Austria

Mobile bank N26 launches cryptocurrency trading with Bitpanda partnership

N26 Crypto is already available for Austrian customers and is planned to be rolled out in other key markets.

The $9 billion-valuated German fintech N26 launched crypto trading on its mobile app. Starting from Austria and rolling out to other countries in the upcoming months, N26 Crypto will let its customers buy and sell 200 cryptocurrencies, including Bitcoin (BTC) and Ether (ETH).

The Berlin-based fintech announced on Oct. 20 that the launch in Austria addresses “strong local demand,” with 40% of N26 users either actively trading or having expressed interest in investing in cryptocurrencies. N26 plans to roll out its crypto trading service to other key markets in the next six months.

N26 customers with a verified identity can access N26 Crypto from the “Trading” section within their N26 app’s new “Finances” tab. Thus, they can buy crypto from their fiat bank account. The transaction fee is set at 1.5% for BTC and 2.5% for other currencies for the usual accounts with some extra discounts for N26 metallic card holders.

According to N26 co-founder and co-CEO Valentin Stalf, the company sees its new product as an entry point for a new generation of investors, who are interested in digital assets despite the recent market upsets:

“While cryptocurrencies have seen a decline in value over the last year, they remain a requested and interesting asset class for investors and a growing part of the financial system.”

The platform is maintained in a partnership with Vienna-based Bitpanda GmbH, which manages the execution of trades and custody of coins.

In November 2021, N26 announced its exit from the United States market and the intention to focus exclusively on the European market. However, the company faced some problems in Europe, too, with the German Federal Financial Supervisory Authority (BaFin) enforcing the new customer cap on the company in May 2021.

The state of crypto in Western Europe: Swiss powerhouse and French unicorns

From taxes and legislation to the local startups and professional associations — all you need to know about blockchain and crypto in Western Europe.

Despite the turbulence that broke out in the crypto market this summer, there is an important long-term marker that should be considered in any complex assessment — the combination of adoption and regulation. The latest report by EUBlockchain Observatory, named “EU Blockchain Ecosystem Developments,” tries to measure this combination within the European Union, combining the data on each and every member country from Portugal to Slovakia.

As the original report counts more than 200 pages, Cointelegraph prepared a summary with the intent to capture the most vital information about the state of crypto and blockchain in Europe. We started from a group of countries that are usually labeled as “Western European.”

Austria

Numbers: 50 blockchain solution providers, $48.72 million (50 million euros) in total funds raised

Regulation and legislation: A registry for Virtual Asset Service Providers (VASPs) was established by the Financial Market Authority a year later, in 2020. Regulators have adopted an “overall non-restrictive approach” toward crypto and blockchain and crypto mining remains largely unregulated.

Taxes: As is the case in most European countries, digital currency exchange is VAT-exempt. Capital gains from the sale of crypto are subject to a progressive income tax that amounts to up to 55% for individuals and 25% for corporations, but digital taxation policies may apply if the digital currency generates interest income and thus qualifies as an investment asset.

Notable initiatives: In November 2019, the Austrian Blockchain Centre (ABC) was created to explore blockchain applications in the fields of finance, energy, logistics, public administration and the Internet of Things. ABC, currently involving more than 21 institutions and 54 companies in its public-private partnership model, aspires to become the world’s largest blockchain research center. Blockchain is also a key facilitator of the Smart City Vienna and Open Government Data initiatives.

Local players: Bitpanda, a Vienna-based trading platform, which market value exceeded $4 billion in 2021, Blockpit, a digital assets investment platform responsible for more than $500 million traded in 2017, and Conda, a crowd-investing platform for Austrian startups.

Belgium

Numbers: 47 blockchain solution providers, 992 blockchain professionals.

Regulation and legislation: According to the report, there are currently “no specific laws or regulations” in Belgium. In 2017, Financial Services and Markets Authority (FSMA) published a communication on an overview of the legislation and regulations that may apply to Initial Coin Offerings (ICOs) and crypto assets.

At the same time, FSMA maintains a red list of fraudulent crypto companies. Nevertheless, utility token offerings are considered “a regular option” to raise capital. The FSMA characterizes crypto assets as investment instruments given that they may provide rights to revenues or returns, a means of storage and exchange given their convertibility into other assets or a utility token if they provide access to certain products or services.

From May 2022, registration for VASPs and custodial wallets is obligatory. The providers must fulfill certain conditions including status as a legal entity and maintaining minimum capital of 50,000 euros.

