[2019-08-31] Bitcoin bank accounts now available to European citizens

[Dionisio]

Berlin-based crypto banking startup Bitwala has announced the launch of their bitcoin banking app for iOS and Android.

Customers in all 31 countries of the European Economic Area can now open a German bank account, with integrated bitcoin wallet and trading, within minutes, said the company in a statement.
Benjamin Jones, co-founder, and chief technical officer of Bitwala, said in the statement that “Onboarding is now directly integrated into the app. Once you have an account, you can seamlessly integrate your daily banking activities - whether in bitcoin or Euro - into your everyday life.”

The company said that all bank accounts will be hosted by solarisBank, a licensed German bank supervised by the Federal Financial Supervisory Authority (BaFin), and deposits up to €100,000 will be protected by the German deposit guarantee scheme.

Customer Bitcoin balances, according to the company’s chief financial officer Christoph Iwaniez, are “booked directly on the Blockchain via a multi-signature wallet,” allowing customers to be “fully in control of their wallets at all times.”

In other words, unlike many centralized bitcoin exchange platforms, Bitwala customers hold their own private keys.

The Bitwala wallet also allows peer-to-peer transfers, payment requests via QR code, and gives users the option of authorizing transfers using biometrics.

Account-holders receive a free debit Mastercard that can be used for contactless payments and free withdrawals at over 40 million locations worldwide, and pay a one percent fee on bitcoin trades.

Bitwala was founded in 2015 in Berlin and at present employs a team of more than forty.


https://finance.yahoo.com/news/bitcoin-bank-accounts-now-available-184131158.html

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[Carlton Banks]

"Bitcoin: be your own bank"

it's a bit like politicians; you'd be crazy to actually trust somebody who actually wants to be a bank


we don't need politicians to represent our interests (they don't anyway)

we don't need banks to keep our money safe (they don't anyway)

[Dionisio]

Yep... your keys, your money
no keys, not your money...

[buwaytress]

Hey, I like having as many options as possible to liquidate my bitcoins too, but if it's asking me to trust my bitcoin with someone else, and to trade with what surely must be a poor rate (or good rate with hefty commissions), I'm sticking to my current means, thank you.

Not knocking Bitwala in any way, actually the news took me by surprise, thought they had stopped their debit card service a while back, but why is this bitcoin bank account so special?

[joelsamuya]

Should we be rejoicing with this integration of the banking system with Bitcoin or should we proceed with great caution, as usual? As for me, I am not against innovation and convenience as what Bitwala can be providing here though I am having some doubts on whether this can be working at the end. Any way, the bottomline will always be the market and how they gonna react to this offer. One Bitwala can succeed on this feature then there is a possibility other platform can also be adopting the same. That can be good news generally...

[Carlton Banks]

Customer Bitcoin balances, according to the company’s chief financial officer Christoph Iwaniez, are “booked directly on the Blockchain via a multi-signature wallet,” allowing customers to be “fully in control of their wallets at all times.”

This part sounds to good to be true, without any details, i would assume the bank either :
1. generate private key and give it to user
2. giving user closed source wallet and send the private key to their server

what it probably means is that either:

• user has 1 key, and Bitwala have another, 1 key unlocks user wallet
• user has 1 key, and Bitwala have 1 key, a 3rd key is held by an "independent arbitrator" (approved by Bitwala or German banking regulator etc), 2 keys needed to unlock user wallet

and it's probably the latter option.

in other words, the 2nd or 3rd keys will be used to "keep depositors safe". Of course, that can also stop the user from being able to withdraw their own money as the see fit. But Bitwala will (naturally) say "we only prevent withdrawals if we detect untoward behavior with a customer account", which can mean anything they want it to in practice

whatever multi-sig scheme they're using, it means only one thing: you need them to agree when you spend "your" money

dunno about you folks, but that doesn't correspond to my definition of "my money", it belongs as much to Bitwala as it does to me.

welcome to bitcoinbank, banks 2.0

[1Referee]

Should we be rejoicing with this integration of the banking system with Bitcoin or should we proceed with great caution, as usual? As for me, I am not against innovation and convenience as what Bitwala can be providing here though I am having some doubts on whether this can be working at the end.

It's just trash in my opinion. If you combine banking with Bitcoin, the bank (that abides by the laws all financial institutions are subject to) decides for you what you can and can't do with your coins. If you transfer funds to a service/person the bank doesn't like because it might put them in a bad position, they will boot you off their platform and probably flag you as a user to avoid.

If you like less freedom and a financial institution that for you to decide who you can and can't transact with, then this is the way to go.

[rodel caling]

This actually  a pretty great news meaning bitcoin in europe is very accessible to the people by the government implementation to improve the availability of bitcoin holders using this ne bitcoin banks.

[BitHodler]

dunno about you folks, but that doesn't correspond to my definition of "my money", it belongs as much to Bitwala as it does to me.

welcome to bitcoinbank, banks 2.0

It's a gimmick meant to give people a false sense of security. If Bitwala really cared about giving the control back to the people, they would offer a service far different from their current business model.

People need to look through this, and definitely not get hyped up because it looks like they will contribute to more adoption. I'm not against centralized services in general, but this is purely them deceiving the ignorant joes.

People first say f-you to banks, then welcome them just because they do something with Bitcoin or other cryptos. By the same logic it means that when the legacy banks adopt Bitcoin, they suddenly become good guys.

