German Bank Allows Users To Transfer Loans Anywhere In The World Using Bitcoin

With the US set to blacklist Iran from global dollar-based transactions, here's an idea for Tehran: use Bitcoin to make, and accept, payments from its trading partners. And, there's even a bank ready to serve Iran when it comes knocking: according to Reuters, German Radoslav Albrecht has founded an online bank that allows clients to transfer loans anywhere in the world using Bitcoin.

That's right: bitcoin's money-laundering, capital-controls evading capabilities - the reason why we said it's going much, much higher back in September 2015 when it was just above $200 - are finally going mainstream. And not only that, but in one move it is disintermediating the multi-trillion industry behind private money creation known as "banking."

It's therefore hardly a surprise that the company's motto is "see no bank, hear no bank, speak no bank."

Albrecht's Bitbond uses Bitcoin and other cryptocurrencies to completely bypass the Swift international transfer system which has a monopoly and ultimate veto power on who is in - and isn't - in the global petrodollar club, to lend money across the globe rapidly and at low cost.

“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.”

But what about the risk of intermediary price fluctuations?

That, too, has been factored in as clients hold the loans in their choice cryptocurrency for only for seconds or minutes until they are exchanged back into the currency of the country where they wish to receive the funds, avoiding the crypto currencies fluctuating exchange rates.

Bitbond's novelty is that while bitcoin has been used as collateral for loans, it never served as a way of transferring credit in currency internationally. And judging by the company's rapid growth, there is more than enough demand for its services: Albrecht’s service, which has been growing in popularity among clients since he launched the company in 2013, employs 24 people from 12 countries who manage loans for 100 clients amounting to around $1 million each month.

Most clients are small business owners or freelance workers, Albrecht says. Loans are relatively small and don’t exceed 50,000 dollars. However, those amount are set to grow: in 2016, Bitbond was officially licensed as a bank and has gained many investors since. More importantly, not a single regulator has reached out to Albrecht to tell him to shut down his service, and for good reason: according to Bitnodes, adoption of bitcoin has been rapid in Germany, only trailing the U.S., based on the location of all the bitcoin nodes that transmit data about new transactions.

Comments

OverTheHedge Xibalba Sun, 05/13/2018 - 13:38 Permalink

You can use peer to peer transfer to avoid all currency exchange fees, banks etc. https://transferwise.com. There may be others, but I have used these people a number of times for small amounts (nothing over $10,000), and it worked extremely well. It even allowed me to get money out of Greece despite capital controls, as the money I sent to the UK never left Greece, (they match up someone in Greece who needs funds from the UK, and my Greek money goes to the Greek, while the complete stranger's UK money goes to my UK account),  therefore no currency exchange fees or banking parasites required.

 

 

In reply to by Xibalba

GeoffreyT Disgruntled Goat Sun, 05/13/2018 - 21:42 Permalink

Except that hawala doesn't involve interest in any formal contractual sense, because the charging of interest is haram. (Unlike the Red Sea Pedestrians, who are permitted to charge interest to us goyim but not to each other... Muzzies aren't even allowed to charge interest to us kuffār).

That doesn't mean that the suppliers of loan capital don't earn a return - they get fees.

A fixed-fee loan where the fee does not vary with the term of the loan... well, that is a disincentive to rapid repayment unless there's additional fees for late repayment.

At the end it all behaves like interest... as it should.

In reply to by Disgruntled Goat

mind-body-spirit silverer Sun, 05/13/2018 - 11:44 Permalink

Wow, great video! I like the part about meeting payroll with stock options from the failing bank, ha ha, good one! Also the part about the derivatives getting paid out first, even when there isn't enough money in existence to cover all the debts! Ha ha ha, this is hilarious! Thx for posting! I laughed until the tears rolled down my cheeks!

Short answer to your question, it's because we're all still using fiat, obviously.  But this is a significant development, because it's pointing to the fact that crypto actually has functionality. Storing wealth isn't its primary purpose - doing transactions is its primary purpose, so here we go.

There is some thinking in the crypto space about governments just investing public money into e.g. bitcoin straight up. It's not ridiculous, when you think of it in terms of Metcalfe's law, the value of the network increases with the number of users - crypto is a network thing. As soon as some big player sees that, then we are into the next chapter. It's happening already.

Actually I wish crypto weren't the future. I wished that about computers in 1975 too. Nobody asked my opinion though, and now look! Bit of a mess.

 

In reply to by silverer

Semi-employed … Arnold Sun, 05/13/2018 - 11:04 Permalink

Bitbond is just peer-to-peer lending with lenders putting up crypto and borrowers receiving fiat.  They are targeting EBay sellers and other online small businesses. This article is overblown.  Imagine that on ZH! It is not going to replace SWIFT.  There are already other crypto lenders out there. SALT being one (another good crypto buy along with EOS).

In reply to by Arnold

silverer Sun, 05/13/2018 - 09:53 Permalink

Obviously, they have found a way to track the movement, and are practicing a strategy they have mapped out. Don't be fooled for a minute. Crypto is the crucifix to the vampire, and the big banks will ceaselessly work for its destruction or alternately, control over it.

