This means that the balance on your Bitwala account will be immediately available on your Bitwala contactless debit card as well. Having the new card will also mean that you will have much lower fees and higher spending limits. No more top-ups or card loads necessary!

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[1Referee]

Overall, I like the idea itself and this is what might push crypto adoption further eventually, but I am more worried about how external parties will react to this service, because they certainly do depend on external parties quite a lot. MasterCard & Co are known to be pretty hostile towards anything having to do with crypto, so it will be interesting to see if they can get it working to begin with. If they don't even manage to settle basic license agreements with external parties, it won't be working at all.

It's not for nothing that they, although it being in smaller letters, mention;

Bitwala prepares the legal documents to meet the legal requirements to conduct banking business and to provide financial services in Germany. Currently, Bitwala neither conducts any banking business nor provides any financial services in Germany. All products described on this site are not offered at the moment but will probably be offered once Bitwala has launched.

I am a person adding a lot value to the saying actions speak louder than words, and that definitely applies here.

[buwaytress]

Yeah, necessity is the mother of invention, isn't it? The Visa saga must have been too much to deal with so they opted to go for their own banking license. Seems like this will be the new way to go for all these old giants of payment gateways, and with neo banks all the rage now, we'll see plenty more coming along with their own "whitelabel" debit card solutions. Can't be happening quick enough, competition needs to be fiercer cause I'm happy with the solutions I have already but wouldn't mind options to keep things (and fees) interesting.

Overall, I like the idea itself and this is what might push crypto adoption further eventually, but I am more worried about how external parties will react to this service, because they certainly do depend on external parties quite a lot. MasterCard & Co are known to be pretty hostile towards anything having to do with crypto, so it will be interesting to see if they can get it working to begin with. If they don't even manage to settle basic license agreements with external parties, it won't be working at all.

I have been wondering if there's any direct challenger to Visa and MC - every debit card solution eventually relies on their systems. We've had a blockchain-based tech to displace Swift already (Ripple), why not something to displace Visa/MC and co?

[Sellingaccs]

I have been a user of bitwala for like around a year and a half, and they were alot better than their competitors. However wave crost holdings was a poor banking partner, since there were so many failed card loads alot of time for all the debit card providers. I already signed up for the bitwala and im on the waiting list. Also im happy about the fact they will have lower fees as well, because loads got really expensive eventually.

[1Referee]

I have been wondering if there's any direct challenger to Visa and MC - every debit card solution eventually relies on their systems. We've had a blockchain-based tech to displace Swift already (Ripple), why not something to displace Visa/MC and co?

Ripple has great financial backing from all sorts of parties in the financial world, likely due to its centralized nature. In order to at least become a potential challenger for MasterCard & Co, the support from the financial world is very important, and for that reason I believe that at this point, Ripple is closer to potentially achieve it than any other decentralized crypto will ever be. It's not for nothing that Western Union is testing Ripple to transfer value from one place to another. Does it mean that decentralized cryptos don't stand a chance? Nope, but it will be very difficult for a coin as Bitcoin to get adopted by MasterCard. It contradicts their entire core business, and for that reason I don't think it will happen, at least not any time soon.

I however believe that Bitcoin doesn't need to actually get adopted by MasterCard to gain more importance. If LN allows Bitcoin users to move value from one place to another instantly and basically for an ultra low fee, people will flow in and start transacting right away, and potentially even ditch MasterCard & Co. And if eventually turns out that MasterCard is losing market share due to Bitcoin taking over the market, they might still adopt Bitcoin to avoid their own downfall. If you can't beat them, join them!

[richardsNY]

And if eventually turns out that MasterCard is losing market share due to Bitcoin taking over the market, they might still adopt Bitcoin to avoid their own downfall. If you can't beat them, join them!

We aren't all that far away from this to become reality. If there are enough LN nodes and open channels allowing people to transact with their favorite merchants, it will basically take away the need for an expensive payment option such as MasterCard. Instead of merchants paying up to 3% per transaction, they pay a fraction of that initially with LN, which will significantly contribute to a higher overall income from sales annually. From there I am looking forward to how MasterCard is going to deal with LN, because just like Bitcoin is, LN forms another threat, but one with far more weight. So yes, as you pointed out, they at a later stage will very likely hop on board as well -- with enough adoption, it's a very realistic scenario.

