Jens Krämer

Moving Money across Borders? Consider Bitcoin!

 |  bitcoin, banking

If you still do international money transfers with traditional banks, it might be about time to reconsider your options.

Living in the Philippines and running a business in Germany I quite often find myself in a situation where I have to transfer money from a german bank account to an account here in the Philippines. For more than a year I did international wire transfers, which work, but are complicated (care to fill in the address of the receiving bank branch?), cost an arm and a leg in fees and take at least a week to complete.

On one occasion, three days after initiating such transfer with my german bank, I got an email from them (unsigned and clear text of course…), which basically was a forwarded email (or at least some kind of electronic message from some proprietary system) from a bank in Singapore, asking for the birthday and other personal data of the account owner of the receiving bank account in the Philippines. Knowing that my money was ‘hanging in the air’ somewhere along the way from Germany to the Philippines I complied and replied to their questions, and a few days after that the money arrived at it’s destination as usual. However this event made me think:

  • It’s questionable wether a bank that is neither the sender nor the final recipient of the money but apparently just an intermediary has the right to ask for more personal details of the recipient than they most probably already have.
  • What happens if they don’t like my answers or I simply don’t manage to reply in time?
  • Last but not least: WTF? Clear text email, not even signed?

To sum it up, I couldn’t care less about anti money laundering measures and ‘know your customer’ policies. I want to send my money fast and cheap from A to B, and especially I don’t want C to ask stupid questions.

Enter Bitcoin

I played around with Bitcoin before but never found an actual use for it. Until now. During the last few months I regularly used Bitcoin for all my international money transfer needs. The result?

It takes a fraction of the time, at a fraction of the cost.

Due to exchange rate fluctiations it’s not that easy to actually measure or even predict the exact cost for transferring EUR or USD to PHP on a filipino bank account, but for me it has always been less than the fees my german bank would have charged. That’s for amounts of 1000 to 4000 EUR per transfer, the numbers might look different for larger / smaller amounts / other banks. I really want to hear from you if your bank does international wire transfers cheaper than an equivalent transfer using BTC.

But Bitcoin is so Volatile!

The important thing if you don’t intend to actually invest in BTC but merely want to use it as a vehicle for value transfer is to keep the timespan during which your money is represented in BTC as short as possible. Transferring BTC is not totally instant, but in my experience it never takes more than half an hour to get the necessary number of confirmations for a transaction. After that you can sell the BTC again and return to the ‘safe’ haven of the FIAT currency of your choice.

How to Transfer ‘Real’ Money from One Country to Another Using Bitcoin

First of all, find a way to exchange bitcoins and real money at the source and destination of your money. I use Bitstamp in the EU, and in the Philippines.

Key is that you are able to do fast and cheap (non-international) money transfers to and from these exchanges. Bitstamp sits in the UK and has bank accounts there and in Euro-Land, so for me it takes one bank day to top up my Bitstamp account. is even faster - transferring money from there to any Philippine bank account is just a matter of hours, and you’ll be notified by SMS once completed. In addition to that you can pay your utility bills and top up your prepaid SIM card directly from your BTC wallet. All in all offers an outstanding experience nicely tailored to the local market. If you are dealing with Bitcoin in the Philippines you really should give them a try.

It is worth noting that Bitstamp does not allow deposits / withdrawals from or to other bank accounts than your own. on the other hand happily pays out to third party bank accounts, so you can use your wallet like a normal online banking account. In fact if they offered a credit card they could competely replace my local bank account.

Here’s what I do in sequence:

  • send money from german bank account to Bitstamp (1 day)
  • buy BTC at Bitstamp (instantly, 0.25% commission)
  • send BTC to wallet (10-20 minutes, tiny network fee)
  • transfer PHP to Philippine bank account (less than 1 day, small commission at

As you can see, after at most two days it’s all done. To give you an idea of the cost, a the time of this writing the difference between the bitstamp BTC/USD ratio and the sell rate is 0.5 USD per BTC, so for sending e.g. 7 BTC all in all that’s around EUR 10 in fees. The same transfer with my bank cost nearly EUR 30 and takes more than twice as long.

Why Didn’t I Choose a German Bitcoin Exchange?

I simply couldn’t find one that did not require personal identification via PostIdent, which requires a registered address in Germany, and personal presence to prove your identity and address at a german post office. Bitstamp were happy with a photography of my passport’s ID page and a scan of a tax return statement addressed to me at a german address.

Want More Privacy?

To be honest I was a bit disappointed that apparently there are no more BTC exchanges around the world which accept wire transfers from regular banks but do not require a personal identification in terms of passport copies and address verification of some sort at the same time. Not a big issue for me, since the advantages are still there and outweigh this small inconvenience. After all, getting an account at any BTC exchange is still much easier than opening up a bank account.

If privacy is a big concern for you and you are willing to trade convenience for it, you might want to use a platform like LocalBitcoins to exchange BTC and FIAT money. There you get person-to-person exchange, no traditional banks involved at all, and no need to send a scan of your passport or utility bill anywhere. And you’ll possibly get to know like-minded people this way. Obviously this requires a bit of caution and trust and might be difficult to do on the far end of your money transfer path.

What about Western Union?

Western Union (and similar, lesser known services) is hard to beat when it comes to delivering money to remote places and/or ‘unbanked’ people. And they are fast - I did not use them often, but usually money sent from a german credit card through the WU web interface could be picked up in the Philippines on the same day, often after a few hours. This convenience however comes at a steep price. In my experience WU is by far the most expensive way to send money, so if there is any other way, think twice.

Disclaimer: I earn the enormous amount of 0.002 BTC if you sign up to through one of the links above ;)