Clearly, virtual currencies are expanding everywhere around the world, including traditional financial institutions. According to Reuters, a German online bank – known as Bitbond – allows clients to transfer loans anywhere in the globe just by using Bitcoin.
German Bank Bitbond Works With Bitcoin
Bitbond has decided to adopt the famous virtual currency so as to bypass the SWIFT international transfer system. During the last year, SWIFT has proven to be vulnerable to hackers and other cyber attacks.
Radoslav Albrecht, Bitbond Founder, commented:
“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 fees are low.”
Clients are able to hold the loans in digital tokens, including Bitcoin, just for some seconds or minutes and they are then exchanged back to the local currency. This helps to avoid the fluctuations in cryptocurrency prices.
Until now, Bitcoin has been used as collateral for loans, but never as a way to transfer credit for international transactions.
Other cryptocurrencies and systems are starting to replace the SWIFT platform. We can mention the Ripple product xRapid – which reduces times and costs of transactions. As we wrote some time ago at CryptStorm, financial institutions that used the xRapid service developed by Ripple were able to save between 40-70%.
Bitbond has been launched in 2013 by Mr. Albrecht and gained popularity in recent years. At the moment, his office is employing 24 individuals from 12 different countries that are managing the loans for 100 clients. Every month they handle around $1 million in loans.
Most of the clients of the bank are small businesses, freelancers, or small companies that need some funds. Since 2016, Bitbond is considered a bank, when it was officially licensed.