[timerland]

I like the fact that they are actually working with a bank instead of just trying to be a bitcoin debit card.

A bitcoin debit card can essentially only be used to spend. But for the trader, you'd still have to receive and this German account with IBAN and everything included in the package is going to be great for any hardcore BTC traders out there.

Plus, deposits are actually insured, something that bitcoin debit cards don't really offer.

Though, I think that there will be lots of restrictions on who can get these accounts, probably EU only or something like that. Which isn't exactly helpful to people that actually needs these kinds of services in other non-supported countries.

[crazyivan]

This is all nice and dandy what Bitwalla aims to be.

However, this is one problem. 99% of Bitwala users have already switched their card to other card issuers. Wirex, which also aims to be a bank will deliver their cards in less then 2 weeks. Revolut s been having banking licence for month. So once I switch to another provider, why would I use Bitwalla again? This is a very competitive market and I choose what I do with my own money.

Losing the main card supplier without a backup was a very, very bad move.

[alyssa85]

This is all nice and dandy what Bitwalla aims to be.

However, this is one problem. 99% of Bitwala users have already switched their card to other card issuers. Wirex, which also aims to be a bank will deliver their cards in less then 2 weeks. Revolut s been having banking licence for month. So once I switch to another provider, why would I use Bitwalla again? This is a very competitive market and I choose what I do with my own money.

Losing the main card supplier without a backup was a very, very bad move.

Yes. They should have done this last year. Still, better late than never.

[buwaytress]

And if eventually turns out that MasterCard is losing market share due to Bitcoin taking over the market, they might still adopt Bitcoin to avoid their own downfall. If you can't beat them, join them!

We aren't all that far away from this to become reality. If there are enough LN nodes and open channels allowing people to transact with their favorite merchants, it will basically take away the need for an expensive payment option such as MasterCard. Instead of merchants paying up to 3% per transaction, they pay a fraction of that initially with LN, which will significantly contribute to a higher overall income from sales annually. From there I am looking forward to how MasterCard is going to deal with LN, because just like Bitcoin is, LN forms another threat, but one with far more weight. So yes, as you pointed out, they at a later stage will very likely hop on board as well -- with enough adoption, it's a very realistic scenario.

Now this was something I completely overlooked in the potential of LN... because that is exactly the sort of system that might just work, given enough adoption by merchants. I mean, all this while, they've been staying off Bitcoin because of confirmation times and fees, but if just staying within channels, they eliminate both fees and delays. I imagine that if even a small percentage of Visa/MC merchants become part of a widespread global network of LN, everyone would be paying (and accepting) in Bitcoin... it took years for Visa/MC to really take hold, shouldn't be much different for Bitcoin.

Now if someone would get some of these "Bitcoin cities" like Arnhem to start using LN..!

[exstasie]

https://www.bitwala.com/bitwala-bank-account-coming-soon/

Bitwala accounts will be the perfect solution for those seeking secure and crypto-friendly banking services. We’re hard at work to launch an online bank account that combines all features of traditional banking that you are familiar with an entirely new crypto-first current account.

You will be able to buy and sell cryptocurrencies alongside managing your daily expenses and setting up direct debits.The best of both worlds, all in one place.

This is exactly how I figured banks would enter the space. Custodial cryptocurrency wallets and fiat broker interface linked to your bank account. Bitwala is the first to break into this market.....good on them. They're sort of like the first generation of exchanges (who are apparently now being bought by Goldman Sachs and the like).

Good for onboarding new adopters. I'll probably stick with the status quo for a while until a reputable US bank starts offering this kind of service.

[richardsNY]

Now if someone would get some of these "Bitcoin cities" like Arnhem to start using LN..!

