The German bank online Bitbond uses bitcoin to transfer the money of its loans

According to Reuters, Bitbond uses bitcoin instead of SWIFT, an international fund transfer system, and does so in order to lend money around the world quickly and at low cost.

“Traditional money transfers are relatively costly due to currency exchange fees, and can take up to a few days.” These are the words of Radoslav Albrecht, who founded the online bank in 2013.

The clients have the money from the loans in tokens like bitcoin for a few seconds or minutes, and as soon as the transaction has been processed, they are exchanged for the official currency of the receptor  country.

Currently, most banks use the SWIFT network for international transactions. In this system, users have to pay fees to the issuing bank and the receiver, and they also have to pay for the currency exchange.

On the other hand, it should be noted that SWIFT, in addition to allowing the transfer of funds, also allows them to be carried out safely between banks in different countries.

It seems that using blockchain the process is more efficient. And this is shown by the data Bitbond shows on its website: more than 10 million dollars in 2,500 loans made to users in 120 countries, mainly small entrepreneurs or self-employed people.

While traditional banks have invested and continue investing large amounts of money in their ‘reconversion’ and adaptation to the new times, platforms such as Bitbond arisen in 2013, just needed 3 years, to officially become a bank in 2016.

At first, Bitbond customers could only operate with bitcoin loans. Over time, payments in Fiat currencies have also been made possible and thanks to the use of bitcoin in transactions.

Bitbond is a bank. The innovative part of its strategy is to have made peer-to-peer loans possible. Small peer-to-peer loans can become a very important resource for developing countries, if we remember that approximately 38% of the world’s population lacks a bank account. From my point of view, this is adding value to a service.

Databases & Blockchain Specialist

Living the change of economic, social and personal paradigm.

Nuria de las Heras

Nuria de las Heras

Databases & Blockchain Specialist Living the change of economic, social and personal paradigm.