Business 14 May 2018Gerald Fenech
German online bank ditches SWIFT for cryptocurrency
As the cryptocurrency market continues to grow, banks are ever more so wary of the digital currency although things might be changing in Germany. In fact, Germany’s Bitbond, an online bank founded in 2013 by Radoslav Albrecht, has come up with an innovative method to make use of cryptocurrency’s borderless nature for international loan payments.
Bitbond has a considerable history in the use of cryptocurrencies like BTC. The online bank has been processing no less than $1 million a month in loan payments with BTC every month, and was also the first bank to use the digital currency way back in 2013. Albrecht is a forward looking visionary on the adoption of cryptocurrencies and has further plans to adapt the bank’s services to this end.
Bitbond is clear enough when describing what it intends to do on its website:
“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.”
Although several independent financial observers and even seasoned cryptocurrency traders only look at cryptocurrency as a speculative asset, Bitbond appears to have found an interesting business model where digital coins compete with more traditional systems. Albrecht is considering replacing the cumbersome and dated SWIFT payments system with BTC. The former is quite slow and very expensive to use so there might be advantages in using the digital currency for fast cross border payments.
In an interview with Reuters TV, Albrecht explained that Bitbond is looking at the possibility actively and are testing it with their customers.
“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,” according to Albrecht.
The volatility of BTC is reportedly making businesses reluctant to accept the cryptocurrency, which Bitbond hopes to fix by exchanging the digital currency almost immediately to fiat currency. Bitbond has grown consistently in popularity since 2013 with 24 employees from 12 countries and over 100 clients with transactions of around $1 million a month.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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