There is one way to convince world wide merchants to give Bitcoin a fair chance with LN fully deployed, and that's spending Bitcoin like how you spend your fiat money in grocery stores for example. The incentive from merchants to accept Bitcoin is all spending related, so the more we spend our coins, the more merchants will join, and thus the more merchants might ditch costly traditional payment services. I understand that people don't want to spend Bitcoin due to how the price might end up increasing, but we have to step away from this way of thinking. Easy solution for this is that when you do end up buying something with Bitcoin, you use your fiat to buy the same amount of Bitcoin back, so in case the price happens to move up, you still benefit from the increase in full effect.

[LeGaulois]

It has been on their roadmap for some time now. Germany is not so close-minded with cryptos compared to some others. I have been closely following their progress and to be honest, a white label is a good solution. Turning like N26 is the best they can do then. Neo banks are the future in banking and fintech, look even Orange which is one of the largest telecom providers, has his own neo bank now, with mobile. Even the supermarkets are turning their shoes in fintech

Wirex planned to do about the same, as I believe more will follow, I bet the future of web wallets will be like this

[buwaytress]

Now if someone would get some of these "Bitcoin cities" like Arnhem to start using LN..!

There is one way to convince world wide merchants to give Bitcoin a fair chance with LN fully deployed, and that's spending Bitcoin like how you spend your fiat money in grocery stores for example. The incentive from merchants to accept Bitcoin is all spending related, so the more we spend our coins, the more merchants will join, and thus the more merchants might ditch costly traditional payment services. I understand that people don't want to spend Bitcoin due to how the price might end up increasing, but we have to step away from this way of thinking. Easy solution for this is that when you do end up buying something with Bitcoin, you use your fiat to buy the same amount of Bitcoin back, so in case the price happens to move up, you still benefit from the increase in full effect.

Yes! And this is something I could criticise pure hodlers, who only accumulate and don't spend a drop of coin to build on the economy that actually does exist outside of trading markets. I'm all for the use of Bitcoin for other than trading, and am happy every time I can convince a client to switch over from something like Paypal to Bitcoin. I can't say it's been easy to do - but yeah, with LN due, there will be fewer reasons to not adopt Bitcoin.

And maybe I will never really see these "crypto-enabled" debit cards as a true means of expressing Bitcoin adoption, but if these are the bridges that we must cross before reaching an age where we're all using Bitcoin as the direct p2p payment system it was built to be, then so be it.

[alyssa85]

https://www.bitwala.com/bitwala-bank-account-coming-soon/

Bitwala accounts will be the perfect solution for those seeking secure and crypto-friendly banking services. We’re hard at work to launch an online bank account that combines all features of traditional banking that you are familiar with an entirely new crypto-first current account.

You will be able to buy and sell cryptocurrencies alongside managing your daily expenses and setting up direct debits.The best of both worlds, all in one place.

This is exactly how I figured banks would enter the space. Custodial cryptocurrency wallets and fiat broker interface linked to your bank account. Bitwala is the first to break into this market.....good on them. They're sort of like the first generation of exchanges (who are apparently now being bought by Goldman Sachs and the like).

Good for onboarding new adopters. I'll probably stick with the status quo for a while until a reputable US bank starts offering this kind of service.

The traditional banks seem slow to enter the space, so I reckon the "new" banks will be companies like Bitwala and Coinbase. By the time the traditional outfits wake up to what is happening, Coinbase will have achieved Amazon like dominance over the space.

[maeusi]

That could solve many problems to cash out cryptocurrencies, because there were issues on crypto debit cards and also traditional banks, which sometimes blocked funds, coming from crypto exchange services. The more services and cooperating banks we have, the more acceptance cryptocurrencies get.

[exstasie]

This is exactly how I figured banks would enter the space. Custodial cryptocurrency wallets and fiat broker interface linked to your bank account. Bitwala is the first to break into this market.....good on them. They're sort of like the first generation of exchanges (who are apparently now being bought by Goldman Sachs and the like).

Good for onboarding new adopters. I'll probably stick with the status quo for a while until a reputable US bank starts offering this kind of service.

The traditional banks seem slow to enter the space, so I reckon the "new" banks will be companies like Bitwala and Coinbase. By the time the traditional outfits wake up to what is happening, Coinbase will have achieved Amazon like dominance over the space.

