An Italian challenger bank today announced the addition of features that let customers buy, sell, and store Bitcoin. The crypto company responsible, Conio, claims that the bank, Hype, is the first to integrate a fully fledged crypto wallet.
Challenger banks are online only bank accounts, set apart from their traditional counterparts by shiny apps, cheap cross-border transaction fees, and, most recently—cryptocurrencies.
And the integration by Hype, an Italian challenger bank with a million customers, is the equivalent of jamming the Coinbase app into a bank account.
Hype is a challenger bank based in Italy. Image: Shutterstock.
“Banks feel threatened by cryptocurrencies and, like all big organizations, have a natural tendency to resist change. But this time innovation is impossible to stop: it is akin to trying to stop the wind with your hands,” Christian Miccoli, co-founder of Conio, told Decrypt.
Among other challenger banks doing the same thing are Ziglu, a (soon-to-be-released) challenger bank started by a former founder of Starling (another, UK-based challenger bank) and Revolut, a challenger bank with a $5.5 billion valuation, based in London’s Canary Wharf.
All benefit from something called an e-money license, which grants the banks the power to handle cryptocurrencies alongside traditional fiat offerings.
Though they all offer crypto, and sure look similar (see near-identical websites below), they’re completely different under the hood.
Vincenzo Di Nicola, Conio’s other co-founder, told Decrypt that while Revolut “may give the impression to manage Bitcoin,” customers can “neither receive Bitcoin, nor can transfer them: it’s a walled-garden approach that actually defeats the purpose of a cryptocurrency.”
Conio, on the other hand, gives users their own crypto wallet, including a private key. This gives customers “full access and control of his/her cryptocurrencies: s/he can buy/sell, and send/receive to other wallets,” said Di Nicola.
Conio’s software uses three keys for each wallet. One key is held on the customer’s smartphone, another on Conio’s servers, and the third kept offline by Hype, divided among different bank employees. Two keys are needed to authorize transactions, and the bank doesn’t control Conio).
Released under quarantine, Hype may already have its first use case for Bitcoin. “People are now becoming more and more cautious of coins and paper money, since there is a fear these may spread the disease. In this scenario, a digital currency may offer cleaner solutions for the future,” said Di Nicola.
And for Di Nicola, based in Milan, launching today is “a matter of pride.” It shows that, no matter the bleak circumstances, Milan and Italy are very alive.