Bitcoin startups Volabit and SatoshiTango have opened a money transfer service between their respective countries through a collaboration called Coinnect.
Volabit framed the offering as a bitcoin-powered international money bridge for remittances and global commerce that will minimize the bitcoin learning curve.
Bitcoin is hidden from the Coinnect user experience. Those wanting to send money via Coinnect need only deal in their local currencies without worrying about bitcoin’s price volatility.
Volabit co-founder Tomas Alvarez told CoinDesk:
“We believe that bitcoin has huge untapped potential to change international money-sending beyond traditional remittances. Due to the inertia of old habits and trust lacking in new technologies, however, bitcoin services have failed to meaningfully compete against existing services thus far.”
SatoshiTango CEO Matias Bari said that’s because most of bitcoin’s existing use cases impose a large responsibility on the users to understand the technology of the digital currency. Many bitcoin services are marketed to bitcoin’s earliest adopters, leaving the general consumer population overwhelmed by them.
By creating a network of bitcoin businesses that allow fiat-based international transactions, he hopes to foster mainstream adoption.
“No one knows how the TCP/IP protocol works, but we all buy things on eBay,” he said. “My vision is that we'll have to build layer after layer on top of the bitcoin protocol.”
Tapping the service
When a user in Buenos Aires sends $1,000 Argentine pesos, a Coinnect user in Mexico City receives $1,100 Mexican pesos. SatoshiTango and Volabit settle the amount between them in bitcoin.
Users on both sides of the transaction must have a verified account with either company. They need only log in and set up a transfer.
“They don't need to know anything about bitcoin. We took bitcoin out of the equation and moved it to the back end. So consumers are just paying in Argentine pesos, executing the transaction and someone is receiving Mexican pesos on the other side of the world.”
Customers can fund their accounts through the payments gateways associated with each exchange. In Argentina, for example, PagoFacil has more than 3,000 locations by which users can make cash deposits into their SatoshiTango accounts.
Bari said it is in talks with its bank to allow customers to be able to fund their accounts through wire transfer.
After funding their accounts, users can send money to any country with a Coinnect partner, each of which will have its own funding method.
As the system is still in testing, SatoshiTango and Volabit are the only partners for the time being.
Feature image via Shutterstock