Bitpanda, a Viennese fintech with around one million users and more than 100 employees, is expanding its business model. The Austrian Financial Market Authority has granted Bitpanda Payments GmbH a license as a payment institution in accordance with European regulations like PSD2. Based on this milestone, Bitpanda will announce new features and products in the coming months, the company said.
Bitpanda as a bridge for digital assets
Their goal is to bridge the gap between the modern and traditional finance worlds. The concession as a payment institution allows them to overcome existing hurdles. Says Philipp Bohrn, one of the two managing directors of Bitpanda Payments GmbH. Previously, Bohrn was managing director of the German Financial Services Association for nine years.
Lukas Enzersdorfer-Konrad, former head of digitization and innovation at the Raiffeisen banking group and now second director, agrees that they want to build a bridge for digital assets and allow their users to pay anywhere with them. With the license, they are a pioneer in Europe to provide convenient and innovative products and features on the Bitpanda platform.
Bitpanda CEO Eric Demuth adds, ” We are very pleased that Bitpanda is one of the few European crypto currency fintechs that has received such a license. It’s a big step toward our vision of building an open, innovative investment platform.”
Bitpanda wants to become Austria’s first Unicorn
Bitpanda went online in December 2014, then under the name Coinimal. The company now has over 100 employees and a million users. The trading volume in 2018 was one billion euros. Demuth said, “We are, what is unusual for a fintech, profitable for several years. We have done all this with organic growth from our own hands. We did not have to go begging anywhere. Even in the time of the crypto winter, the company had grown and hired employees. We are also planning to stay in Vienna and now I lean far out of the window to become Austria’s first unicorn.”
What the PSD2 license is used for
The PSD2 license was requested because it also allows some fun beyond the crypto assets, Demuth says. According to Carina Wolf, head of the legal department at Bitpanda, the concession means that it is now possible to provide convenient payment options with digital assets. The concession was requested in four months record time although Bitpanda with quite exotic scenarios approached the FMA, as Wolf says.
Specifically, the license includes three facts according to Wolf. The payment business, the financial transaction business and the payment initiation services. Specifically, this means, among other things, that one no longer relies on third party providers to establish the interface between the fiat and crypto worlds. According to Wolf now they can offer the Fiat services themselves for the first time and thus have a certain independence. In addition, their customers can take advantage of them crypto and Fatzahlungsservices.
In the future, you can theoretically pay your electricity bill in cryptocurrencies, as well as transfer a fiat money to a friend with the Bitpanda wallet. Theoretically, the Bitpanda Wallet could also be used in future as a salary account. But would have to be created for a corresponding structure, the employer must approve of this. But you do not have an IBAN there yet the legal basis, i.e., the bank concession, is missing.
Possible co-operations with the banks
Enzersdorfer-Konrad says, in addition, they are driven by an open platform idea in product development. You can build many solutions yourself, but you also look for cooperation.
Demuth had previously ruled out cooperation with established financial institutions yet, now he is no longer too closed to the topic. Some financial institutions have already approached Bitpanda and now you can imagine integrating solutions, it says from the management. Here, too, PSD2 could play a role in the future: From autumn, banks must open certain interfaces for third-party providers.
Potential for real estate and precious metals
Demuth said their vision is not to sell a few cryptos, but to shake up the financial market. Nothing has happened in that time. Bitpanda will build new services for professional traders in the coming months, as well as expand the B2C business. In general, it is conceivable to digitize various assets from the Old Economy. The vision is that anything of value can be digitized, says Demuth. In New York, for example, a tower has been digitized, adds Wolf. The first classic asset class will be digitized in the coming weeks.
The company is still silent about which assets it will act exactly. For example, according to Demuth, precious metals are also an interesting topic, especially since they are known to everyone, but are also very illiquid. Digitization makes sense here, and theoretically it has another advantage. You could break the assets down into smaller digital parts. Instead of buying over $ 1,000 for an ounce of gold, you could buy just a hundredth of an ounce for a fraction of the price.