High inflation and rising interest rates are making digital currencies like Bitcoin increasingly difficult. Over the summer, the price of the oldest crypto asset fell to its lowest level in a year and a half. The founder of the online bank N26, Valentin Stalf, still believes in the future viability of cryptocurrencies. The online bank is now collaborating with the Bitpanda crypto platform and launching the product “N26 Krypto”.
According to Stalf, 40 percent of N26 customers in Austria already invest in or are interested in crypto. Due to the high demand, the online bank is now introducing a product that allows around 200 cryptocurrencies to be traded in its own app. The offer will initially start in Austria. It will then expand to other core N26 markets over the next six months. The founder of N26 left open how much money the online bank has spent on this, and how much the new product should sell in the future.
The online bank N26, founded by two Austrians in Berlin, recorded an annual loss of 172.4 million euros last year. The Viennese financial company Bitpanda was the first Austrian start-up worth more than a billion euros (“Unicorn”), but had to cut its workforce by a quarter in June due to the current crypto crisis.
N26 founder believes in crypto future
For the founder of N26, the drop in price of digital currencies in recent months is not an indication that they are not sustainable. “Of course we saw a difficult year for crypto,” said Stalf. But it was also difficult for the financial market as a whole. The demand for cryptocurrencies is still high. “I do believe that cryptocurrencies will continue to exist in the future and that customers will invest there as well”.
According to the founder of N26, crypto products are often the entry point to money or asset investments for many. “For many people, crypto products are their first trading experience,” says Stalf, “We see that this is a good asset class to introduce people to the subject.” In Central Europe, the focus of savings products remains on the savings account, which is problematic in a low interest rate environment and against the background of rising inflation. ‘Actually, you should think much more carefully about whether you can make other provisions for your old age’, says Stalf.
Crypto Industry Needs Huge Amounts Of Electricity
However, many also have a critical view of digital currencies from an environmental point of view. In view of the looming climate catastrophe and the general shortage of energy, politicians and environmentalists are increasingly questioning the enormous power requirements for the maintenance of cryptosystems. According to Stalf, it depends on the type of cryptocurrency and the mining process.
Ethereum, the second most important cyber currency after Bitcoin, announced in mid-September that it had reduced its own electricity needs by 99.95 percent with a software update. Still, according to the founder of N26, more effort is needed. “I do believe that we also need more transparency in the field of sustainability in the crypto sector in the coming years,” said Stalf. As an individual bank, however, he cannot do much about this.
The founder of N26 sees progress to better regulate cryptocurrencies in the future. “That’s always good, of course, because then I have competition and uniform standards. Clear European regulations in the crypto sector are of course beneficial for customers, but at the same time beneficial for institutions,” says Stalf.
New EU rules provide for a licence
According to MEPs, representatives of the EU Parliament and EU countries agreed on a set of rules called “Markets in Crypto Assets” (MiCA) in early July. It is scheduled to enter into force at the end of 2023. The rules stipulate, among other things, that companies wishing to issue and sell cryptocurrencies in the EU will in future require a license from a supervisory authority in an EU country.
With this license, the companies can serve their customers in all 27 member countries. The supervisory authorities of the countries must report to the European Financial Market Authority ESMA any major market participant that they have granted authorisation. Currently, providers only need to prove to a national regulator that they have adequate controls in place to prevent money laundering. However, you can only work in this country.
Regulations must also take climate change into account. For example, crypto companies must disclose the impact of their cyber currencies on the environment and climate change. Standards drawn up by ESMA are used.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
