Bitwala offers European users a bank account that has a Bitcoin and Ethereum wallet integrated within, as well as the possibility to buy and sell Bitcoin and Ether seamlessly from within the app.
Bitwala has bridged the gap between traditional banking and crypto, creating a platform that offers a fast and low cost option to buy and send digital currencies but also accomplish your 'traditional' banking needs such as paying bills, receiving salary or making in-store transactions with their debit card.
The convenience of having your crypto wallet integrated in your bank account comes in handy when you want to move money quickly between crypto and euro. Instead of having to wait 2-3 days after selling your crypto like you would on a normal crypto exchange, Bitwala credits your Euro account within 30 minutes after you sold your crypto, making your assets extremely liquid. The platform is available across all mobile devices and is accessible from web browsers too. It currently supports Euro, Bitcoin and Ether with plans to add more cryptocurrencies in the near future.
Setting up an account with Bitwala grants users both an IBAN number and a non-custodial Bitcoin + Ethereum wallet. This allows users to not only receive salaries, bank transfers and pay bills the traditional way with their bank account, but to seamlessly convert those funds into crypto to store, trade and spend as needed.
However as Bitwala is a bank that complies with strict regulations, the onboarding process is more difficult than with normal crypto wallets. Users must upload a number of relevant documents and pass a video identification procedure. This might be a drawback for some privacy conscious crypto users but bear in mind that any cryptocurrency exchange will ask you to identify yourself!
Once approved, users must set up the wallet, which involves writing down a seed and backup phrase on paper. This step is really important and you should make sure you do this right or else you could lose access to your funds in an extreme event. You can read more on why this is important in the section on security.
The Bitwala bank account fulfills all the expectations that you might have towards a modern bank account in 2020. It’s mobile-first, nicely designed and secure.
Here is a breakdown of all the things you can do with the Bitwala bank account:
In addition to the bank account Bitwala offers you a Bitcoin and Ethereum wallet so you can store ETH and Bitcoin in the same app.
To access any of these wallets you just need to go into the portfolio tab and you’ll see your bitcoin and ethereum holdings displayed in the balance overview.
Like with any cryptocurrency wallet you can use your Bitwala wallets to send, store & receive cryptocurrency. To receive crypto funds with Bitwala, you need to open the tile of the cryptocurrency you want to receive and then tap the receive button. This will display your cryptocurrency address, which you can safely communicate to anyone who wished to send you funds.
To send it’s essentially the same procedure. You just need to tap on “send” instead of receive. Next you’ll have to enter the amount and the address to which you want to send the funds. To finish, you need to input the fee that you want to add to your transaction in order to get it processed by miners as well as your password to confirm the transaction.
To set the fee to a transaction the Bitwala wallet contains a feature called the "network fee slider". The network fee slider allows you to manually adjust the Bitcoin network fees associated with your transaction.
Generally, transactions with higher network fees are processed faster by the Bitcoin network. If you're not sure what fee you should set you can find real-time fee suggestions at the bottom of this page. It's important to note that Bitwala does not profit from network fees since they go directly to the miners.
The highlight of the Bitwala app however, is the integrated crypto trading feature that allows you to convert euros to crypto and vice versa. Because your bank account is integrated in the Bitwala app this process is extremely smooth. On a normal cryptocurrency exchange you have to wait several days until your euros arrive before you can start trading. The fee for trading is a flat 1% and a trade takes 30 minutes at most to complete.
The debit card is a great addition to the trading feature as it makes crypto funds in Bitwala instantly spendable in the real-world. No need to wait for several days for funds to arrive in your bank account. If you want to sell your crypto because you need to want to buy something you can simply trade your bitcoins for euros, which is completed in two taps through the trading tab. As soon as the trade is completed, your euro account will be credited by the amount of the sale and you can spend the money with your Bitwala debit card. Note, however, that this process can take up to 30 minutes which needs to be considered in advance for very spontaneous shopping trips.
For the conversion from crypto to euros, Bitwala charges a reasonable flat fee of 1%. You could find a cheaper rate (0.25%) if you'd go to an exchange like Kraken but Bitwala offers much more convenience by offering a great user-experience and making your crypto instantly spendable.
The other selling points about the Bitwala card that are worth mentioning is that ATM Withdrawals are free worldwide, excluding some foreign exchanges and independent ATMs that may charge their own fee, and there's no currency conversion fee when you travel outside of Europe and make purchases in foreign currencies. Moreover, you'll be pleased to know that there's no card order fee (although replacement cards cost €9.50) and no card activation cost. To see that these great conditions are not the norm, check out our guide on crypto cards.
