
German online bank uses Bitcoins to transfer loans - okket
https://www.reuters.com/article/us-germany-bitcoin/german-online-bank-uses-bitcoins-to-transfer-loans-idUSKBN1ID07Y
======
germanier
The title and article body claim that they hold a bank license but as far as I
can see[0] they only have a license as a financial service provider ( _FDI_ )
for investment brokering ( _Anlagevermittlung_ ) and proprietary trading (
_Eigengeschäft_ ). In particular they are not regulated as a bank with capital
requirements ( _CRR-Kreditinstitut_ ) and can't do their own lending business
( _Kreditgeschäft_ ).

On their website[1] they make no claim of being a bank. The text only speaks
about being a "regulated financial institution" and the footer states "unbank"
and "no bank". Their terms of use[2] clearly state that they are only a credit
broker, don't loan themselves, and are not party of the loan contract. This is
not banking and I'm not sure why Reuters uses that word so much. They don't
even mention once that this company is not the lender and heavily imply they
are.

[0]: in the database of the German Federal Financial Supervisory Authority:
[https://portal.mvp.bafin.de/database/InstInfo/institutDetail...](https://portal.mvp.bafin.de/database/InstInfo/institutDetails.do?cmd=loadInstitutAction&institutId=146194&locale=en_GB)

[1]: [https://www.bitbond.com/about_us](https://www.bitbond.com/about_us)

[2]:
[https://www.bitbond.com/terms_of_use](https://www.bitbond.com/terms_of_use)

~~~
sschueller
So much for accuracy of Reuters. What else do they get wrong when they can't
even tell when something is a bank or not?

Sad thing is these kinds of articles get translated and end up in hundreds of
papers all over the world all as fact.

~~~
dawhizkid
If you've ever read an article about something you know really well (company
you work for, someone you personally know well, topic you are an expert in), I
think you'll find that in most news articles there are
exaggerations/questionable numbers printed all the time.

~~~
dbasedweeb
And then the Gell-Mann Amnesia kicks in!

 _“Briefly stated, the Gell-Mann Amnesia effect is as follows. You open the
newspaper to an article on some subject you know well. In Murray 's case,
physics. In mine, show business. You read the article and see the journalist
has absolutely no understanding of either the facts or the issues. Often, the
article is so wrong it actually presents the story backward—reversing cause
and effect. I call these the "wet streets cause rain" stories. Paper's full of
them. In any case, you read with exasperation or amusement the multiple errors
in a story, and then turn the page to national or international affairs, and
read as if the rest of the newspaper was somehow more accurate about Palestine
than the baloney you just read. You turn the page, and forget what you know.”_

[https://www.goodreads.com/quotes/65213-briefly-stated-the-
ge...](https://www.goodreads.com/quotes/65213-briefly-stated-the-gell-mann-
amnesia-effect-is-as-follows-you)

------
foepys
> “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.”

I don't see this argument as valid. When was the last time the currency of a
solvent country fell more than 10% within a day? With Bitcoin this happened
just yesterday. This means you lost 10% of your money during fiat -> Bitcoin
-> fiat if you kept the Bitcoin for longer than 12 hours.

Edit: bitbond.com has a link to a "eBay SEO" optimizer in their website
footer. I don't know how much this says about their credibility.

~~~
paulmd
> "Traditional money transfers are relatively costly due to currency exchange
> fees, and can take up to a few days," Albrecht told Reuters TV

Giro transfers clear within minutes. This is the day-to-day mechanism that EU
citizens use to pay their bills. This smacks of a US-centric analyst who does
not understand the Euro market at even the most basic level.

The reality is the US is _decades_ behind the state-of-the-art in banking and
pretty much none of the issues that are relevant to US citizens are relevant
_anywhere else in the world_. Sending money to someone else's bank account
within minutes is pretty much a solved problem, for anyone who isn't living in
a 70s-era cheque-based world like the US banking system.

Sending some bits between highly trusted parties within a formal banking
system is not some unsolved problem that only Bitcoin can tackle.

~~~
badestrand
> Giro transfers clear within minutes. This is the day-to-day mechanism that
> EU citizens use to pay their bills.

Not true at all. This is just starting to get implemented in the EU. Until now
transfers took usually a full banking day, thus nothing happened on the
weekend and holidays. Last year over easter I had a transfer between two
German banks take 7 days because of that.

And international transfers are still a nightmare.

~~~
y4mi
It depends entirely on your Banks peering agreement.

It generally clears within minutes if you're transferring between
participating Banks. If not, the maximum amount of time they're permitted to
take is exactly one business day after they've accepted your order. This
acceptance is not necessarily the time you've entered the details on their
website. It is often, but there are some outliers that only accept them at a
specific time each day. (But still let you schedule them at all times.)

~~~
def_true_false
FWIW I've never seen a SEPA transfer take 'minutes'. Usually it takes around
one business day.

------
psergeant
> “Traditional money transfers are relatively costly due to currency exchange
> fees, and can take up to a few days”

I would like to see some worked examples here that take into account local
Bitcoin pricing and the time taken to withdraw from exchanges, vs Western
Union and other commercial “Send Money” organisations. The space is intensely
competitive, so I suspect the margin consumers pay if they do a minimum of
research is tiny, so I’m skeptical that Magic Bitcoin Magic is somehow making
this better.

