Bitbond, a German online credit bank made the first international money transfer in bitcoins bypassing the SWIFT system. Bitbond uses the mechanism that eliminates the risk of cryptocurrency volatility, Reuters report on Saturday .
Why it is important
- Berlin-based Bitbond was one of the first online credit banks to provide customers with the opportunity to issue and receive loans in bitcoins at a significantly cheaper and faster rate than traditional credit.
- The German bank is also the first bank to offer a system that avoids risks despite the high volatility of Bitcoin. Customers only hold the coin for a few seconds or minutes, and then it is converted into traditional currency.
According to Bitbond’s CEO Rodislav Albrecht, traditional transfers are quite expensive and the necessity to use the SWIFT system can drag out the process for several days which was the deciding factor in the switch to cryptocurrency.
“With Bitbond, payments work independently of where customers are. Via internet it is very, very quick and the fees are low,” says Albrecht.
According to him, the transfer takes just several minutes. The customer's money is first converted into cryptocurrency and converted once again into the national currency of the country the request came from. This is advantageous as it avoids the risk of high volatility of the crypto-exchange rates. Earlier Bitcoin (EXANTE: Bitcoin) was also used to provide loans, but never for the transfer of credits at the international level as an alternative to the SWIFT system.
By Nadya Astam