A German online bank, Bitbond, has started offering its clients the option to transfer loans with Bitcoin.
“Traditional money transfers are relatively costly due to currency exchange fees, and can take up to a few days,” Founder Radoslav Albrecht explained to Reuters TV. “With Bitbond, payments work independently of where customers are. Via internet it is very, very quick and the fees are low.”
Through this method, the company is basically able to bypass the Swift international transfer system.
Of course, there is always the issue of volatility with using cryptocurrencies in the loan transactions. To address this, clients will only hold on to the Bitcoins that they receive for a only for seconds or minutes. They are then exchanged back into the currency of the country where the funds are received.
Over the last couple of years, Bitcoin has been used as collaterals for loans. However, this is the first time that the cryptocurrency has been used to transfer loans internationally.