Radoslav Albrecht, a German businessman, has founded a bank that will resort to Bitcoin for its international money transfers. Albrecht states that Bitbond’s use of cryptocurrency will allow for quicker money transfers and lower costs than standard banks.
“Traditional money transfers are relatively costly due to currency exchange fees, and can take up to a few days. With Bitbond, payments work independently of where customers are. Via internet it is very, very quick and the fees are low,” said Albrecht.
Clients who use Bitbonds hold onto the cryptocurrencies for a few minutes before having them exchanged for local currency, ensuring that they will not have to deal with the volatile crypto market.
Founded in 2013, Bitbond has become the officially licensed bank no on expected with a large number of investors. There are currently 24 employees under it from over ten different countries, managing loans for approximately 100 clients. The loans amount to about a million dollars each month.
Albrecht claims the majority of his customers are small business owners or in freelance, all needing quick and affordable solutions to handling international loans. This is where crypto steps in to help solve these stresses, facilitating the lives of people weary of standard overseas fees. The loans are small compared to those of Bitbond’s sister banks, amounting to $50,000 at most.
Bitcoin is not new in terms of being used for collateral in loans, but it is now the dominant actor in aiding international loans. With Bitcoin proceeding at such a quick rate in Germany, it is no surprise that the first bank this involved in it would be from the nation. Germany is second only to United States with regard to Bitcoin’s popularity in the nation’s business transactions.
While Bitcoin and other cryptocurrencies are just getting started in the world, there are still many risks to engaging in crypto-based transactions that do not exist in traditional currencies. The most blatant is the unstable and fluctuating nature of cryptocurrencies’ values, which makes the safety of long-term investments almost non-viable. That being said, Bitbond clients do only hold these cryptocurrencies for a short period of time, meaning they are usually in a safe place when expecting these loans.