Bitbond, an online bank that was founded in Germany in 2013 by the German Radoslav Albrecht, has found an innovative application for bitcoins’ boundless nature: international loans.
Bitbond was the first to use bitcoins to grant and pay out a credit in traditional currencies internationally, not only as collateral for these granted loans. Bitbond currently processes approximately $ 1 million in loan payments per month.
As the company explains on its website:
“By innovating in payments and credit scoring, Bitbond’s financial inclusion is a reality all over the world.All payment transactions on Bitbond are carried out via the bitcoin blockchain, which is why our service is available worldwide via the internet and independently from banks.”
Although many outsiders (and even hodlers) see Bitcoin as a very speculative share, Bitbond has developed and implemented a business model that competes with traditional banking systems. The use of bitcoin was a smart move for Albrecht as an alternative to the Swift payment system, which is slower and more expensive.
“Traditional money transfers are relatively expensive because of exchange rates that the banks use and they can also last a few days,” Albrecht told Reuters TV in his office in the trendy district of Prenzlauer Berg in Berlin. “With Bitbond, payments work independently of the location of the customers, via the internet it goes lightning fast and the costs remain low.”
According to Albrecht, the big disadvantage is the volatility of the crypto coin.
As CCN published in December, due to these highly volatile exchange rates, companies are reluctant to introduce bitcoin as a means of payment. Bitbond avoids this problem because their customers only hold the tokens for a few seconds or minutes until their loan is published on the blockchain and exchanged for the currency of choice.
The basic principles of Bitcoin regarding the cheap transfer and the low rates promote the success of the company.
Bitbond has been gaining popularity since 2013. The company is already mentioned in Forbes and Lend Academy. The news remains positive, and with the help of venture capital financing, Bitbond currently employs 24 people from 12 countries. The efficient and flexible team provides the 100 customers of the Bitbond, who raise them $ 1 million every month.
The customers usually consist of small companies and freelancers that contract smaller loans, which do not exceed $ 50,000. In addition, the company received an official license as a bank in 2016, emphasizing sustainability and the successful track record.
Germany is a pioneer in the adoption of Bitcoin. While other countries, such as India, remain skeptical and try to curb the regulation of cryptocureency, Germany, along with the United States, is open to companies that use cryptos. According to Bitnodes, a service that keeps track of the transmission of information transmitted by Bitcoin nodes, Germany is second after the United States.