BaFin licenses bitcoin lender to operate independently, worldwide
Leading peer-to-peer blockchain lender, Bitbond, has been granted a licence to "engage in small business financing" in Germany by the country's Federal Financial Supervisory Authority (BaFin). Working in bitcoin and now being able to operate independently of banks increases the attractiveness of Bitbond as funding source, particularly for under-banked communities, SMEs and online sellers. Established in 2013, Bitbond, which issues loans of up to $10,000, has already originated more than 1,400 loans and has clients in more than 120 countries. 

As the very first blockchain-based financial services provider, the FinTech startup Bitbond received its own licence by German financial regulator BaFin. The startup from Berlin connects small business owners who need a loan with investors and uses the bitcoin blockchain for payment processing.

The last time we wrote about Bitbond was when we mentioned the company as one of the hottest European FinTech startups in 2015.

Bitbond was founded in 2013 and enables individual and institutional investors to invest in various interest rate regions. The BaFin licence is a huge step for Bitbond as it enables the startup to be active independently of banks. The BaFin licence makes Bitbond also geographically independent, which will help the company to fulfill its mission which is to make financing and investing globally accessible.

Radoslav Albrecht, founder and CEO of Bitbond, evaluates the receipt of their BaFin licence as follows: “With our own BaFin licence that allows us to conduct asset brokerage Bitbond is active independently of banks. This provides us with a significant efficiency advantage. Other FinTech startups normally rent a licence and by that are bound regionally.”

He continues: “We are proud to be one of the first regulated financial services providers in the entire blockchain space. This creates legal security with investors on our platform and shows, that Germany is a good location for innovative and globally active financial services providers.”

Before founding Bitbond, Radoslav Albrecht Bitbond worked for Deutsche Bank London in sales and trading and Roland Berger Strategy Consultants.

The German FinTech startup already counts users from over 120 countries and originated over 1,400 loans to date. With Bitbond, investors finance small business loans and get access to attractive interest rates. Most of the platform’s borrowers are online sellers who run a shop on sites like eBay or Amazon. Bitbond conducts a credit check based on the revenue data of the merchants. The borrowers use the funds for inventory and working capital financing.

The German financial regulator BaFin classified blockchain based digital currencies like bitcoin already back in the year 2011. Thereby Germany is one of the few countries where there is a clear regulatory framework for blockchain based services. By using the bitcoin blockchain for payment processing Bitbond and its users are independent of banks.

So far, Bitbond raised about $940K in seed funding from prominent European VC firms like Point Nine Capital.