Most blockchain companies have only been founded in recent months and are now in ICO preparations – not so Bitbond. The Berlin-based Bitcoin startup has been in existence since 2013 and even without ICO, the global loan brokerage business is on a growth course. Bitbond has a BaFin licence and can therefore fully operate a global credit business. The peer-to-peer lending network enables direct transaction processing between borrower and lender via Bitcoin. In particular, small entrepreneurs in emerging markets can take out loans without a regular bank account – completely in line with the higher-level Blockchain-Narrativ banking the unbanked. In a personal interview we asked CEO Radoslav Albrecht about all the recent developments at Bitbond and the future of Bitcoin:
What has happened with the Bitcoin evolution?
There have been two major changes: We received our BaFin license as Bitcoin evolution scam at the end of 2016 and as a result we were able to win institutional investors as lenders in the first quarter of 2017. This is a significant change, as it allows us to guarantee faster financing of loan requests. The financing of loans by the aforementioned institutional investors now accounts for 80 % of the total financing on Bitcoin evolution. In summary, it can be said that the cooperation with institutional investors has provided us with enormous growth since 2017.
The crypto markets are currently extremely volatile. How does the market environment and the Bitcoin course affect your business model?
There is no immediate impact as we only use Bitcoin for payment transfer. Bitcoins are only held for a very short period of time, so we can more or less eliminate the exchange rate risk. However, there is an indirect effect, namely the increase in transaction fees. This causes us problems, but is still limited. Nevertheless, we are looking for alternatives to use Bitcoin more efficiently in order to keep the costs manageable.
You are in possession of a BaFin license. Do you think the attitude of BaFin and other regulators towards crypto financial services has changed in recent years?
What do you think we can expect from BaFin in 2018?
One development is that BaFin is becoming increasingly professional and has acquired more knowledge. In the meantime, BaFin has several employees who deal with Blockchain and FinTech. I suspect that this will result in a shorter processing time for future licence applications from the blockchain area. Our license application then took three years. I think if we were at the same point today as 2013, we would only need one year. From what I hear, it is similar with other regulators that they are accumulating more knowledge and becoming more professional in dealing with blockchain companies. This was also demonstrated in the hearing before the US Congress, where there were very favourable voices regarding blockchain and crypt currencies. In 2018, we expect the BaFin to be more responsive to the needs of smaller and more agile companies, without making too many assumptions.
What is it that is currently causing you the most trouble? What are the biggest challenges for you?
Our most important goal is to grow, and accordingly, anything that slows down that goal is causing us to struggle. There are no serious problems, but it’s always a triad of fundraising to expand our capacity, fundraising on the debt side to finance more loans, and recruiting or finding the right people. These are normal operational processes. I see the future in a very positive light. I am pleased that more and more people are interested in the topic of crypto currencies and blockchain and that technologies in this area are developing and becoming more reliable. All in all, I think the industry is on the right track.