Bitwala has announced the launch of a new banking service featuring real debit cards, with its application pending before Germany's Federal Financial Supervisory Authority (Bafin). Upon approval, customer funds will be guaranteed up to €100,000. This move follows the suspension of the company's prepaid Visa cards earlier this year.
New Banking Service: Bridging Crypto and Fiat
Blockchain-based payment service provider Bitwala revealed on Monday that it is building an online bank account service, 'enabling a seamless transition between the crypto and fiat worlds.' The account combines 'all the features of traditional banking with the crypto economy,' the company added, noting that they aim to introduce the new Bitwala accounts to the world within the next few months. Currently, Bitwala boasts over 57,000 users across more than 200 countries. Prospective customers can pre-register for the upcoming service.
Bitwala detailed: '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… Your funds up to €100,000 will be guaranteed.' The company stated that Bitwala accounts will be fully regulated by Bafin, and its application is currently pending. With Bafin's approval, the deposit guarantee scheme of German banks will guarantee customers' funds up to €100,000 (approximately $123,000).
Bitwala claims that its accounts 'will be the perfect solution for those seeking secure and crypto-friendly banking services.' Customers will be able to buy and sell cryptocurrencies as well as manage their daily expenses and set up direct debits.
Debit Cards: Lower Fees, Higher Limits
The new Bitwala accounts will come with a contactless debit card linked to customers' accounts. 'We will be issuing a contactless debit card, enabling you to spend your funds instantly in shops, online and at any ATM,' the company explained. Balances will be immediately available on the debit cards. Furthermore, the company says that debit cards will have 'much lower fees and higher spending limits' compared to the prepaid cards previously offered.
Prepaid Card Crisis: Visa Pulls the Plug
Bitwala formerly offered prepaid cards denominated in EUR, issued by Wavecrest Holdings Limited. However, on January 5, the company announced that its prepaid cards had been disabled. 'Our Bitwala Card issuer Wavecrest Holdings Ltd received direction from Visa Europe to immediately suspend all Bitwala cards effective immediately,' the company wrote. In a statement to CNBC, Visa said it had terminated Wavecrest 'from our network for violating Visa's operating regulations,' confirming it had required the company 'to close its Visa card products, some of which were linked to cryptocurrency wallets.' Alongside Bitwala, Wavecrest provided the same services to other crypto companies including Cryptopay, Wirex, and Tenx, all of which saw their cards invalidated.
The new banking service marks Bitwala's shift from relying on third-party issuers to building a regulated banking infrastructure under German oversight, aiming to restore user trust with enhanced security and regulatory protection.
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