Certified German Bank Facilitates Transfer of Credit Using Bitcoin
Bitbond, the bitcoin lending platform for small business loans, now lets clients transfer loans across the globe via bitcoin. This is the first time BTC’s been allowed for transferring credit internationally.
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Bypass the SWIFT
Founded by Radoslav Albrecht, Bitbond now lets clients, specifically small businesses, transfer loans internationally using BTC.
The most interesting dynamic at play? Bitbond is making use of bitcoin as opposed to the SWIFT international transfer system due to the cryptocurrency’s quick transfers and low fees.
Albrecht noted to Reuters TV:
“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.”
Bitbond clients do not have to worry about BTC price fluctuations as the online bank only holds the loan in bitcoin for minutes and thereafter exchanges it for the desired fiat currency. The exchange duration is short and therefore BTC price swings do not subvert the process.
Peer-to-Peer Loans Using Bitcoin
Bitbond’s use of bitcoin is just one clear example of how cryptocurrencies can be employed in traditional financial institutions and credit businesses around the world. Many banks globally are piloting projects dealing with the blockchain, the underpinning technology of cryptocurrency, but none hitherto have made direct use of cryptocurrencies.
The German online bank has gained a fair amount of popularity and facilitates loans for over 100 clients equating to $ 1 million USD monthly. As reported by Reuters, a large percentage of clients are freelancers and small businesses owners.
Bitbond’s loan amounts are typically small and usually do not exceed $50,000. The standard loan period is from six weeks to three years. Moreover, willing individuals can also offer loans to borrowers resulting in lower interest rates for borrowers and higher interest rates for the lender as compared to conventional loans.
Will financial institutions use bitcoin to transfer credit? Share your views in the comments section.
Images via Bitbond, EU-Startups