BitwalaWhitepaper

November 2017Berlin, Germanyv1.2.0

An equity token generation event torealise our vision of building a Berlinbased blockchain bank to offer financeand banking tools for the cryptoeconomy

Bitwala Whitepaper November 2017 Version 1.2.0 

Executive Summary 2 

Our Vision 3 

Our Mission 3 

Overview 3 

Why become the first Blockchain Bank 5 

Our story 7 

What is Bitwala? 7 

Products 7 

People behind Bitwala 11 

Management 11 

Investors 12 

Advisors 13 

Growth and Revenue 17 

Key company statistics 17 

Revenue streams 18 

Timeline and roadmap 19 

Milestone 1 20 

Bank Accounts for EU customers 20 

Altcoin support 20 

Expand Trading Software 20 

Milestone 2 20 

Card Holder Reward Program 20 

Lightning Node 20 

Expand APIs 21 

Milestone 3 21 

Full banking license 21 

Fiat-pegged tokens 21 

Payroll solutions 22 

Milestone 4 22 

Brokerage 22 

Short-term Bitcoin Loans 22 

Milestone 5 22 

Banking Licenses in other Countries 22 

Milestone 6 22 

U.S. Banking License 22 

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Executive Summary Bitwala GmbH is a German blockchain company building the bank for the crypto                         economy.  

The crypto economy is exploding but lacks the banking infrastructure to support it. Businesses live in fear of having their bank accounts shut down overnight and only 0.07% of individuals hold cryptocurrencies. 

We believe the solution is to bridge the gap between the crypto and fiat worlds by offering customers a fully licensed bank account that is augmented with blockchain and cryptocurrency functionality. 

Since the company’s founding in 2015, we have proven that we can serve the huge demand for next-generation financial services products. We have transferred over €55 million for our 57,000 business and private users from 120 countries around the world. 

In our next phase, we want to build on this success to provide an even more comprehensive solution. To crypto businesses, we will offer a strong banking foundation on which to develop. For individuals, Bitwala will connect the familiar world of online banking with the possibilities of buying and owning cryptocurrency. Our ongoing work with regulators ensures that our services are fully compliant with Know Your Customer (KYC) and Anti Money Laundering (AML) regulations. 

Our API will enable third parties to piggyback on our compliance and technical stack, enabling traditional banks to offer cryptocurrencies to their customers and crypto companies to painlessly KYC their users. Trading is powered by our proprietary software which aggregates exchange order books and routes trading requests to ensure the best price. 

Our business model has been endorsed by established investors. In funding, we have raised over €2.3 million from inter alia, Barry Silbert’s Digital Currency Group (DCG), Germany’s leading seed fund High-Tech Gründerfonds (HTGF) and Alternative Strategic Investment (ALSTIN). 

Bitwala is planning an Equity Token Generation Event to support the next stage of its development. 

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Our Vision We envision a world where blockchain technology allows for the frictionless transfer of value between different asset classes and people. 

Our Mission Bitwala will create the world’s first blockchain bank. Working with regulators, we will make the interface between crypto and fiat currencies simple, secure and fair. 

Our tools have already helped tens of thousands of users around the world to bridge the gap between traditional banking and the crypto economy. We will build on this success and create a suite of financial tools and services that revolve around a bank account. This will serve as the base on which the crypto economy will build its banking foundations. 

Overview The crypto economy is exploding, having recently reached the €140 billion mark. 1

It is, however, currently drastically underserved by traditional banks . Bitwala will 2

seize a major market opportunity worth €5.6 billion. 

Despite many high profile banks and governments publicly expressing an interest in cryptocurrencies, the reality is that these programs are siloed pilots. There is little indication that their core business model will move towards cryptocurrencies in the near future. 

Bitwala plans to capture this massive market by positioning itself as a bank that prioritises blockchain and cryptocurrencies. We are a crypto company building a bank as opposed to a bank moving towards crypto. We believe that our business model and rate of innovation make us competitive with incumbent traditional financial institutions. 

