German Bank Considers Using Bitcoins To Transfer Loans Anywhere In The World
Bitcoin and the blockchain technology has really paved the way to reduce the influence of centralized banking institutions over your money. In one of the most novel and innovative ideas of the use of Bitcoin, German bank Radoslav Albrecht through its online bank called Bitbond will make use of the world’s largest digital currencies to transfer loans internationally.
According to the reports from Reuters, Bitbond is using Bitcoins in order to circumvent the Swift international transfer system and to lend money across the globe instantly and at reduced costs. This is the first bank to use this cryptocurrency to transfer global credits and is currently processing nearly $1 million in loan payments per month.
In a word with Reuters TV, Albrecht told “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.”
The company on its website further explains that “By innovating in the fields of payments and credit scoring, Bitbond makes financial inclusion a reality around the world. All payment transactions on Bitbond are conducted via the bitcoin blockchain. Therefore our service is available worldwide via the internet and is independent of banks.”
Many financial institutions and players have denounced the use of Bitcoins considering it as a highly speculative and volatile asset. However, Bitbond has found out a way to deal with this while developing a model which can compete with the traditional institutions.
Bitbond keeps the volatility of Bitcoin in check by letting the customers hold the cryptocurrency only for a few seconds or minutes and are exchanged back to the currency of the country where the funds are being transferred. These instant transactions help to get a control on Bitcoin’s fluctuating rates while at the same time making use of its blockchain network for instant transfers at reduced costs.
Founded five years back in 2013, Bitbond employees 24 people at the moment from 12 different countries. The bank is currently serving over 100 clients at the moment. These clients include freelancers and businesses with a maximum loan capping of $50,000.
Germany is one of those European nations that has been at the forefront of Bitcoin adoption. When several countries have been vouching for stricter regulatory measures and greater control on crypto-related activities, Germany’s regulatory bodies have kept a friendly tone so far with its local crypto-investing community.