Taxes: Tax stands at 33% on any cryptocurrency income, depending on how the individual is investing. A mere increase of value over time escapes taxation, but the investor is obliged to prove their holding strategy. There is no specification on the required holding time.

Notable initiatives: “Blockchain for Europe” represents international blockchain industry players at the EU level, with a primary focus on participation in the regulatory debate. HIVE Blockchain Society is a nonprofit blockchain association whose aim is to promote the understanding of distributed ledger technology and to inform the Belgian and international community about its developments.

Local players: Keyrock, a company that develops crypto-asset financial infrastructure by means of scalable, self-adaptive algorithmic technologies, Credix, a decentralized credit marketplace powered by Solana blockchain technology, and Delta, a Bitcoin (BTC) and cryptocurrency portfolio tracker app.

France

Numbers: 160+ blockchain startups, $175.4 million (180 million euros) of fundraised revenue

Regulation and legislation: France established a friendly legal framework for ICOs in 2016, allowing issuers to register cash vouchers directly into the blockchain. In 2017, the Financial Market Authority (AMF) launched the digital-asset fundraising support and research program UNICORN. France also authorizes the registration and transfer of unlisted securities using blockchain technology.

Taxes: The country’s highest administrative court reduced the tax burden on profits coming from cryptocurrencies and set a flat rate tax of 30%.

Notable initiatives: The public Deposits and Consignments Fund makes direct investments in crypto projects. The fund has invested $292.3 million (300 million euros) in blockchain and AI in the European Commission’s Investment Programme for the Future.

Community self-organization: The French Digital Asset Association (ADAN) operates as a professional lobbying group on behalf of the industry.

Local players: Ledger, leading global cryptocurrency hardware wallet provider, Coinhouse, a crypto asset management and transaction services company, providing staking, saving and custody services, and Sorare, a fantasy football gaming platform that uses blockchain technology based on Ethereum.

Germany

Numbers: 343 blockchain startups

Regulation and legislation: Since 2013, virtual currencies have been the “units of account.” In 2020, Germany introduced the concepts of “crypto asset” and “crypto custody.” The latter requires a license from the supervisory body BaFin. Virtual currencies are not considered legal tender in the country and are generally treated as investment assets or so-called “substitute currencies.”

Taxes: In May 2022, Germany’s Finance Ministry has released new cryptocurrency tax guidelines with no tax payable on gains from BTC and Ether (ETH) sold 12 months after acquisition.

Notable initiatives: In September 2020, the Deutsche Energie-Agentur announced the launch of the Future Energy Lab. It involves, among other things, the pilot projects related to the application of blockchain technology in the energy sector, such as the Blockchain Machine Identity Ledger (BMIL) and the Smart Contract Registry. The BMIL is a digital and decentralized directory for device identities.

The same year one of the four electricity transmission system operators in Germany announced a multi-year strategic partnership with Energy Web that will focus on testing and validating the technological promises of blockchain-based solutions.

Community self-organization: Established in 2017, the Blockchain Bundesverband is a non-profit association with more than 60 members. The association’s initiatives focus on education for decision-makers and the wider public. Based in Munich, the European Blockchain Association provides an independent, neutral platform for blockchain-related communities and organizations to discuss, develop and elaborate on shared work.

Local startups: Iota Foundation develops an open-source protocol that supports data and value transfer between devices and humans, and BitsCrunch, a crypto-analytics company.

The Netherlands

Numbers: 160+ blockchain startups, $360.5 million (370 million euros) of raised funds.

Regulation and legislation: The central bank and the Dutch Authority for the Financial Markets (AFM) maintain a one-stop shop for regulatory information for startups called InnovationHub. There is also a regulatory sandbox for emerging technologies with a principles-based (rather than a rules-based) approach. Compliance is determined based on the intent of laws and regulations rather than their letter. A practice of partial authorizations, when a startup does not need to meet all the banking license criteria to obtain a license, is rather common.

Notable initiatives: During the COVID-19 pandemic, Tymlez launched a project to support the government’s transparency in medical supply chains through blockchain technology. There are projects in agriculture such as Blockchain for Agri-food, financed by the Dutch Ministry of Agriculture, Nature and Food Quality to improve supply chains.

Community self-organization: The report mentions meetup groups such as Blockchain Talks, Blockchain Netherlands, Food Integrity Blockchained, Permissionless Society Blockchains and Bitcoin Wednesday Amsterdam, as well as Ethereum Dev NL and Hyperledger Netherlands.