Traditional banks hurt cryptocurrency and blockchain adoptionThe fiat system is not designed to work with the crypto economy. The know-how of banks is very limited and there is no serious strategic focus, except for some private blockchain trials in inter-banking clearing processes. The job of a bank is fundamentally to manage risk. This requires a lot of know-how about the systems in which it does so. Managing risk in a fundamentally different system such as the 

1https://www.forbes.com/sites/cbovaird/2017/08/31/why-the-cryptocurrency-market-has-reached-a-new-rec

ord-high/ 2 https://www.researchandmarkets.com/research/twkp6b/blockchain_market  

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crypto economy requires a completely different knowledge and set of processes. Given the relatively small size of the crypto economy at this stage, there is little 3

incentive to expose their core business to the potential danger of being bullish on crypto. 

The result is a bias against crypto users, hampering the rate of innovation for both business and individuals. 

For businesses A number of small and midsize businesses (SMBs) and enterprises that accept bitcoin or other altcoins are struggling to find banking services. In the more extreme cases such companies, including exchanges, have had their banking services cut overnight , . This happens more often than is reported, with 4 5

companies not publicising these internal problems in order to avoid bad press . 6

Services as fundamental as a bank transfer can be interrupted if the financial                         institution perceives the transaction to be related to cryptocurrencies.  

Making a bank transfer with a reference that includes “bitcoin”, “crypto” etc. or to a company with “coins” in its name will often result in the transfer being rejected . 7

Furthermore, holding crypto assets presents a new set of legal, auditing and accounting challenges. If applicable, capital gains tax might be due. Bookkeeping is obliged to take into account not only the fiat price of the crypto asset at the time of purchase and sale but also the transaction fees. Additional challenges exist for tokens that are held in escrow, smart-contract based or otherwise. Today, neither the appropriate standards nor tools exist to address these gaps.  

By bridging these two worlds, Bitwala will solve these problems, so that businesses can easily operate across both economies.  

For individualsIn the first half of 2017, the cryptocurrency market cap increased threefold . 8

However, according to a study by Cambridge University, this value is generated by and exchanged among only 5 million people - that is only 0.07% of the world 9

population. 

3 The U.S. banking industry controls $15 trillion in assets https://www.forbes.com/sites/steveschaefer/2014/12/03/five-biggest-banks-trillion-jpmorgan-citi-bankamerica/#1e2f4cab5395 4http://www.telegraph.co.uk/finance/personalfinance/investing/11537972/Barclays-closed-down-my-bank-account-after-Bitcoin-trade.html  5https://www.forbes.com/sites/kashmirhill/2013/11/15/bitcoin-companies-and-entrepreneurs-cant-get-bank-accounts/#29034a28260d  6Bitwala knows a number of such companies and has, itself, experienced significant trouble finding a bank account and have had access to banking services pulled with little to no warning. 7 https://www.cryptocoinsnews.com/banks-still-closing-accounts-bitcoin-activity/ 8https://www.forbes.com/sites/cbovaird/2017/08/31/why-the-cryptocurrency-market-has-reached-a-new-record-high/  9https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/alternative-finance/downloads/2017-04-20-global-cryptocurrency-benchmarking-study.pdf 

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Bitwala believes that for most individuals the existing onboarding process for                     people new to crypto currencies is too complicated and cumbersome.  

A typical user journey for buying and selling bitcoin involves the following steps: 

1. After having registered and been verified by an exchange, making a                   deposit via a SEPA/SWIFT transfer

2. Waiting a day or more to have this amount credited3. Logging in and trading fiat for bitcoin which is held in a wallet where                         

the exchange controls the private keys4. At a later date, logging back on to sell the bitcoin for fiat5. Initialising a withdrawal to their bank account6. Waiting a day or more to receive the money7. Logging onto their bank account to make a transfer

This process is slow (typically at least 2 days waiting) and involves the unnecessary risk of storing assets on an exchange. Furthermore, the typical exchange’s interface and financial terminology is still too complicated for the average user.  

