German online bank N26 said on Thursday it would begin allowing some customers in Austria to trade cryptocurrencies, in its first foray into the asset class.
N26 said it would expand the service to clients elsewhere in the coming months and eventually facilitate the trade of almost 200 cryptocurrencies.
The Berlin-based bank has teamed up with Austria’s Bitpanda for the trades and custody of coins, but Bitpanda doesn’t have a licence for Germany, a hurdle for N26 offering the service in its home market.
The price of major cryptocurrencies such as bitcoin and ether has fallen sharply this year as a broader downturn in global markets prompted investors to ditch risky assets.
The crypto asset sector is largely unregulated in most countries and regulators have warned investors face a high risk of losses. The European Parliament is expecting to vote on groundbreaking new rules for crypto assets in December or early 2023.
“The purchase of crypto assets constitutes a high risk and may result in the loss of the money spent,” N26 said in a footnote of its announcement.
N26 co-chief executive Valentin Stalf said cryptocurrencies were nevertheless “a requested and interesting asset class”.
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Cryptocurrencies are typically traded on exchanges outside of the traditional financial industry, but large banks have increasingly started to offer crypto-related services to clients in recent years.
The market capitalisation of all cryptocurrencies is around $960 billion, according to CoinGecko data, with more than $2 trillion having been wiped off since its peak in November last year.
N26 last week reported a wider loss for 2021 and a slowing in customer growth, capping a year of setbacks for one of Europe’s most valuable fintechs.
In September of that year it was fined by Germany’s financial regulator for lapses in money-laundering controls.
It was later ordered to limit the number of new customers it takes on, and it closed its U.S. operations.
N26 says it has improved its controls.
