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Neobanks: the race on crypto

Photo of: Joseph Stone
by Joseph Stone

The war of neobanks in the crypto race is raging. This time, it’s German institution N26 that wants to offer bitcoin and other cryptocurrency trading opportunities to its customers by the end of 2021. It absolutely wants to catch up with its British competitor, Revolut.

A June 21 article from the German media outlet Finance FWD had reported on N26’s expansion plans in the cryptocurrency space. The Berlin-based neobank plans to offer its customers the ability to buy and sell bitcoin (BTC) and other cryptocurrencies by the end of 2021.

A company spokesperson later confirmed to The Block that the company plans to launch cryptocurrency trading tools. For this, it is working with “leading crypto exchanges”. However, no names were revealed.

The latter also pointed out that the neobank was planning to:

“(…) offer crypto functionality via a marketplace, integrating elements of a crypto exchange, within N26’s banking and budgeting features.”

To do so, the company is reportedly expanding its “dedicated marketplace team.”

N26 aims to become a “one-stop-shop” that will allow its customers to access all financial services – savings, loans, transactions, tax, cryptocurrencies – in one place. It effectively needs to catch up with Revolut in the crypto space. The British neobank had already announced in April the addition of 11 new tokens, bringing the total number of crypto-currencies it offers its customers for trading to 21. In addition, Revolut has been offering its customers the ability to trade bitcoin since 2018.

N26 has every incentive to dive into cryptocurrencies given Revolut’s latest financial results. Its recently unveiled accounts show that Revolut made a $54 million gain on digital assets in 2020, even though it posted net losses for the entire operation.

Neobanks aren’t the only ones seizing the opportunity offered by cryptocurrencies. Some giant banks are splurging on bitcoins, while continually criticizing them. So, despite the conclusions of the Bank for International Settlements (BIS) report on the irrelevance of new cryptocurrency regulations to protect investors, will traditional financial players ever take the plunge?