Topic: Bitwala aims to be a bank (Read 304 times)

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.

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:


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

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.

"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.

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.

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.

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

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.

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.

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!

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?

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.

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.

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!