EU bank customers can earn interest on Bitcoin deposits
Bitwala has announced that an interest-bearing Bitcoin account is now being offered to its European customers to provide passive income on Bitcoin deposits.
The neobank based in Germany, in partnership with Celsius Network, is now allowing its customers to buy and deposit Bitcoin with the bank and earn interest, paid weekly, of up to 4.3% per annum. The Bitcoin deposited in the bank accounts are loaned out by Celsius Network to the credit market. This is an interesting offering given the rise in decentralised finance (DeFi) networks offering interest on fully blockchain enabled loans - by permitting those holding Bitcoin to earn passive returns the bank may well be able to lend out the Bitcoin into DeFi systems at a rate greater than that they are offering customers and turn a tidy profit, while depositors don't have to worry about custody of their Bitcoin and can have confidence of a bank holding their Bitcoin (or at least having the reserves to give an equivalent amount of Bitcoin back when requested).
Ben Jones, CEO of Bitwala said:
Bitcoin is the gold standard for the Internet of Value... At this time, more and more people trust in Bitcoin. Bitwala is the everyday bridge to it. We are now partnering with Celsius Network, the world's leading provider of crypto loans, so that our customers can leverage Bitcoin holdings wherever they are.
The Bitcoin interest-bearing account is available to 32 European countries with accounts hosted by solarisBank AG based in Berlin. Solarisbank is is supervised by the German Federal Financial Supervisory Authority.
We are likely to see an increase in regulated financial products involving digital currencies globally as financial market participants recognize the value in increased automation and efficiency which blockchain brings, and the ongoing rise in digital currency use by the broader public.