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.