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Big news from Wealthsimple HQ: as of November 10th, Wealthsimple has crypto wallets — specifically hosted wallets, not non-custodial wallets; we’ll explain more below — which is pretty neat if you care about blockchain and the future of money. Because now, not only can you buy and sell bitcoin and ether within the Wealthsimple Trade app, you can also transfer your coins into, and soon out of, your account. That means if you, say, bought bitcoin on another, perhaps less-trusted marketplace before Wealthsimple became Canada’s first regulated crypto trading platform (not-so-humble brag), you can now move all your BTC into one handy place: a Wealthsimple crypto wallet. We’ll allow more coins soon beyond bitcoin and ether. In the meantime, we talked with Danish Ajmeri, Wealthsimple’s Head of Crypto, about why he’s jazzed about wallets, and why he suspects clients will be too.
First, what exactly are crypto wallets?
Well, for many people, having direct control over their digital assets is a huge part of cryptocurrency’s value proposition. They want the autonomy to control their assets directly, without needing to trust centralized intermediaries, like big banks. And a crypto wallet gives you a lot more autonomy. Now that clients can transfer crypto and use wallet functionality, they can move their digital assets between various crypto apps and platforms, like Wealthsimple.
I liked my old Wealthsimple crypto account. Why is this better?
First, if you like your crypto the way it is now, you don’t have to change anything; you don’t have to use these new features. The problem for some users, though, was that any crypto they bought through Wealthsimple was essentially locked in their accounts. It was a closed-loop system: clients could trade all they wanted, but they couldn’t transfer crypto in or out of our ecosystem; the crypto they owned was basically stuck in a giant Wealthsimple wallet.
Some clients want greater control of their assets. Which we absolutely understand.
And this closed-loop system was bad?
Not at all. It worked fine for most people, and a lot of people will continue to use Wealthsimple the same way. But, as I said, some clients want greater control of their assets. Which we absolutely understand. Now that we’ve enabled wallet functionality, clients can purchase coins on other exchanges, for instance, and then transfer them to the Wealthsimple app for safekeeping. And once we enable withdrawals — which we will soon — clients will be able to buy crypto through Wealthsimple and then move it elsewhere.
Wait, why would someone want to move crypto out of Wealthsimple?
The idea behind cryptocurrencies and blockchain is to have an open, transparent system, and there are currently all sorts of applications being developed on various platforms expanding on this idea — NFTs, blockchain games. The list goes on. The trouble with our old system was that clients couldn’t withdraw and use crypto bought through Wealthsimple to engage with any of these apps. Once we enable withdrawals, they’ll be able to. We suspect this level of freedom will be really attractive to clients as new crypto ecosystems emerge.
There are tons of cryptocurrencies. Can clients transfer any of them into the Wealthsimple app?
To start, we’re enabling bitcoin and ether transfers, but we’ll expand to allow deposits and withdrawals of other popular coins in the coming months. We know that’s something people want. (Please don’t try to transfer other tokens in the meantime.)
Can you give me an example of how or why I might transfer crypto today?
Sure. First, deposits: let’s say you made a beautiful drawing of your dog and turned it into an NFT. And let’s say the world loved your dog NFT, and you sold it for a lot of money. If you’re a Wealthsimple client, you can now sell your NFT on a marketplace, like OpenSea, then transfer the ether you made to our trusted platform, where you can either store it or sell it for dollars. Now a withdrawal example: if you want to play a crypto game, like Axie Infinity, you need to have your own personal crypto wallet holding ether to buy and use the Axie characters. Once we enable withdrawals, you can buy ether from Wealthsimple and then move it to a personal wallet so you can play.
So I’ll need a personal wallet, too?
If you want to transfer coins out of Wealthsimple, yes. You’ll need what’s known as a self-custody wallet. Our wallets are hosted, or custodial, wallets, which basically means that we take extra steps to keep your crypto secure, like keeping most of it in offline cold storage, so you don’t have sole responsibility of protecting your assets. We’ve also got insurance. You won’t get that with self-custody.
Wealthsimple wallets are safer than other kinds of wallets, then?
We’re trying to be extra careful. When we built our crypto platform (the first regulated way to trade crypto in Canada), we worked closely with regulators to try to make sure it was as dependable as possible. We’ve been equally diligent in developing our transfer and wallet functionalities. I think Wealthsimple’s track record of building top-notch trading tools speaks to the level of care and attention that we put into these sorts of things.
Crypto trading involves risk. To get more information on our products, investment decisions, fee schedules, user testimonials, promotions & more visit wsim.co/disclaimers.
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