As of recently, Bitwala also offers a crypto saving account. A crypto savings account allows you to invest your Bitcoin and earn interest on it. The feature is accessible in the Bitcoin wallet section of the app and investing literally takes three taps. You simply need to specify the amount, confirm it and wait until the transaction is confirmed. Once your Bitcoin is invested, you will receive weekly payouts (every Monday) of your accrued interest paid in Bitcoin. You'll also be pleased to know that there is no lockup period and the mimimum ivestment amount is €10 so it's really accessible to anyone.
In case you're wondering how this works, Bitwala partnered with a company called Celsius Network for this feature. Celsius is a specialized crypto lending company.
To generate interest, Celsius lends your assets to trusted instituational investors who naturally pay a fee to borrow them. Because, the loans are "asset backed", meaning that these borrowers have to deposit a security to get a loan, there is very little default risk. To date, Celsius has issued more than $6.2 billion dollars of loans without a single default.
To prevent someone from accessing your wallet, Bitwala implemented two-factor authentication meaning you'll receive an SMS-code every time you wish to log-in in addition to your email and password. On top of that, Face and Touch ID are implemented for everyday use, to facilitate fast and easy and authentications of transactions.
For the bank account, Bitwala partnered with the fully-licensed German Bank SolarisBank, which means that your Euro funds stored in your Bitwala account are protected up until €100.000 by the German Deposit Guarantee Scheme (DGS).
For its crypto wallet, Bitwala uses a technology called “multi-signature” provided by the leading crypto custody provider BitGo. A multi-signature crypto wallet is a wallet that needs several signatures to validate a transaction instead of just one, which is the standard for a bitcoin wallet. By requiring multiple signatures, the security of a wallet can be distributed to several stakeholders and as a consequence, funds are more safe. The specific variant employed by Bitwala is a “2- of 3 Multisig Wallet”, which means that there are three keys associated with your wallet and for a transaction to be valid, at least two keys must sign every outgoing transaction.
As with every non-custodial wallet, Bitwala nor any other party can access your funds. This is why you have to write down a main key and a backup key upon signing-up for Bitwala.
The main key exists in encrypted form on BitGo’s servers along with the third key. In a normal transaction, you will enter your password in the Bitwala app, which will decrypt the main key on BitGo’s servers and BitGo will add its own key to form the two keys needed for a valid transaction.
The reason why you need to have two keys is that if some extraordinary circumstance forces Bitwala to disappear or shut its operations, you want to continue to be able to access your funds. Bitwala allows you to do just that. Since you hold two keys yourself, you could simply transfer your bitcoins to another wallet and use them from that wallet thereafter. Note, that no one else than you can do this since you’re the only one having two keys! This is the magic of holding your coins on-chain.
Should this day ever arrive, you can find Bitwala’s recovery guide here which will show you where to enter your backup and main key in order to move your funds to another wallet. We won’t lie, the process is a little tedious and could be improved by state-of-the-art recovery procedures currently available (see our post on Smart Contract wallets ) but it’s still a net improvement over not having control over your funds at all as it’s the case with a traditional bank account.
For the most part, the user experience is pleasant. The app is well designed and the trading platform is free from complexities. However, the “send” flows in the wallet are in need of improvement. Here, users must choose the blockchain network fee theselves without any guidance. Recommending a fee that will get the transaction processed in a reasonable amount of time would improve this.
The customer support experience is commendable, with users having access to both live chat support, email outlets and a help desk on Skype.
One additional advantage of Bitwala being a “crypto native” bank is that they truly understand crypto so you don’t risk getting your account closed arbitrarily for engaging in trading, like some traditional banks have done in the past.
You may not like it, but some countries in the EU require its citizens to pay capital gain taxes on their crypto holdings. Bitwala makes this a hassle-free process thanks to its partnership with cryptotax.io.
This allows you to simply download an individualised, ready-to-use tax statement for all your Bitwala transactions with a click of a button from your dashboard. Filing you tax statements on your cryptocurrencies trades is as easy as attaching a PDF-file to an email.
If you live in Europe and want a reliable one-stop app to fulfill both your traditional finance as well your crypto finance needs, Bitwala is the way to go. We’re extremely excited for what the future holds for Bitwala as they have a large and motivated team and investors with deep pockets who want to make Bitwala the number one crypto bank in Europe.
If you want to hear from the founder and CTO of Bitwala himself, Benjamin Jones listen to our Cryptotesters podcast with Bitwala.