~~~
tim333
Transferwise is quite cheap. I haven't been able to change bitcoins
efficiently to many currencies. Euros and usd are the main ones. I'd say
transferwise is probably quicker and cheaper but you never know. The actual
btc-fiat exchange can be very cheap if you are a 'maker' in the market.

~~~
Symbiote
For European currencies (I use GBP, EUR, DKK, SEK) I find Transferwise to
transfer within 5 minutes.

That's reasonable, as banks in those places usually support very fast local
transfers, and that's what Transferwise is doing. A bitcoin exchange could
meet this speed, but won't be able to beat it.

~~~
yani
Most cryptos are faster than any type of wire transfer except card payments.

~~~
madeofpalk
Very US-centric. Elsewhere in the world "wire transfers" \- transferring money
from one bank to another happens more or less instantly.

When I pay myself from my business account and it happens just about
instantly. Max I've ever waited was like 15 minutes.

Using Transferwise, a friend from Australia paid me back in the UK and it went
through in like 1 hour.

~~~
def_true_false
Isn't Transferwise basically just using their accounts in both banks to
achieve that, and rebalancing them later (if necessary)? That's not really
representative of the performance of the banking system, is it?

~~~
madeofpalk
For the international part, yes, but still the Me > transferwise and
transferwise > friend transfers are "wire transfers" and both of them happen
fast enough for the whole transaction to be completed in just a few hours.

------
Jdam
I went to a meetup once where Radoslav presented Bitbond. Referring to it as a
bank is quite a stretch.

~~~
viraptor
If it's registered as a bank, it's a bank. As long as you get all the usual
regulation and protection, why wouldn't you think it's a bank?

~~~
Jdam
In fact, it’s not registered as a bank. It’s registered as a financial
services company: [https://www.crowdfundinsider.com/2016/10/91093-brief-
german-...](https://www.crowdfundinsider.com/2016/10/91093-brief-german-
bitcoin-startup-bitbond-recieves-bafin-licence/)

In addition, it’d be quite weird if a random startup can get a banking license
just like this. Consider N26, the Berlin-based fintech “bank” and unicorn took
years and just got theirs some months ago.

~~~
viraptor
The article says: "In 2016, Bitbond was officially licensed as a bank and has
gained many investors since." Maybe the article is wrong then.

~~~
madeofpalk
It is.

------
joosters
Why would two currency exchanges (say USD->BTC then BTC->EUR) ever be cheaper
than one (USD->EUR) ? There’s nothing special about Bitcoin that means it will
have lower spreads than other FX exchanges.

~~~
jpalomaki
I don't think real issue here are the currency exchange fees, but the transfer
fees charged by banks and the logistics related to doing bank-to-bank cross-
border payments.

When transferring via Bitcoin, you only to get the recipients Bitcoin address
and that is. Do a bank transfer to another side of the world and you need to
find out bunch of information for the recipient (their bank details, probably
address etc). There's also a chance you will get some of this wrong and then
there will be a manual hassle to sort things out.

~~~
joosters
How are they avoiding these charges? The customer isn't requesting bitcoin, so
you still need to transfer the money from the recipient exchange into their
'fiat' account...

~~~
speedplane
This is obvious... once you establish trust from Bank A to Bank B (and
correspondingly Bitcoin account A and B), you can transfer the money very
quickly with 100% assurance it was transferred to A and B.

The older way of doing this would be based on expensive contracts, legal
regulation, and potentially intermediaries, who will happily take their own
cut.

~~~
joosters
The only intermediaries being added are the bitcoin exchanges. The loan
originator has to initiate a bank transfer from their account into bitcoin
exchange 1, and from bitcoin exchange 2 into the customer's account. That's
now two 'legacy banking transfers' instead of the normal 1. More
intermediaries, more transfers, more costs (and more risk of money loss unless
there is a similar amount of regulation & contracts in both cases).

~~~
speedplane
Not quite right. The old way of doing it actually worked like this: Bank A in
country X transfers money mega-bank B in country X. Mega-bank B transfers
money to mega-bank C in country Y. Mega-bank C in country Y then transfers it
regional bank D in country Y.

Bitcoin will allow smaller banks to transfer money without the help of the
giant banks who have built up relationships (and binding legal agreements)
over the years.

Honestly, even though some large banks bullish on bitcoin, the real benefit
will accrue to the smaller institutions.

------
mxschumacher
I've been a client for multiple years and have taken heavy losses on the loans
I have handed out

~~~
flatfilefan
What made you staying a client then?

~~~
mxschumacher
you can't just exit existing credit contracts. these aren't bonds that could
be traded.

------
neilwilson
They are using the banks of the bitcoin exchanges.

As a swift alternative that's fine, but you can't avoid banks if you're using
country denominations.

------
DEFCON28
If Bitcoin is such a good solution, why do they have to mislead with news
about banks that aren’t banks?

------
sleavey
Interesting. This is the sort of transaction that altcoins like Ripple and
Stellar try to facilitate, though in a more centralised way. I wonder if
Bitcoin's popularity will overcome its speed limitations in this instance.

~~~
RedNifre
Bitcoin's lightning network is currently maturing (it allows instant free
transfer of Bitcoins off-chain). That should work perfectly for banks, given
that unlike regular customers, banks don't transfer money only in one
direction, so the lightning channels should stay balanced for much longer.

~~~
spookthesunset
LN, aside from being complete vaporware, is most certainly _not_ free. Or,
it’s as free as bitcoin was promised to be “free”, in that it isn’t free at
all.

Not to mention that, should it ever prove to work at any reasonable scale, LN
is basically adding a layer on top of Bitcoin that gives up almost all of the
things that were supposed to be core values.

~~~
def_true_false
Nevermind LN, regular tx fees are virtually zero at the moment.

[https://transactionfee.info/charts/feerate/median](https://transactionfee.info/charts/feerate/median)

