While most people struggle with the concept of converting fiat currency to Bitcoin, certain issues can arise when trying to convert BTC back to fiat. Depending on which exchange one uses, deposits and withdrawals in certain local currency might not be possible for whatever reason. A simpler and more convenient solution has to be found sooner or later.
The Struggle of Converting Bitcoin To Fiat
Converting Bitcoin into fiat currency through a Bitcoin exchange can be quite a challenge unless one deals in any of the three major currencies (USD, EUR, and CNY). Depending on the Bitcoin exchange itself, they might not always accept withdrawals denominated in a certain currency, even though making deposits with the same currency is not a problem.
This is one of the major problems the arises when being forced to rely on traditional financial tools such as bank accounts and debit cards. International transactions for returning funds to customers are subject to different legislative and regulatory requirements compared to receiving deposits.
In fact, this is one of the issues Bitcoin has been addressing since day one, as the popular digital currency does not discriminate based on location or local currency. Instead, one Bitcoin in the US works the same in Asia, Europe, or even Oceania. Regular financial services operate in a completely different way, and communication across continents requires multiple intermediary parties.
Unfortunately for everybody involved in the Bitcoin ecosystem, withdrawing funds from an exchange means either using a bank account or debit card. If the exchange of your choice does not accept billing details from your country, issues arise. Additionally, international wire transfers to get funds out can prove to be quite costly, depending on one’s location.
A possible option is selling Bitcoin through the LocalBitcoins platform, where sellers can set their own payment methods for receiving funds. The interesting part about LocalBitcoins is how the platform is tailored to accommodate local market trends, such as supporting local bank accounts, PayPal, or other popular payment options.
Relying On Fiat Services For Just About Anything
The main problem is how everyday consumers are forced to convert Bitcoin back to local fiat currency to pay bills and whatnot. In Europe, there is a service that lets you pay bills with Bitcoin for a small fee. The only downside to this service is how it’s not available to customers using local currencies other than EUR [right now].
This begs the question whether or not here is a growing demand for more Bitcoin-to-fiat conversion options, or if there is a big need for service that let us pay bills in BTC. Very few companies accept Bitcoin for bill payments, and intermediary solutions have to take local legislation and regulatory requirements into account.