Why become the first Blockchain Bank A secure legal and banking foundationBitwala’s crypto-first approach means that companies and individuals will no longer have to fear their bank account being shut down because they work with crypto. By establishing a government-recognised identity on the entity’s behalf, we enable them to use their cryptocurrency to interface with the fiat world in a secure, frictionless and compliant way. 

Bitwala Bank accounts will be protected for the legal minimum of €100,000                       10

mitigating the risk of holding funds with us. 

Taxation and auditing Companies and individuals are obliged to do bookkeeping for taxation and auditing processes. Cryptocurrencies make this a complicated process today. In more than 40 countries worldwide where Capital Gains Tax is in place, a percentage of all income from crypto must be paid respectively on private crypto assets that are sold before a certain time after the date of purchase.  

Bitwala will aggregate trade data from its own platform to provide users and businesses with a suite of taxation and auditing tools to connect their activity with 

10http://www.edb-banken.de/ 

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their Bitwala bank account ledger. When selling cryptocurrencies, users can demonstrably prove that they have held the assets for a certain period of time. 

A fundamentally superior banking and trading solution With a Bitwala bank account it will be much faster and more convenient to gain                             access to the crypto economy:  

● When buying crypto with fiat, the deposit time will be almost instant because                       the Bitwala customer and Bitwala (the recipient) have accounts provided by                   the same bank and such transactions are near instantaneous.

● After trading, the user can send their fiat balance to any EU bank account                         directly as it is a fully BaFin-licensed SEPA bank account.11

With today’s exchanges, it might take up to a week to deposit, trade and withdraw.  

With Bitwala, the process takes only the time it takes for a bitcoin transaction to be confirmed (approx. 10 minutes). In the future, using our upcoming SegWit  12

and Lightning Network implementations, trades and withdrawals will take only a few minutes. This speed of transfer can be achieved even if users hold their private keys. 

In addition to the functionality and security of a traditional bank account, Bitwala will also offer a suite of services associated with traditional banking such as: 

● Acting as a basis for credit rating● Being a legally recognised proof of address● Applying for loans and mortgages● Access to capital markets and stock trading

All of these services will be provided on web, mobile and, where possible, through                           our API. 

11 Single European Payments Area 12 https://en.wikipedia.org/wiki/SegWit  

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Our story What is Bitwala? 

Bitwala GmbH is a German blockchain startup headquartered in Berlin providing financial services to the crypto economy. Founded in 2015 in Berlin by Bitcoin’s first wave investors, Bitwala has grown into a team of 22 international professionals specialising in: blockchain development, finance, cryptocurrency trading and marketing.  

The first half of our name reflects the basic unit of information used in computing. It also echoes our modus operandi - bitcoin. The second part of our name refers to the ancient trust-based money transfer system of Hawala . 13

We have a strong community of more than 57,000 private and business users in 120 countries around the world and to date, we have transferred more than €55 million.  

Products International money transfers Mainstream and crypto users alike are being charged €63 billion per year in exaggerated transactional costs when conducting cross-border payments . 14

Bitwala offers accounts for business owners and individuals to quickly and 

13 https://en.wikipedia.org/wiki/Hawala 14 http://www.mckinsey.com/industries/financial-services/our-insights/rethinking-correspondent-banking 

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cheaply transfer Bitcoin, Ether and over 60 other Altcoins into 22 local currencies, including EUR, CHF, and CNY. Most transactions are subject to a 0.5% fee, are processed within 1 business day and can be deposited into any bank account in over 190 countries. This service will become both faster and cheaper in the future . 15

Bitcoin WalletWith the Bitwala multisignature wallet, users have full control over their funds and private keys. The wallet connects all the services for quick and safe payments and transfers. Businesses and individuals can start receiving Bitcoin within a few minutes. Bitwala wallets can, in case Bitwala’s operations should be disrupted, be recovered with publicly available tools. No-one except users have access to the keys in these wallets. 

