We’ve published numerous posts on bitcoin and fintech in Germany. A new start-up has combined both of these in one company. Called Bitbond, the company is taking attempting to beat out other Berlin-based fintech offerings and take advantage of the game changing technology.
The number of global online transactions is increasing exponentially, meaning the need for a fast and secure currency has never been greater. This is where the blockchain comes into play. Put simply, the block chain is a digital ledger in which transactions made in bitcoin, or another crypto-currency, are recorded chronologically and publicly.
In Berlin and elsewhere, there is no shortage of financial technology, or FinTech, startups ready to step in and make use of this technology, but Radko Albrecht’s Bitbond, a Berlin-based FinTech, is leading the way with the technology, specialising in international peer-to-peer bitcoin lending.
Bitbond is the first global lending platform for small business loans, using blockchain technology to connect creditworthy borrowers with individual and institutional investors.
Why bitcoin? The crypto-currency is easier to transfer from lender to borrower because it cuts out the middle man, or third parties, like banks, as Albrecht explains. After the borrower receives the currency, he or she can exchange it into their currency of choice (for a small fee).
The opportunity is attractive to lenders, who can invest from anywhere between six weeks to five years, because it lets them diversify their investment portfolio online and take advantage of high interest rates. They range between 10 and 35 per cent, which is competitive for small business loans, says Albrecht.
Also, borrowers who might be denied loans from traditional institutions can lend money if they pass Bitbond‘s unconventional credit check. The startup looks at a user’s online business accounts, like Paypal, Ebay and Amazon, the CEO explains.
Bitbond has roughly 80,000 registered users, roughly 10 per cent are active on the site. Roughly 60 per cent of the users are borrowers who can only take out one loan at a time. It has funded more that 1,600 loans for a value of more than 1.3 million euros.
More information about Bitbond can be found here.