Local players: Bitfury provides mobile Bitcoin mining data centers, Aurus, a gold-backed cryptocurrency on the Ethereum blockchain, and Finturi, a blockchain-powered trade finance platform.

Switzerland

Numbers: $247.48 billion (254 billion euros) of the total valuation of the top 50 companies in 2021, 877 blockchain solution providers.

Regulation and legislation: In 2019, the Federal Council updated the existing framework conditions in relation to blockchain and crypto. In 2020, the Swiss Parliament passed the DLT blanket act, which selectively adapts 10 existing federal laws. In 2021, a license for DLT trading facilities was introduced.

According to the Financial Market Supervisory Authority (FINMA), digital currencies are categorized based on their function and purpose as payment tokens, utility tokens and asset tokens.

Taxes: Tax rules vary between the individual cantons. Digital currencies are generally treated as foreign currencies for the purposes of wealth taxation. Their exchange value is determined by the Federal Tax administration at the end of the year. Capital gains on digital currencies are exempt from income tax for individuals. Purchases with digital currencies are VAT exempt.

Notable initiatives: Blockchain has been used for issuing digital self-sovereign identities and even voting on the regional level, while digital currencies are accepted for paying taxes and public services. The city of Zug, the capital of the so-called “Crypto Valley,” launched its blockchain-powered digital identity program in 2017. In 2021, the Swiss government started a public discussion on self-sovereign identities on the national level. In 2022, the city of Lugano acknowledged Bitcoin and Tether (USDT) as legal tender.

Community self-organization: The Crypto Valley Association and Blockchain Federation are the major public entities for blockchain enthusiasts and entrepreneurs. There are also popular communities like the Swiss Association of Crypto Investors and the Bitcoin Association.

Local players: Switzerland by far exceeds all the other nations in the list when it comes to globally acknowledged crypto companies. It’s enough to mention that such players as Cardano, Polkadot, Cardano, Solana, Cosmos and Tezos are based in this country.

Key takeaways

Discussing the report takeaways with Cointelegraph, Nikolaos Kostopoulos, senior blockchain consultant at Netcompany-Intrasoft and member of the EU Blockchain Observatory and Forum team, compared the European regulatory dialogue to the one that takes place in the United States, highlighting the role of France:

“French regulators and policymakers are seemingly winning the course for a comprehensive, objective and holistic effort to establish the framework for a growing blockchain and digital assets industry. This effort is already validated by the decision of leading players such as Binance and Crypto.com which are heavily investing in their French HQ as their EU base, but also the fact that France is home to a few of the biggest EU blockchain startups.”

While France’s regulatory efforts stay in a larger EU context, Switzerland still leads the way in terms of attracting startups and creating the most welcoming legal environment for them. Kostopoulos believes that this unique position can’t simply be explained by the country’s century-old tradition as a safe haven for big money.

“There are numerous reasons that constitute Switzerland more advanced and progressive in comparison to countries such as Belgium or France. The country has established procedures, progressive financial legislation, human resources and infrastructure to support a framework to accelerate financial innovation,” he said.

Post offices adopting NFTs leads to a philately renaissance

Nonfungible tokens are being used to reinvigorate postage stamp collecting in Austria and the Netherlands.

Philately? If you are a millennial, there is a good chance you used Google to find out that there is a word dedicated to collecting and studying postage stamps.

This same search also paints the picture of a hobby in decline, as younger generations are increasingly preoccupied with their screens and the constant stream of dopamine hits served up by TikTok, Instagram, Twitter and other popular social media platforms.

Two European postal services have looked to capitalize on the popularity of nonfungible tokens (NFTs) in recent years to reinvigorate the philately sector. Cointelegraph caught up with Netherlands’ PostNL and the Austrian Post Office (PostAG) at the Blockchain Expo in Amsterdam to delve into their collaborative effort that has successfully married postage stamps with NFTs.

PostAG philately head Patricia Liebermann and PostNL product manager Sacha van Hoorn are a vivacious duo that has kindled a working friendship that seems to be the backbone of the NFT-powered renaissance of postage stamp collecting in both countries.

*Liebermann and van Hoorn at the Crypto Stamp stand during the Blockchain Expo in Amsterdam.*

PostAG first explored using NFT postage stamps in 2019 with real-world stamps issued with a digital twin NFT originally minted on the Ethereum blockchain. Over the next two years, Austria’s post office continued the project with near-field communication (NFC) chip functionality introduced in 2021 to further the functionality, verifiability and security of postage stamps.