Bitwala Prepaid CardFor  on  the  go  expenses  Bitwala  offers  a  prepaid  card.  Once  converted, bitcoin or any one of the multiple accepted altcoins can be used to top up  the  card.  A  simple  and  efficient  user  interface  allows  business  owners,  accountants and everyday users to see all transactions in real time.   

Bitwala currently requires cryptocurrencies to be converted at the time of loading. With our blockchain bank, we will also offer a hosted wallet solution where crypto can be converted and spent in real time. 

15 At the time of writing, some of our currencies were temporarily disabled due to 3rd party system upgrades.  

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Trading Software The backbone of our business is our proprietary trading software which aggregates and evaluates order books from multiple exchanges. It routes conversion requests through the order books, making one or more trades to get from the source to the destination currency in the cheapest possible way. 

Since its inception in December 2016, it has been in constant development to accommodate all internal payment processes. It will connect to our API and thus be available for our partners to use. With the coming integration of altcoins and tokens, this system will serve as a hub for all of our incoming and outgoing transactions. 

API Services Our REST API allows third parties to interface with us in a programmatic and, where possible, white-labeled way, opening the possibility of B2B2B and B2B2C business. 

Partners can build applications on top of our fully compliant platform and interface with the crypto world without the overhead of setting up KYC operations or dealing with the exchanges directly. 

Platforms ● Web app16

● iOS and Android apps17 18

● White-labeled API19

Awards ● Paris Fintech Forum 2017 in Paris, France; Best Blockchain Startup● Fintech Pioneers 2017 in Berlin, Germany; Best Finance Startup● ICT Spring 2017 in Luxembourg; Future FinTech Star Award● Der Deutsche Innovationspreis 2017 (The German Innovation Prize) in               

Düsseldorf, Germany; Top 3

16 https://my.bitwala.com 17 https://itunes.apple.com/gb/app/bitwala/id1114481262?mt=8 18 https://play.google.com/store/apps/details?id=la.bitwa.bitwala&hl=en 19 https://www.bitwala.com/api/ 

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People behind Bitwala 

Management Bitwala’s leadership is responsible for strategic business decisions and building a                     strong team. 

Jörg von Minckwitz, CEO & Co-Founder Jörg has been actively involved in Bitcoin since the beginning of 2011 and has a long legacy of founding Bitcoin and crypto-based businesses. He is the co-founder of Bitsandcoins Consulting UG, the first Bitcoin Consulting in Europe, as well as E4BTC, the first e-commerce shop in Europe focused on Bitcoin. He co-founded Bitcoins Berlin, the first Bitcoin startup incubator in Europe. Before founding Bitwala, he also co-founded Transistor Coworking, the first Bitcoin-focused coworking space in Europe. Linkedin 

Benjamin Jones, CTO & Co-Founder Ben is responsible for the tech and ensures the security and scalability of Bitwala’s services. He graduated from the London School of Economics after obtaining a B.Sc in philosophy and economics. Frustrated by the tautologous nature of macroeconomic models in the wake of the financial crisis, Ben dived head first into the Berlin startup scene. After mentoring startups in Ghana, he saw the potential impact of bitcoin on the developing world and became hooked on crypto. An avid believer and contributor to open source, Ben joined Jan and Jörg soon after the inception of Bitsandcoins, Ben quickly fell into the role of CTO.  

