European cryptocurrency trading platform 21bitcoin has started paying 1.21 percent annual interest on uninvested euro balances left in customer accounts. Users can receive the interest in bitcoin without separate currency conversion fees.

Bitcoin Magazine reported on Oct. 1 that the programme applies to all euro funds remaining in an account. It includes cash waiting for the next recurring purchase to be executed as well as funds tied up in limit orders. There is no minimum deposit and no requirement to lock up funds for a set period.

21bitcoin said it is the first provider in Europe to pay savings interest directly in bitcoin. Co-founder and CEO Daniel Winklhammer (다니엘 윙클해머) said the process of building wealth in bitcoin starts not at the time of an actual purchase but with euros set aside for buying. This means it aims to extend its service to include funds waiting to be invested in bitcoin by adding returns to idle cash.

The interest is paid by German bank Volksbank Raiffeisenbank Bayern Mitte eG. The bank has held a stake in 21bitcoin since 2023. Customers' euro funds are kept as immediately withdrawable savings in the bank's segregated trust accounts.

21bitcoin said it passes on all interest generated to customers and does not take its own margin. The company said this is a different structure from past high-yield promises that brought down several crypto lenders. It pointed to customer funds being held in segregated bank accounts and said the platform does not add additional yield on top.

The interest rate is not fixed but variable. German withholding tax also applies to the interest. This means users should look at the actual amount received together with taxes and rate changes, rather than relying only on the headline yield.

The launch extends 21bitcoin's fee-free recurring bitcoin purchase product introduced earlier this year. The company also started a pilot project last year with VR-Bank Bayern Mitte eG and Sopra Financial Technology to develop a bitcoin-collateralised loan product in Europe. The goal was an institutional-grade bitcoin-backed credit product.

The company also laid out plans to expand services. 21bitcoin said it plans to roll out bitcoin-backed loans, insured cold storage and multisig inheritance custody services in sequence in 2027. Starting with interest payments on euro deposits, it is moving to expand beyond simple trading into bitcoin financial services that also cover custody and lending.

Meanwhile, 21bitcoin, founded in 2021, holds a MiCAR licence in Austria and has also received approval from Germany's financial regulator BaFin. The company said it has more than 100,000 users and cumulative trading volume of more than 650 million euros. Against that backdrop, the product is drawing attention as an attempt to generate returns on funds waiting to be invested in bitcoin within Europe's regulatory framework.