Sabibaby silverer Sun, 05/13/2018 - 10:38 Permalink

duh... banks aren't just going to rollover and be like "ok crypto, you win fractional reserve banking is a thing of the past. It made us rich and powerful beyond belief but we're done now."

Wars happen over shit like this. Anti-crypto folks happily bend over and spread their cheeks for the banking elite thinking someday we'll all be carrying around satchels filled with coins to transact for groceries, gasoline, and to pay our utility bills. 

In reply to by silverer

lookslikecraptome Sabibaby Sun, 05/13/2018 - 17:10 Permalink

That is type of crypto evangelical shit that is PATHETIC.   They will survive with or with out owning crypto.  The Kool aid people drink about crypto is amazing and so fucking stupid. u really think the banks are threatened by crypto, when only one dude has 25% of all the coin market cap in one account in cash?. That would be buffet. How many other's have that money? A bunch of people. and how many banks have a gazillion more than the crypto cap laying around in cash of some sort or another.

cap wise, ur crypto is worth a nickle to my ten or 20 dollars US. I am guessing you r 15 years old  or new to the world of finance/ politics and nationry. 

"If they want to survive they better start buying!!!..." Stupidly retarded comment.

In reply to by Sabibaby

GeoffreyT lookslikecraptome Sun, 05/13/2018 - 22:40 Permalink

when only one dude has 25% of all the coin market cap in one account in cash

Thing about cash: it can go to its marginal cost of production real quick.

There are still people alive who lived through the Weimar hyperinflation - people who started life asset-rich (including large nominal cash balances), but who wound up selling everything they owned as the purchasing power of their cash balances declined towards zero.

(The reason I'm using Weimar as an example rather than, say, Zimbabwe: Germany in the inter-war period was a vibrant industrial economy and yet bad monetary policy fucked it in the arse; by contrast Zimbabwe was always a basket case once white capital fled)

But on Zimbabwe: as I have said before, I keep a hundred trillion dollars with me pretty much at all times. It's a 2008 $Zim 100,000,000,000,000 note, and it is useless except as an ornament and a cautionary tale.

.

The thing keeping $US above its cost of production is 'excess' reserve demand: I say 'excess' because a very large proportion of USD-denominated holdings at central banks are there to facilitate USD-denominated international trade, and the USD-denominated segment of international trade is orders of magnitude greater than it would be if it was just for US-sourced merchandise trade. 

And that, in turn, is because international trade in energy (oil, gas, and so on) is priced in dollars.

Until recently, major exporters of energy (Russia, especially) were happy about that, because it converted into growing amounts of domestic currency (e.g., rubles) because of domestic-currency weakness.

Major importers of energy (e.g., China) were happy about it too, because they had large and growing merchandise-trade surpluses with the US and so were accumulating large USD balances endogenously.

Both of those things have changed (notwithstanding the recent uptick in USDRUB: it's still 20% lower than it was 2 years ago), and - what's more relevant - both China and Russia (and to a lesser extent, Iran) now understand that repudiating the petrodollar is a sound strategic and national-security decision.

.

Any significant switch from USD for global energy pricing, would be absolutely fucking catastrophic for US inflation (and therefore, the purchasing power of US cash balances).

Take a look at a chart of the Zimbabwe stock index before 2008: everything looked awesome.

In reply to by lookslikecraptome

marysimmons silverer Sun, 05/13/2018 - 11:02 Permalink

Crucifix?  More like wooden stake through the heart.  Right now people can buy dozens of high quality cryptos directly with fiat on their smart phones (ABRA, Ethos), interchange them instantly, send them to any wallet in the world, or use them for purchases from merchants who will accept them.

Decentralized digital currencies are to fiat what the light bulb was to candles, the automobile was to horse and buggy, and e-mail was to snail mail.  Why use the SWIFT system to transfer $100Mil when it can be done in about 120 seconds at a cost of about $.40?  The tech is mind boggling and will make it very easy for Joe Six Pack to invest in and use crypto very soon  

In reply to by silverer

GooseShtepping Moron Sun, 05/13/2018 - 10:07 Permalink

I'm not sure what this article means by "transfer loans." This locution doesn't make any sense. "Transferring" a loan is just re-loaning it, no? Bitbond is just a money-changer who happens to accept Bitcoin. What is novel or noteworthy about that? Absolutely nothing.

The crypto-enthusiasts seem increasingly desperate in their search for narratives to justify their excitement.

Arnold tmosley Sun, 05/13/2018 - 10:20 Permalink

For me, it's not just crypto.
The sidelining of cash in any form, including my lovely physical , is the camel's nose under the tent.

Cash has a limit to spending, and over spending.
You haven't got any more.

Digital encourages spending, and debt due to its' ease of use and not watching our pennies any more.
The dollars will not take care of themselves.

Self control is available but not evident in any digital exchange methodology.

In reply to by tmosley