Digital Bank N26 launches crypto trading service in Europe
According to a report by CNBC, digital bank N26 launched a crypto trading service for customers in Austria. The service is called N26 Crypto and will allow users to gain exposure to the prices of Bitcoin (BTC) and Ethereum (ETH).
The crypto trading service will allow N26 customers in Austria to buy and sell over 100 different tokens. The digital bank, valued at $9 billion, plans to expand the service in the coming months.
The bank will expand its offer of crypto trading. It plans to list over 194 coins as the service grows. In addition, the digital financial institution will launch the service in other countries in the European Union (EU).
Eurozone regulators have been reluctant to approve a legal framework for crypto trading and cryptocurrency-based services. However, this status quo may change in favor of Virtual Assets Service Providers (VASP), but at the expense of those operations that are considered energy intensive, such as Bitcoin mining.
People still interested in crypto trading despite the downside pressure
N26’s Chief Product Officer Gilles BianRosa told CNBC that their newest crypto trading product would allow people to tap into digital assets within the “security” of their platform. Users will be able to gain exposure to digital assets, but they will not be able to transfer crypto to external wallets.
PayPal and Revolut, two of the world’s largest fintech companies, launched similar services with the same restrictions. Eventually they implemented support for users to buy and sell crypto with the ability to withdraw their assets to external wallets.
N26 may face regulatory hurdles in implementing this feature. The bank’s crypto trading service was envisioned as a “closed-loop investment loop” to comply with European regulations and prevent people from buying “something from the dark web with these assets from your wallet,” BianRosa said.
N26 Chief Product Officer added:
We have a very strong relationship with all the regulators, so of course we inform them of our plans, they are aware, and we have covered all the regulatory needs that we have for this market.
The executive claims that demand for crypto-based products is high, despite the current downside pressure in the nascent sector. In that sense, BianRosa said the financial institution believes digital assets will have a long-term impact on financial products.
Will crypto trading save N26’s finances?
Bitpanda will support the N26 Crypto service. The exchange will receive a commission for each crypto transaction at the bank.
The financial institution will charge a 2.5% fee to its customers for buying and selling crypto; Bitcoin will have a small fee of 1.5%. For users subscribing to the Metal account plans, crypto transactions will cost 1% for BTC and 2% for the rest of the digital assets.
The high fees may be part of a strategy by N26 to capture demand for digital assets and increase revenue. In certain parts of Europe, people have few options to gain exposure to Bitcoin and other cryptocurrencies.
The CNBC report claims that the digital bank is facing revenue problems. In 2021, N26 recorded €172 million in losses, an increase of 14% compared to 2020. Will the crypto trading service allow it to capture new users and increase revenue? Time will tell.
