German neobank Bitwala has partnered with Celsius to offer its customers an annual interest of up to 4 percent on their Bitcoin deposits.
According to the official announcement this week, Bitwala has become the first fiat bank to offer any interest on Bitcoin holdings.
Notably, many decentralized finance (DeFi) platforms offer much higher interest rates of up to 8.6 percent per annum, however, none of them have obtained any traditional regulatory license like Bitwala.
The Berlin-headquartered neobank is leveraging Celsius’s loan facility to distribute interest on crypto deposits.
In an official statement, Ben Jones, CEO at Bitwala, said: “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.”
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The platform is allowing its customers to purchase Bitcoins for as low as €10 (around $10.8) and earn a weekly interest payout. The announcement also highlighted that there are no additional fees for the platform’s services.
“Interest rates are calculated by Celsius on a weekly basis, based on the demand for Bitcoin by their institutional borrowers,” the neobank detailed.
Banking for crypto users
Launched in 2015, Bitwala offers digital currency storage services and also provides a physical debit card. With over 80,000 customers, the firm’s main aim is to bridge the gap between the traditional banking system and the crypto economy.
According to Crunchbase, the platform raised over $21 million over the years and is backed by G1 Ventures, Global Brain Corporation, NKB Ventures, and Sony Financial Ventures.
With a license from German bank SolarisBank AG, Bitwala offers crypto and fiat services in 32 European countries.