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Using Bitcoins for international money transfers

Bitcoin could one day offer a simple, safe and affordable way to send money across international borders.

In September 2015, Commonwealth Bank, Westpac alongside Barclays, Credit Suisse and J.P. Morgan participated in the international R3 project with a financial innovation company, Ripple Labs. The R3 project is focused on creating a distributed ledger technology that works much in the same way as the ‘blockchain’ structure on which all Bitcoin transactions are based. The aim of the project was to help the banks transfer funds to one another at a lower cost.In the same month, the big four banks also suddenly withdrew banking services from several Australian Bitcoin companies. Although this move was linked to tighten anti-money laundering and counter-terrorism financing rules, it also prompted speculation that the banks were trying to gain the upper hand on it’s potential future rivals.

Coupled with the findings of a senate inquiry earlier in 2015 that found that Bitcoin should be treated as a regular currency, these signs point to Bitcoin being an important player in financial transactions of the future.

But what sort of impact will Bitcoin have on global finance and will it one day represent a safe and effective international transfer option? Let’s take a closer look.

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    What is Bitcoin?

    Bitcoin is a form of digital currency that was established in 2008. Commonly referred to as the currency of the Internet, it is based on a peer-to-peer network that allows users to pay others using a digital unit of exchange called Bitcoins. These Bitcoins are stored in the user’s digital wallet.

    This alternative payment system removes the need for a centralized authority and instead uses a public ledger known as the ‘blockchain’. This contains all processed Bitcoin transactions and allows new transactions to be verified and a user’s wallet to calculate its spendable balance.

    Just like any other currency, the value of Bitcoin is determined by supply and demand, and in its early years it has been known to fluctuate wildly in value. At the time of writing, 1 Bitcoin was worth $553 Australian Dollars. But if you wind back the clock just a little, after hovering around the $140-$150 AUD mark in September and October of 2013, by December the value of 1 Bitcoin had climbed above $1,362.

    If you want more information on how and where you can buy Bitcoins, our handy guide has all the details you need.
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    The impact of Bitcoin

    In the early years of its existence, Bitcoin came in for criticism from several quarters due to a range of factors. In some cases, it has received bad press for making it possible for people to anonymously purchase illegal goods online. Its volatility, as demonstrated above, has also been criticized, while others have pointed to the lack of regulation of Bitcoin as grounds for concern. It could lead to money laundering and even the financing of terrorism.

    Every new technology is bound to attract its share of criticism. Despite its detractors, Bitcoin does have many potential benefits for a range of people. It has been lauded by international migrants from companies such as the Philippines and India because it offers an affordable way to send money home to their families while working overseas.

    Bitcoin’s benefits include low transfer fees, protection against identity theft and the control they allow users to have over their own money. The Australian Digital Currency Commerce Association (ADCCA) estimates that around 7 per cent of the world’s $5 billion worth of bitcoin is in circulation in Australia.
    Bitcoin vs. PayPal