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Linkedin 

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Jan Goslicki, COO & Co-Founder Jan has been actively involved in Bitcoin since late 2012. Ex PwC, Jan has a strong                               attention to detail and quality assurance. Jan handles the finances, compliance                     and customer success. In July 2017 Jan had an accident that left him paralyzed.                           With his strong mind and spirit, he is still actively contributing to the team and a                               founding member that will return to his desk within a year.  Linkedin 

Konstantin Werhahn, CPO Konstantin is responsible for the roadmap and brings a lot of banking and FinTech experience to the leadership team. In his previous position, he oversaw the product development of FinTech Group AG and helped to restructure the 450 employee large group into a white-label platform banking provider. Before the FinTech Group AG, he was the Head of Product at the FinTech Startup Barzahlen.de and helped it to become an established payment provider. Konstantin contributes with banking and financial infrastructure know-how as well as the experience of building a successful FinTech.  Linkedin 

Investors Bitwala raised a seed round and a pre-series A (2016, 2017) from some of the                             most notable blockchain and Bitcoin investors and investment funds in the                     industry, including:  

Digital Currency Group (DCG) 20

A venture capital company focusing on the digital currency market located in New                         York. DCG builds and supports bitcoin and blockchain companies by leveraging its                       insights, network, and access to capital. DCG is led by Barry Silbert, one of the                             most influential figures and investors in the Bitcoin and crypto currency sector.  

High Tech Gründerfonds (HTGF) 21

20 http://dcg.co/ 21 https://high-tech-gruenderfonds.de/ 

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Germany’s leading seed stage investment fund. Based in Bonn, HTGF is a                       public-private partnership made up of investors including Germany’s Federal                 Ministry of Economics and Energy, the KfW Banking Group and strategic                     corporate parties such as SAP, Deutsche Post DHL, Deutsche Telekom and                     others.  

Alternative Strategic Investments (ALSTIN) 22

ALSTIN is the growth stage venture capital firm of the Maschmeyer group. Founded and led by Carsten Maschmeyer, one of Germany’s best-known entrepreneurs and investors, its portfolio includes companies such as Barzahlen, Orderbird, and Blacklane. 

Dr. Ricardo Schaefer Ricardo is one of Bitwala’s earliest backers. He spent several years as an                         investment banker at Merrill Lynch with a focus on tech investment and is                         currently an expert in residence at SeedCamp in London. He has a Ph.D. in                           economics and has previously taught at University of Oxford’s Entrepreneurship                   Centre.  Linkedin 

Advisors 

Max Kordek - Co-Founder and CEO of Lisk Having a rich experience in the blockchain industry and seeing the potential of blockchain-based applications, Max co-founded Lisk, a blockchain application platform for JavaScript developers which caused a stir when it collected 14,000 BTC in a crowdfunding round in early 2016. Linkedin 

22 http://www.alstin.de 

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Thomas Naegele - Managing partner, Naegele Attorneys at Law, Liechtenstein Thomas is one of the leading legal experts on IT law. He specialises in civil and corporate law and is well versed in corporate management and blockchain companies. He is also an IT law lecturer at the University of Liechtenstein and the president of the Crypto Country Association whose aim is to promote the transfer of knowledge through and the introduction, development, and dissemination of cryptographic technologies. Linkedin 

Dr. Alex von Frankenberg - Ph.D., Managing Director of HTGF Alex has been active in the world of venture capital and startups since 2000 and became Managing Director of High-Tech Gründerfonds in 2005. Prior to this, he was responsible for periphery ventures from Siemens Corporate Technology in his role as Venture Manager at the Siemens Technology Accelerator (STA). He holds an MBA from the University of Texas at Austin and explored the establishment of de-facto technology standards in the Ph.D. he obtained from the University of Mannheim. Linkedin 

Andreas Hoerr - Performance Marketing Based in Munich and prior to founding his consulting firm, Insight - M, Andreas held for more than 10 years senior marketing positions at Disney, Burger King Germany, and Yahoo Central Europe. In addition to being a successful marketer, he is also an experienced entrepreneur who founded and exited many companies including Medikompass and Venturate. He also supports promising start-ups as mentor/coach for the accelerators from Google (Launchpad), Telefonica (Wayra) and Techfounders. Linkedin 