[hatshepsut93]

If they will allow users to automatically convert Bitcoin to fiat while paying with their Mastercard card, they'd be a direct competitor for BitPay, which might be a good thing. But it raises so many questions, how are customers in control of funds if the bank needs to control those funds too to execute transactions? And what fee will they use when they do this currency conversion - BitPay is known for being very annoying to deal with when fees are high. This can put people into situations when they'll have to pay $5 fees when they try to pay with this Bitcoin card for a $3 coffee.

[Kakmakr]

In other words, unlike many centralized bitcoin exchange platforms, Bitwala customers hold their own private keys.

https://finance.yahoo.com/news/bitcoin-bank-accounts-now-available-184131158.html

Yes, customers might hold their own private keys, but are they sharing that Private key with the Bitwala service? People will only have control over their Private key, if they have sole control over that Private key and if that Private key was not logged onto some centralized server. 

I like the fact that it is backed by a Bank that are "Bitcoin friendly" when you want to on-ramp from Fiat to Bitcoin and visa versa, but storing coins in a centralized system, is never a good idea. 

Centralized services just bleed customers for extra fees and they pose a real danger, because people can lose coins when these services are targeted by hackers. 

[o_e_l_e_o]

If they will allow users to automatically convert Bitcoin to fiat while paying with their Mastercard card, they'd be a direct competitor for BitPay, which might be a good thing.

They don't. Their debit card will spend from customers' fiat balance only. If they want to spend their bitcoin, they will first have to trade their bitcoin on Bitwala's exchange, wait for the fiat to show up in their bank balance, and then use their debit card. The only advantageous step here is that the user doesn't have to do an exchange-to-fiat bank transfer, which as we all know, can takes days. Bitwala says the fiat funds will be credited within the hour.

And what fee will they use when they do this currency conversion

Their website states trading fees are 1%.

This can put people into situations when they'll have to pay $5 fees when they try to pay with this Bitcoin card for a $3 coffee.

No one will be spending bitcoin "on the go" with this card, since they will have to wait up to an hour for the bitcoin to convert to fiat first before they can use it via the card. You will have to sell your bitcoin in advance, and then just spend fiat as you would normally. Given this, it seems ridiculous that you would give up both your privacy and the ownership of your coins, just so you don't have to withdraw from an exchange manually and let Bitwala process it automatically instead. A huge price to pay for the sake of saving yourself several minutes of time.

[pixie85]

It's not a bitcoin bank. It's a normal fiat bank with an integrated bitcoin wallet. Looks pretty much like Revolut which allows you to set up a UK bank account online with an ability to withdraw in most EU ATMs and convert to cryptocurrencies and a number of fiat currencies. Now we have a competition from Germany. The more the merrier

[gentlemand]

It's not a bitcoin bank. It's a normal fiat bank with an integrated bitcoin wallet. Looks pretty much like Revolut which allows you to set up a UK bank account online with an ability to withdraw in most EU ATMs and convert to cryptocurrencies and a number of fiat currencies. Now we have a competition from Germany. The more the merrier

Revolut only offers price exposure to crypto, you can't deposit or withdraw it.

If the need for fiat banking goes stuff like this will look impossibly quaint. Until then it certainly serves a purpose. I wonder how long their banking will last though. Lots of places that make big banking claims often wind up flaking out within a few months.

[Carlton Banks]

I wonder how long their banking will last though. Lots of places that make big banking claims often wind up flaking out within a few months.

Bitwala were doing interviews talking about negotiating a banking license 2-3 years ago. One gets the impression that one party wanted something the other wasn't happy with, until someone changed their mind. No negotiation takes multiple years unless something like that is going on behind the scenes.

I wonder what happened? My guess would be that the regulators had all the negotiating power, and Bitwala gave up something pretty extraordinary to get the deal. The company board at Bitwala is probably now stuffed with banking industry cronies, and their CTO is probably straight out of the German equivalent of the NSA (or someone who worked for them surreptitiously in the banking industry).

The final bitch-slap will be left until Bitwala have been running a few months; their negotiations counterpart at the German banking regulator will change the conditions out from under their feet, putting even more weight on their own side of the see-saw (aka the ejector seat move ). This happens with so many startups in so-called free market capitalism, "compliance" turns into a take-over.


so when a company in a high profile business goes bust very quickly, either they were crooks, or they were eaten by regulators, and preferred to self-destruct the company than let the psycho-chimps steal it

[anoufal]

It's convenient. I hope more and more countries will allow crypto to be introduced into everyday life

[hv_]

It's convenient. I hope more and more countries will allow crypto to be introduced into everyday life

Agreed, but as with drugs only one or two might be passing all the regulatory burdens and get fully legally.

[Oceat]

Why would someone had to be a bank if you are the bank of your own money? It's just like you are putting your Bitcoin to another exchange site promising to hold it for you yet you know what would happen next. I'm not gonna send my Bitcoin onto them...ever. Be your own wallet, your keys, your Bitcoin, no ones ever controlling or taking it away from you.

[Das]

I think Bitwala is trying to bring crypto newbies into the system.Most newbies would prefer to store their coins with a safe custodian till they're able to learn the ropes themselves.

[hv_]

Why would someone had to be a bank if you are the bank of your own money? It's just like you are putting your Bitcoin to another exchange site promising to hold it for you yet you know what would happen next. I'm not gonna send my Bitcoin onto them...ever. Be your own wallet, your keys, your Bitcoin, no ones ever controlling or taking it away from you.

Bitcoin is rather a financial protocol

Not a bank