Bitbond, a German online bank that lets clients transfer loans around the globe using bitcoin, has officially launched. It was licensed as a bank in 2016 and has gained many more investors since then.
Reuters, citing founder Radoslav Albrecht, reported that Bitbond uses cryptocurrencies like bitcoin to get around the Swift international transfer system in order to lend money globally at a lower cost and in a faster time frame. According to the report, this is the first time bitcoin is being used to transfer credit around the globe.
“Traditional money transfers are relatively costly due to currency exchange fees, and can take up to a few days,” Albrecht told Reuters TV. “With Bitbond, payments work independently of where customers are. Via internet it is very, very quick and the fees are low.”
Bitbond clients hold the loans in digital tokens for a few seconds or minutes, and then they are exchanged back into the currency of the country where the person is receiving the funds. This avoids the fluctuations in the price of cryptocurrencies. Most of the clients that use the service are small business owners and freelance workers with loans under $50,000. Reuters noted that adoption of cryptocurrency has been fast in Germany, second only to the U.S.
The price of bitcoin was under pressure late last week after news surfaced that authorities raided South Korea’s largest crypto-exchange, CNBC reported. UPbit wrote on its website, according to a Google translation, that it “is currently under investigation by prosecution, and we are [cooperating] diligently. UPbit services, such as all transactions and withdrawals, are operating normally. Your assets are kept securely in your account.”
Though South Korean authorities raided the exchange due to concerns over fraud, the South Korean Financial Supervisory Service (FSS) did not reply immediately to a request for comment by CNBC. According to CoinMarketCap, the exchange is the third-largest (with fees) in terms of trading volume, with the EOS-won pair representing the largest volume share.
Following the news, bitcoin dropped 5.5 percent to a little over $8,500. The price of bitcoin was $8,649.16 as of 12:50 p.m. on Friday (May 11), according to CoinDesk. By comparison, the cryptocurrency’s value was around $7,600 in February, a level that represented a new two-month low. That slide occurred as global concerns came to bear on the digital currency, tied primarily to bans on buying bitcoin levied by banks.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More