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Niels Dörje - Digital Entrepreneurship A strategic advisor to promising startups, Niels guides Bitwala to maintain an efficient work stream. In 2012, he co-founded and exited the digital growth platform, OnPage.org (Ryte). He is also the chairman of innovation at Sky Germany and an advisory board member of Team Internet AG, a global platform in domain business, TrustYou GmbH, a global player in the field of semantic hotel search and reputation management and Catbird Seat GmbH, a Digital Performance Agency. Linkedin 

Chiara Sommer - Senior Investment Manager at HTGF Chiara holds the fort for HTGF in Berlin - Germany’s biggest startup hub. She has amassed extensive experience in marketing, product and business development, sales, fundraising and corporate finance. The primary investment fields comprise marketplaces, apps, SaaS and FinTechs. Her portfolio includes companies like JUNIQE, POSpulse and Asana Rebel. She holds a B.Sc. degree in Business Studies specializing in Finance from Cass Business School in London and Universita Bocconi in Milan. Linkedin 

Dennis Daiber - Entrepreneur, Trading Expert Dennis Daiber is a Bitcoin veteran, hailing back to 2011. He operates bitcoincommodities.com, the world’s first crypto-to-gold online shop. He is very familiar with the needs and issues of crypto entrepreneurs, merchants, and SMBs. He co-founded the Bundesverband Bitcoin and is part of the cypherpunk think tank Crypto Economic Consulting Group alongside figures such as Jon Matonis, Joerg Platzer, and Mike Gogulski. He is a stock broker and market maker with more than 15 years of experience in international stocks, blue chips, and ETFs.  Linkedin 

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Stefan leads development and architectural design of Gnosis, the platform for the next generation of prediction market applications. Earlier this year Gnosis reached a $300 million valuation after reaching their ICO cap in record time of less than 15 minutes.  Linkedin 

Enrique Melero - Banker, Crypto Finance Consultant Enrique Melero is a banking veteran with 25 years of experience working in finance at IBM, Nokia, Reuters and HSBC. Enrique has managed and led international teams across Finland, Germany, Switzerland, Singapore,  and the UK. Linkedin 

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Stefan George, Co-founder and CTO of Gnosis 

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Growth and Revenue Since inception, our user acquisition and transaction volume processing have                   enjoyed constant growth. Over the years we have developed and added several                       revenue streams. Using the funds raised we will diversify and expand these even                         further.  

Key company statistics 

Average monthly growth: 20% 

Bitwala cards: 5,408 

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Revenue streams International bank transfers We charge a 0.5% (€1 minimum) fee for customers sending money abroad. Each                         year over €152 trillion is being moved in global cross-border payments . 23

TradingWith increasing volume and with our own trading software, we expect to be able to increase our margin by up to 75% in shallow markets and even more in volatile environments such as altcoins. The crypto market cap surpassed the €140 billion mark in the summer of 2017 . As we proceed to accept even more 24

cryptocurrencies outside of bitcoin, we expect to be able to manage a large amount of this flow in-house, saving on exchange and transaction fees. Thus, margins may increase, which will likely put our potential profit close to 2% per trade.  

Bitwala CardsEach top-up is subject to a 0.5% fee. We also earn sign-up and foreign exchange fees, some of which we plan to credit back to the account of the customer on a coinsback program. These programs are subject to negotiation with merchants and credit card providers. We expect an average gross margin in excess of 1% including top-ups from credit card usage.  

By developing the products outlined in the roadmap below we intend to add multiple                           revenue streams which will increase the value of Bitwala’s token (WALA) over time,                         namely: 

B2B AccountsBitwala is exploring a subscription-based model where businesses pay a monthly fee for their account. This would involve premium support and a range of services tailored to their needs. 

Currency-pegged tokensWe will issue these tokens at 1.005 and redeem them at 0.995 of the underlying currency. This equals a lifetime fee of 1% and goes towards auditing and legal expenses. We expect liquid markets to support tighter spreads on alternative exchanges. Planned supported currencies include, but are not limited to EUR, GBP, and CNY. 

