When people think of exchanges to sell their Bitcoin, there are a lot of caveats to take into account. First of all, it can take a while to execute these payments, albeit most services do so within 24 hours. On the other hand, international wire transfers remain very expensive. Bitcoin can’t solve that problem when users want a bank transfer in fiat.
Converting Bitcoin To Fiat Can Be Expensive
Receiving fiat currency from a Bitcoin exchange can be a fun yet tedious process. Seeing funds appear in one’s bank account is always a positive feeling, even though financial services should not be trusted further than people can throw them. Unfortunately, it is the receiving part that is also the problem.
One Reddit user pointed out how a transfer from ItBit cost him US$35 in fees. That is not entirely surprising, as the company usually sends a Wire transfer through the Swift network, International transfers of value have always been expensive, and they still are today. Even though the exchange platform may offer a USD trading pair, that doesn’t mean they have a US bank account to process withdrawals.
At the same time, there is the fact that ItBit allegedly holds US Dollar funds in regulated US banks. If this is the case, they could – in theory – quickly send a domestic wire for their US customers. Keeping funds in a US institution does not necessarily mean it is used for anything other than depositing customer balances.
This is not an issue related to just ItBit, mind you. All of the Bitcoin exchanges around the world are dealing with these problems, as they need to rely on the banking system to process deposits and withdrawals Centralized services, such as exchanges, should never be considered an option in this decentralized world of Bitcoin and cryptocurrency.
Receiving an international bank transfer will always be expensive, regardless of which service or company is being used. This is why it is pertinent to find platforms that operate and are registered in one’s own jurisdiction. Moreover, just asking them whether or not they can offer domestic withdrawals is an option worth exploring as well.
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