Reflecting on the dimming interest in philately, Liebermann unpacked the initial idea and its quick uptake some three years ago:

“In 2019, we invented the idea of having a physical stamp combined with an NFT. It was mind-blowing, and we were overwhelmed with all that feedback. And that’s why we said, ‘Okay, there is a target group out there who is interested in this new way of collecting.’”

Van Hoorn’s efforts to continue innovating PostNL’s postage stamp offerings had already explored the use of augmented reality and artificial intelligence on stamps, but PostAG’s NFTs exploits led her to reach out to her Austrian counterpart. Knowing that development would take a significant amount of time and resources, a collaboration was formed:

“So, we actually decided to contact the Austrians because they were the first, and we really wanted to have their experience and their knowledge and ask them, ‘How did you do it?’”

The partnership has culminated in a joint launch of a new edition of Crypto Stamps, which is being labeled as a first-ever joint crypto stamp issuance. It is also the first edition of PostNL NFT stamps, with the stamps issued in a variety of respective colors of the Dutch and Austrian flags. The stamps also feature the respective countries’ national flowers, with tulips and edelweiss in the background of the PostNL and PostAG stamps.

*PostAG and PostNL Crypto Stamps on display at the RAI convention center in Amsterdam.*

The physical stamps are produced by Austrian firm Varius Card, whose managing director, Michael Dorner, unpacked the latest security features in a conversation with Cointelegraph. The fourth edition of the Crypto Stamps features invisible ultraviolet rays and forensic security. The NFC chips also provide cryptographic proof of any given stamp’s authenticity.

Dorner also regaled recent conversations he had with older-generation Austrians who were avid stamp users who were introduced to NFTs through PostAG’s Crypto Stamps. Unfamiliar with the digital collectibles, some grandparents inevitably asked their grandchildren to help them come to grips with the digital twin of their real-world stamps.

“They called up their grandchildren and said, ‘Do you know what an NFT is?’ And the grandchild says, ‘Yes, what do you have?’ Suddenly they sat down together for dinner, they checked the crypto stamps, and the kids were like, ‘Granddad, let’s check what color you have.’”

All three individuals believe that the NFT-paired postage stamps are leading to a philately renaissance, with Dorner describing the shift as the next generation of collectors:

“Two generations with two completely different aspects come together, and they talk. And you have this new community, you have this ‘collectors 3.0.’ Like the young collectors, we all suddenly just started getting interested in stamps again.”

These positive sentiments are also backed up by the popularity of each launch, with Dorner and Liebermann highlighting that all previous NFT-paired collections completely sold out.

Dorner estimated that 150,000 to 250,000 postage stamps with NFT pairs had been sold since 2019, suggesting the initiative could be one of the most successful NFT projects in the world. The latest edition of Crypto Stamps is minted on the Polygon blockchain.

How blockchain can address Austria’s energy crisis

In the future, energy communities should make a greater contribution to the energy transition.

Climate change has become one of the biggest global challenges for humanity. At the same time, the dependence on hydrocarbon energy sources such as coal, oil and natural gas is still strong.

Supply lines around these energy sources are further vulnerable to geopolitical tensions. Due to the current sanctions against Russia, experts now expect rising electricity prices and negative effects on the energy market in Europe.

The Austrian government understands the urgent need for the energy transition and has set the ambitious goal of being climate neutral by 2040. Alternative solutions to fossil energy have been slow to emerge and, for the most part, are not yet efficient enough on a large scale. But there are promising approaches — especially in the form of decentralized renewable energies or blockchain technology in peer-to-peer (P2P) energy trading.

There are already pilot projects in Austria dealing with P2P trading on the energy market. At the forefront are blockchain scale-up Riddle&Code and Austria’s largest energy provider Wien Energie, which founded a joint venture in 2020 called Riddle&Code Energy Solutions.

As of April 1 of this year, Kai Siefert is the new head of the joint venture. He was formerly an IT strategist at Wien Energie and worked on the energy tokenization platform MyPower in Vienna. Cointelegraph auf Deutsch caught up with Siefert to ask how we can combat the energy crisis with the help of blockchain.

From pilot project to solar tokenization

Wien Energie and Riddle&Code have been working together for a long time. Back in 2017, the companies launched the first project called Peer2Peer in Quartier where they tokenized photovoltaic solar systems so that consumers can participate in energy production.