Financial services marketplaceOnce Bitwala has established itself as a trusted banking solution, it will offer loans, insurance and mortgages from within its platform. Users will also have the opportunities to invest and trade in traditional asset classes such as stocks and commodities. 

23http://www.mckinsey.com/industries/financial-services/our-insights/rethinking-correspondent-banking https://www.smefinanceforum.org/sites/default/files/post/files/McKinsey_Global_Payments_Report_2016.pdf  24https://www.forbes.com/sites/cbovaird/2017/08/31/why-the-cryptocurrency-market-has-reached-a-new-record-high/  

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Timeline and roadmap Bitwala has been around since 2015 and has achieved the following milestones. 

October 2015  Bitwala GmbH founded and processes first € transfer 

October 2015  Supports GBP 

November 2015  Partners with Trezor  25

December 2015  Releases Bitwala Bitcoin prepaid cards 

April 2016  $910,000 seed funding secured from HTGF and DCG 

July 2016  Partnership with ShapeShift  26

August 2016  Launches Bitwala Bitcoin wallet 

October 2016  Added 9 new currencies: AUD, BRL, CNY, JPY, MYR, MXN, PHP, KRW, VND 

November 2016  Launches instant prepaid card top ups 

November 2016  Launches Bitwala Android app 

February 2017  Launches brand new Bitwala Bitcoin prepaid cards 

March 2017  Supports Bitcoin to mobile money in Africa 

March 2017  Introduces instant mobile phone top ups using Bitcoin worldwide 

July 2017  Secures €1.5 million funding from ALSTIN and HTGF 

The milestones below represent our strategic roadmap. Our strategy is to become the market leader in services where crypto and fiat intersect. Every milestone listed below will guide us to this strategic goal. Every step along the roadmap is meant to build on the previous one and is to be implemented based on product and user feedback as well as the council of our advisors. It is subject to change based on market conditions. 

25 Trezor is a cold storage hardware wallet. It enabled users to pay bitcoin invoices with the highest level of security. 26 Shapeshift allows users to convert altcoins, allowing them to pay a bitcoin invoice with altcoins which will be converted to the required bitcoin amount. 

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Milestone 1 

Bank Accounts for EU customers With our European bank partner, we are able to offer EU-based customers full bank accounts with IBAN numbers for private and business use. This is one of the cornerstones of the future expansion of Bitwala, as it allows us to offer trading in crypto as well as all other asset classes and offer full banking services on both the traditional and the crypto side of the spectrum. 

Altcoin support Starting with the different forks of Bitcoin, followed by Ethereum and its ERC20 tokens, we will integrate all of the most prevalent crypto-currencies into the 27

Bitwala wallet and into the Bitwala ecosystem. This means that we will natively support payments in these currencies and tokens as well as add them to our API for businesses with whitelabel access. We will build and maintain an infrastructure that will support adding and updating subsequent currencies based on market demand. 

Expand Trading Software Bitwala will expand on its proprietary trading software that aggregates order books and routes customer funds through the appropriate exchanges or partner services. Since the crypto landscape evolves rapidly, this software will be built with flexibility and scalability in mind. As we are connecting ever more partners, exchanges, and customers, this software enables us to provide our services with the lowest possible fees and always in accordance with local regulations. 

Milestone 2 

Card Holder Reward Program We will overhaul our Bitwala Bitcoin prepaid card program. We will introduce a “coinsback program” through which users’ accounts are credited with cryptocurrency when making payments with the card. In addition, we will integrate real-time conversion and spending of cryptocurrencies. Partnerships permitting, we will issue contactless cards with Android Pay and Apple Pay support. 

