The company completed an international trade payment operation between Paraguay and Argentina. The objective of the proposed service is to reduce costs and confirmation times using Bitcoin.
Besides its public and unchangeable blockchain, which improves transparency, Bitcoin can be used to make foreign trade payments. This feature is especially used by Bitex to improve foreign trade and promote frictionless payments.
Recently, Paraguayan traders used the company’s services to conduct a merchandise import transaction from Argentina. The company’s co-founder and CMO, Manuel Beaudroit, talked about the services that it offers and the way in which Bitex leverages Bitcoin.
Beaudroit noted that, while the company helps specify foreign trade payments with Bitcoin, customers do not receive the cryptocurrency directly: the service consists of a payment gateway from local currency to local currency.
He stated that Bitex offers the service of international payments from local currency to local currency, connecting local bank accounts on the Bitcoin blockchain. He also explained traders never touch Bitcoin directly, but they take advantage of the underlying technology to make international transfers, thus avoiding the SWIFT banking network and the banking correspondents’ network.
Beaudroit considers that this reduces customers’ sensitizing and training process regarding Bitcoin and its use. He said that for a bitcoiner it is a covered issue, but for a company that has been working with a bank, adding one more difficulty would increase friction.
However, he noted that there are business cases where Bitcoin is used directly. He said that masking Bitcoin would allow taking advantage of its positive attributes, reducing the times and the costs, and bringing more transparency regarding payments, without adding more difficulty to the company’s service and payment structure.
He said that the company has APIs to use its services so that companies can connect their payment management system with Bitex and always have traceability of their payments. He highlighted that it is one of the attributes that companies find attractive when choosing them.
Since the company has the relevant business permits, there are no problems associated with the regulation to use its services. In fact, Beaudroit stated that Paraguayan authorities are very careful with international transfers to avoid smuggling and other illegal activities.
Additionally, the company has complied with the legal against-money-laundering (AML) and know-your-client (KYC) requirements, so they are confident about those using its services. He said that the idea is to keep people from connecting Bitcoin with money laundering, when imposing the same controls as banks.
As he explained, Bitex “dramatically reduces the times that importers and exporters must wait for sending or receiving a payment. A transaction that could have lasted a month before, with this company’s services, only lasts an hour.
Although customers use Bitcoin for cross-border payments, Beaudroit said that they are not affected by this cryptocurrency’s volatility. The executive highlighted that the payments come from a “working capital” invested in Bitcoin from which the company liquidates certain positions to obtain the necessary local currency, which is achieved “quite quickly and without being exposed to volatility.”
Regarding the import made, the Bitex executive said that there were no major setbacks, since only fiat currencies were used. Although receiving payment is a small part of the process, it takes the exporter a long time. These processes, generally liquidated through banks, are more complex and have very long execution times, compared to that of Bitex’s proposal to reduce these payments to one hour.
By Willmen Blanco