Bitbond, an online bank founded in Germany in 2013 by German Radoslav Albrecht, has found an innovative use case for bitcoin’s borderless nature: international loan payments.
It was the first to use bitcoin to transfer credit in currency internationally, not only as loan collateral, and it’s currently processing about $1 million in loan payments per month.
As the company explains 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.”
While many outsiders (and even hodlers) see bitcoin as only a highly speculative asset, Bitbond has found a business model that competes with traditional systems. Using bitcoin came as a smart move for Albrecht as an alternative to the Swift payment system, which is slower and more expensive.
“Traditional money transfers are relatively costly due to currency exchange fees, and can take up to a few days,” Albrecht told Reuters TV in his office in Berlin’s fashionable neighborhood Prenzlauer Berg. “With Bitbond, payments work independently of where customers are. Via internet it is very, very quick and the fees are low.”
The downside, according to Albrecht, is the coin’s volatility.
As CCN reported in December, businesses are reluctant to accept bitcoin as payment because of its wildly shifting exchange rates. Bitbond avoids this issue because clients only posses the tokens for their loans for a few seconds or minutes until it’s ready to be exchanged to the national currency that they prefer.
Bitcoin’s core premises of cheap transfer and low fees drive the business’ success.
Since 2013, Bitbond has grown in popularity. The company has been mentioned in Forbes and Lend Academy. The news has been stayed positive, with VC funding Currently, Bitbond employs 24 people from 12 countries. The lean team takes care of the bank’s 100 clients, which bring in $1 million each month.
The clients are mostly made up of small businesses and freelancers who do not exceed loans over $50,000. The company also became officially licensed as a bank in 2016, solidifying its longevity and successful track record
Germany is a global forerunner in Bitcoin adoption. While other countries remain skeptical and enact anti-crypto regulation, such as India, Germany, along with the United States, is open to crypto-related businesses. Germany is second to the United States, according to Bitnodes, a service that tracks the transfer information broadcast by Bitcoin nodes.
Images from Shutterstock
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