Later, at the end of 2018, when Siefert was still Wien Energie’s IT strategist, his team developed a blockchain strategy together with Astrid Schober, head of IT at Wien Energie, and focused on the topic of energy tokenization with security tokens and utility tokens.

This resulted in the MyPower platform. First, Wien Energy and Riddle&Code tested the decentralized trading of self-generated solar power via blockchain in a smart city project with 100 participants. Everything went smoothly, and in 2021, a tokenization platform for photovoltaic plants was launched. Riddle&Code tokenized the largest solar plant in Austria and gained 1,000 customers who, as part of its advertising campaign, bought energy vouchers issued by Wien Energie in the form of tokens, which could be used to pay electricity bills.

Now MyPower tokenizes solar photovoltaic assets across the whole of Austria, allowing consumers to benefit from partial ownership and invest in renewable energy sources.

Demand for renewable energy is huge

According to Siefert, the concept of energy sharing is very much in demand at the moment. Due to Russia’s invasion of Ukraine and the coronavirus crisis, electricity prices are skyrocketing. Rising energy prices can be mitigated with cheaper renewable energies, smart information technology and energy sharing.

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With blockchain-based energy sharing, jointly generated electricity is fed into the grid, distributed and sold directly to flats — all without an intermediary. Kilowatt-hours not consumed can also be sold to other energy communities, and thus, consumers earn or save money.

Energy sharing can enable direct energy trading between energy consumers (energy producers and end-consumers), who can use this approach to take control of their generation and demand. People who rent instead of owning their homes can actively participate in the energy transition and benefit from the proceeds. This gets consumers more involved in their own generation and puts local value creation at the center.

“You don’t need to buy natural gas from Russia or oil from Saudi Arabia to create energy here in Europe,” Siefert said. “The sun comes virtually for free and reliably produces electricity. But many people can’t participate because they don’t have their own house, but live in a rented flat or simply don’t have the means to buy a large solar system. However, we can divide these plants into small digital asset tokens so that private investors with little capital can also participate.”

Renewable energies “are coming into focus”

In Austria, there are already small renewable energy communities such as Erneuerbare-Energie-Gemeinschaften (EEG). Such energy communities (in Austria and according to the Renewable Energy Expansion Act) are nonprofit-orientated legal entities intended to decentralize the generation, distribution and consumption of renewable energy mainly for the public benefit. Such EEGs still play a small role in production, local and regional distribution, and consumption of renewable energy and are often not very profitable.

However, things are starting to develop. According to Siefert, the demand for EEGs has already increased enormously due to rising energy prices, and Riddle&Code Energy Solutions offers technical solutions for setting up and onboarding such EEGs. “We can also connect them to decentralized marketplaces with our system,” Siefert said. This is already possible with the Renewable Energy Expansion Act, which has been in force since 2021 and is a European Union directive that has been transposed into national law.

Siefert noted an “increasing interest in interesting in renewable energies” — in Austria, Europe and worldwide. Companies working in the field of renewable energies “are now coming into focus,” as they are benefiting “from the large investments favored by climate policy worldwide,” Siefert said.

Real-time data signed and encrypted on the blockchain

At the moment, P2P energy trading is not yet allowed in Austria. Everything works on the basis of the current electricity market infrastructure, and billing data is made available by the grids 24 hours after it has been measured.

But Riddle&Code Energy Solutions can already take this data in real-time. A dongle that can be connected directly to the smart meter reads data live from the customer interface and sends it via a trusted gateway — signed and fully encrypted on the blockchain. From there, this data can be read out immediately. Customers can see every quarter of an hour how their credit grows in kilowatt-hour tokens.

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This data cannot be used for billing yet, but it helps to incentivize the right consumption behavior. Thanks to such data, the customer can see how much green energy they have on the grid from the community installation and, for example, use this time to turn on the washing machine or charge an electric car. This, in turn, has an indirect effect on the bill because customers then pay less if they use more electricity from their own shared forms.

“Our goal is that everyone can participate in energy sharing,” Siefert said. “But private P2P trading is currently not possible in Austria until legal regulation is created. That is why I would like to see more freedom here from the government side and more speed in the expansion of renewables. Austria can become one of the leading nations in the EU and worldwide in terms of P2P energy trading and the development of energy communities.”

This is a short version of the interview with Kai Siefert. You can find the full version here (in German).