I considered that, and to an extent you are correct. Coinbase certainly seems to be aiming to be a full service financial institution. They own their own bank and they're going the full-blown compliance route.

However, think about how startups work. VCs tend to fund early high-risk operations, before higher tier investment banks scoop up high-potential companies. Goldman Sachs bought a major stake in Circle three years ago. Now Circle has acquired Poloniex. There will be more of these cases.

I don't think the traditional banks are asleep, either. This is what Bank of America said recently:

"Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies," Bank of America said in a regulatory filing.

The company added that widespread adoption of new technologies in financial services, including cryptocurrencies, "could require substantial expenditures" in order to adapt to evolving industry standards and consumer preferences.

That's the same Bank of America that has filed more cryptocurrency patents than any other company. Like I said, they're not asleep.

[audaciousbeing]

While a lot of people are commending and happy about this move, I might have to take the negative side on this. I see it as misplaced priority and a complete deviation of what bitcoin is all about. When the traditional banking system is being introduced, regulated based on actions that bitwala will have to take before being issued the license to operate, then that is centralisation as against decentralization. One thing is certain in this arrangement, you won't have control of your private key and the moment that is present in this arrangement, every other thing is defeated because control is gone.

While, this is seen as a further step in the penetration of crypto into the mainstream, it further establish the fact that bitcoin cannot replace banks because no matter how much freedom it offers to detest the use of banks, it won't happen because they will always find a way to feature in the future.

This is exactly how I figured banks would enter the space. Custodial cryptocurrency wallets and fiat broker interface linked to your bank account. Bitwala is the first to break into this market.....good on them. They're sort of like the first generation of exchanges (who are apparently now being bought by Goldman Sachs and the like).

Good for onboarding new adopters. I'll probably stick with the status quo for a while until a reputable US bank starts offering this kind of service.

The traditional banks seem slow to enter the space, so I reckon the "new" banks will be companies like Bitwala and Coinbase. By the time the traditional outfits wake up to what is happening, Coinbase will have achieved Amazon like dominance over the space.

I considered that, and to an extent you are correct. Coinbase certainly seems to be aiming to be a full service financial institution. They own their own bank and they're going the full-blown compliance route.

However, think about how startups work. VCs tend to fund early high-risk operations, before higher tier investment banks scoop up high-potential companies. Goldman Sachs bought a major stake in Circle three years ago. Now Circle has acquired Poloniex. There will be more of these cases.

I don't think the traditional banks are asleep, either. This is what Bank of America said recently:

"Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies," Bank of America said in a regulatory filing.

The company added that widespread adoption of new technologies in financial services, including cryptocurrencies, "could require substantial expenditures" in order to adapt to evolving industry standards and consumer preferences.

That's the same Bank of America that has filed more cryptocurrency patents than any other company. Like I said, they're not asleep.

[alyssa85]

While a lot of people are commending and happy about this move, I might have to take the negative side on this. I see it as misplaced priority and a complete deviation of what bitcoin is all about. When the traditional banking system is being introduced, regulated based on actions that bitwala will have to take before being issued the license to operate, then that is centralisation as against decentralization. One thing is certain in this arrangement, you won't have control of your private key and the moment that is present in this arrangement, every other thing is defeated because control is gone.

While, this is seen as a further step in the penetration of crypto into the mainstream, it further establish the fact that bitcoin cannot replace banks because no matter how much freedom it offers to detest the use of banks, it won't happen because they will always find a way to feature in the future.

Bitcoin is nearly 10 years old, and the fact is, only hardcore nerds seem able to cope with having their own hardware wallets and being their own banks.

The general public wants something easy to operate. Just as they don't really know how their phones work, they don't really know how bitcoin works and don't care.

In the 1990's the big leap forward in PC use was Microsoft Windows 1995, which had a easy user interface. Before that, you had to type C:dos/run and actually give your computer commands, and most people couldn't cope and PC adoption was low.

It was the same story with email. People couldn't cope with having their own website and email which they controlled through a cpanel. It wasn't till the big cloud operators offered yahoo email, hotmail and gmail that email took off.

If we want adoption, we have to dumb things down. And getting a banking licence and linking wallets to bank accounts is part of that.