Bitcoin keeps transforming lives and economic activities around the globe on a diurnal basis. The latest solution is an instantaneous bank transfer from the United States to Mexico using Satoshis at the cost of two percent.
William Madden, CEO of Bridge21 told the Cointelegraph in an interview that, "Speed of delivery varies based on the sending and receiving countries, but the transaction is generally completed in minutes during regular banking hours, and often in seconds."
With a platform connected to exchanges in different countries, when a customer sends funds, it is deducted from his bank account in the sending country. Then Bitcoins are bought in the sending currency, and simultaneously Bitcoin is sold in the receiving currency, and then funds are deposited in the recipient's bank account.
Bitcoin vs. bank transfers
This innovative financial transaction service stemming from mighty Bitcoin beats traditional bank wires in every sphere. It basically eliminates hidden exchange rate fluctuation charges, transfer fees and duration the funds will take to get to its final destination.
Explaining further, Madden stated that the intent is to send money across the globe as we communicate with anyone around the world today. In an analogy, the remittances expert said, it is faster and cheaper to physically mail money to someone in another country than it is to send electronically.
Madden says:
"Businesses and individuals will come to expect this type of performance in the future, just like they do today with information. We see a demand for these services coming from places we did not expect, from international emergency payments to the underserved country to country corridors that are underserved today by traditional remittance companies."
Main obstacles
Apparently, the company's decision to use Bitcoin as clearance resides in the cryptos decentralized nature and the remarkable lower systemic risk compared to other options. However, it concedes uncertainties associated with exchanges in specific countries.
"Other options either lack Bitcoin’s scale or depend on ‘permissioned' or centralized consensus and/or development support, making them less likely to serve as a stable payment and settlement rail far into the future”, Madden notes. “That said, our systems are largely agnostic to the underlying cryptocurrency we use to move money. If another option makes sense in a particular circumstance, we would evaluate it objectively and have done so in the past."
To mitigate the risk involved in international clearance the company carefully verifies the customer’s identity using a series of risk management techniques with customer transactions.
Risks associated with exchange insolvency and Bitcoin’s price volatility are minimized since the settlement is very close to instantaneous, and funds are not stored on third party exchanges for any significant amount of time.
The issue of Trump’s wall
On the issue of how much has been wired so far to Mexico since the inception of the service a few weeks ago, the CEO of Bridge21 declined to answer citing competition and contractual reasons.
When Cointelegraph asked whether the service will not incur the wrath of Donald Trump's government, this was Madden's response:
“I could see NAFTA revisited under the current administration, but I would be genuinely surprised to see trade embargoes or severe capital controls put in place between the United States and Mexico. If I am wrong, and a scenario like this unfolds, we would have to comply because of the nature of our business.”