Lightning Node With the activation of Segregated Witness on the bitcoin blockchain, we expect to become one of the larger Lightning Network nodes in Europe. Thus, our customers will be able to send and receive bitcoin at near-instant speed. Running and securely maintaining a decently funded Lightning Node is expected to require 

27 Currently, we accept ~60 cryptocurrencies through our partner, ShapeShift. In the future, we will accept and sell these currencies directly without the need for a third party. 

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Bitwala Whitepaper November 2017 Version 1.2.0 

a minimum of €500,000 worth of liquidity to serve private users and up to €2 million for business accounts.  

Expand APIs The API allows for B2B2B and B2B2C business. We will work to expand and improve our API, building up to a Service Level Agreement (SLA). 

Our APIs allows partners to piggyback on the legal and compliance work that we’ve established. This will be particularly useful in the cross selling of services. 

Example 1: Wallets integrating crypto-to-fiat solutions While most wallets can hold cryptocurrency without KYC, it is required for trading and holding fiat. Rather than implement an entire compliance stack themselves, wallets can integrate a ‘Login with Bitwala’ solution, ensuring the user has been gone through the relevant KYC. 

Example 2: Traditional banks enabling crypto trading to customers Cryptocurrencies are yet to break into the mainstream. Allowing customers of traditional banks to purchase bitcoin etc. could be a highly effective way to engage new users in the crypto space. Bitwala would provide a simple API to selected partners allowing them to offer the option to buy and sell cryptocurrencies. 

Milestone 3 

Full banking license Achieving the third milestone will allow us to become a fully licensed German bank , allowing us to offer bank accounts without the need for a partner bank. Being fully licensed gives us more control and flexibility over the banking services that we develop and offer to our customers. This is also a strategic move to become closer to regulators and begin to advocate for standards in KYC, AML, taxation, and auditing befitting of the blockchain generation. 

Fiat-pegged tokens After becoming a bank, Bitwala will issue pegged tokens on the major fiat currencies used in the Bitwala ecosystem, starting with the Euro. These currency-pegged tokens will be issued on the Ethereum blockchain as ERC20 tokens to ensure maximum support on exchanges. For every €1 Bitwala holds in reserve, it will issue one token. This token can then be redeemed in the future for the underlying fiat value. Bitwala itself will redeem tokens at 0.995€, providing the KYC where necessary. All tokens will be fully backed by bank reserves as we will provide regular audits of both token and fiat reserves.  

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Bitwala Whitepaper November 2017 Version 1.2.0 

Payroll solutions With a SEPA bank account and the fiat-based token models, business account holders will be free to pay wages in the currency of the employee’s choice . This will be available via our API and also an account-based solution where the employee can dynamically determine in which currencies they want to receive their salary. 

Milestone 4 

Brokerage Bitwala will enter an agreement with or become an online brokerage connecting our customers to stock and derivative markets. Users will be able to trade stocks, ETFs and derivatives creating a portfolio of traditional assets. 

Short-term Bitcoin Loans Using Bitwala’s Lightning Network node, customers can take advantage of sudden increases in demand for liquidity in Bitwala’s trading software by lending their cryptocurrencies out in the short-term. Customers may mark part of their balance as “lendable”, assign a daily interest rate and our system will automatically initiate and close loans as well as pay interest.  

Milestone 5

Banking Licenses in other Countries Bitwala will expand its bank infrastructure and obtain licenses and branch out into promising markets such as the UK, Russia and South Korea . Bitwala will decide on which markets to enter on a case-by-case basis. We will open Bitwala branches and work with local governments to provide a KYC and AML framework such that residents can legally and securely have access to a full suite of banking and crypto services.  

Milestone 6 

U.S. Banking License We will apply for a US banking license . While cryptocurrencies face particular regulatory difficulties in the U.S., the country has for the last centuries been the financial hub of the world. Becoming a bank in the United States will require more stamina, legal and technical resources than all the other projects. 

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Bitwala is planning an Equity TokenGeneration Event Q1 2018.

Visit https://vision.bitwala.com to stay up to date

View changelog here