    Compare Bitcoin marketplaces

    Rates last updated November 22nd, 2017
    Details Features
    Binance Cryptocurrency Exchange
    Binance Cryptocurrency Exchange
    Trade 60+ cryptocurrency pairs on this up-and-coming exchange based in China. Multi-language support.
    • Trade Bitcoin Cash & Bitcoin Gold
    • Fees: 0.1% trading fee
    • Supported countries: Worldwide
    • Deposit methods: BTC, ETH, LTC, NEO & BNB
    Go to site
    CEX.IO Cryptocurrency Exchange
    CEX.IO Cryptocurrency Exchange
    Use your dollars, euros or rubles to buy and sell bitcoin at competitive exchange rates and with high maximums for verified accounts.
    • Buy/sell Bitcoin Cash
    • Fees: Varies by transaction
    • Supported countries: Worldwide
    • Payment methods: Wire, Credit/Debit, AstroPay
    Go to site
    HitBTC Multi-currency Exchange
    HitBTC Multi-currency Exchange
    Buy crypto with fiat (USD/EUR) and trade over 150 other digital assets on this Europe-based exchange platform.
    • Buy/sell Bitcoin Cash & Bitcoin Gold
    • Fees: Varies by transaction type
    • Supported countries: Global, with exceptions
    • Deposit methods: USD/EUR/Crypto
    Go to site
    Coinbase Digital Currency Exchange
    Coinbase Digital Currency Exchange
    Buy and sell bitcoin, Ethereum and Litecoin on one of the world's most renowned cryptocurrency exchanges.
    • Fees: Varies by transaction
    • Supported countries: 190 countries
    • Payment methods: Bank transfer, Credit/debit card, Wire
    Go to site
    Paxful Bitcoin Marketplace
    Paxful Bitcoin Marketplace
    Connect with bitcoin buyers and sellers through this peer-to-peer marketplace that accepts cash, credit and more than 300 other payment methods.
    • Fees: Varies by transaction, and PayPal no fees
    • Supported countries: Worldwide
    • Payment methods: Western Union, PayPal and many more
    Go to site
    Changelly Crypto-to-Crypto Exchange
    Changelly Crypto-to-Crypto Exchange
    Access competitive crypto-to-crypto exchange rates for more than 35 cryptocurrencies on this global exchange.
    • Buy/sell Bitcoin Cash
    • Fees: 0.5% + networking fees
    • Supported countries: Worldwide
    • Payment methods: USD, EUR, 35+ cryptos
    Go to site
    LocalBitcoins P2P Exchange
    LocalBitcoins P2P Exchange
    Trade fiat currency for bitcoin in person or online with this peer-to-peer exchange offering competitive fees and wide delivery options.
    • Fees: 1% commission for each completed operation
    • Supported countries: Exchangers in 248 countries
    • Payment methods: PayPal, Credit/Debit and more
    Go to site
    Indacoin Cryptocurrency Exchange
    Indacoin Cryptocurrency Exchange
    Use your credit or debit card to buy bitcoin and other cryptocurrency without having to verify your identity.
    • Fees: Varies by transaction
    • Supported countries: More than 100 countries
    • Payment methods: Payza, Credit/Debit cards (USD) and more
    Go to site
    Cancoin P2P Crypto Exchange
    Cancoin P2P Crypto Exchange
    Buy and sell bitcoin with privacy on this multi-signature, peer-to-peer exchange that supports a wide range of payment options.
    • Fees: 1% + miner's fee (sellers only)
    • Supported countries: USA & Canada
    • Payment methods: Cash, PayPal, Western Union & more
    Go to site
    Coinmama Bitcoin Marketplace
    Coinmama Bitcoin Marketplace
    Use USD/EUR to buy bitcoin and Ether with credit card or cash on the Coinmama cryptocurrency exchange.
    • Fees: 5.5% + 5% for credit card
    • Supported countries: 226 countries worldwide
    • Payment methods: Credit/debit card, cash
    Go to site
    VirWox Virtual Currency Exchange
    VirWox Virtual Currency Exchange
    Buy bitcoin through PayPal on one of the oldest virtual currency exchanges in the business.
    • Fees: Varies by transaction
    • Supported countries: Worldwide
    • Payment methods: PayPal, Skrill, paysafecard, uKash
    Go to site
    Bitbond P2P Bitcoin Lending
    Bitbond P2P Bitcoin Lending
    This global P2P bitcoin lending platform offers competitive interest rates for lenders and flexible financing for bitcoin borrowers.
    • Fees: Varies for lender/borrower
    • Supported countries: 50+ countries
    • Payment methods: Bitcoin, US dollars, euros, Kenyan shillings
    Go to site
    xCoins P2P Bitcoin Lending
    xCoins P2P Bitcoin Lending
    Buy bitcoin instantly with credit card, PayPal or bank account on this peer-to-peer lending platform.
    • Fees: Varies by transaction
    • Supported countries: 40+ countries
    • Payment methods: Credit card, PayPal, bank transfer
    Go to site
    Cryptex24 Exchange
    Cryptex24 Exchange
    Buy and sell crypto and other digital currencies on this global fixed-rate exchange.
    • Fees: Varies by transaction
    • Supported countries: Worldwide
    • Payment methods: Western Union, MoneyGram, Perfect Money & more
    Go to site

    What types of transfers can you carry out with bitcoin?

    Could bitcoin soon offer a safer and more effective way to transfer money around the world?

    The involvement of Commonwealth Bank and Westpac in the R3 project shows that the banks are aware that Bitcoin offers plenty of potential benefits for digital commerce. “The development of the blockchain will certainly have a very interesting and potentially disruptive impact on financial services,” Westpac chief executive Brian Hartzer said at the time.

    There are also hundreds of other open-source blockchain experiments underway around the world, as financial institutions search for ways to streamline and simplify payments infrastructure. With lower fees on overseas transfers, fast processing of transactions and the ability to cut out the middle man, Bitcoin represents an exciting opportunity for international money transfers.

    However, any transition to Bitcoin payments among banks and other established financial institutions is likely to be a slow one. Not only is much of the technology still in development, but regulators in Australia and around the world are still catching up with the many implications of digital currencies. As research such as the R3 project continues around the world, finding a way to transform the international money transfer market is going to take some time – but the interest shown by large global banks indicates the possibilities.

    In the meantime, the way we send money overseas will remain the same. While there is the option of sending a telegraphic transfer via your bank, specialist online money transfer companies still offer a cost-effective solution. It offers better exchange rates and charge minimal transaction fees compared to the banks, so it’s definitely worth considering when you need to send money abroad.
    Predicting bitcoin’s future value and exchange rates

    Rates last updated November 22nd, 2017
    Details Features
    Trezor Bitcoin Wallet
    Trezor Bitcoin Wallet
    Trezor hardware wallet is a secure way to keep your cryptocurrency safe from hackers and malware.
    • Features: OLED display, cross-platform support
    • Multi-currency support: BTC, DASH, LTC & more
    • Security: PIN, 2-factor authentication
    Go to site More info
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    2 Responses

    1. Default Gravatar
      gloryOctober 4, 2017

      I want to transfer money from south Africa to US using bitcoin so I want to know the starting point ?

      • Staff
        JudithOctober 4, 2017Staff

        Hi Glory,

        Thanks for contacting finder, a comparison website and general information service.

        You may send bitcoin worldwide through a wallet-to-wallet transfer. The recipient of the sent bitcoins would also need to have an active bitcoin wallet to be able to receive the sent bitcoin.

        I hope this helps.

        Regards,
        Judith

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