The use of crypto accounts in business is a major step forward for cryptocurrency, helping move it into the mainstream for many firms as a means of making transactions instead of just investing in assets that can be bought or sold like gilts or bonds.
However, there would be great limits to this if crypto was in no way able to emulate what can be done using fiat currency in making international payments. If a company can only make and receive international payments using fiat currency, then cryptocurrency remains at a disadvantage.
The good news is that this is no longer the case. You can now make and receive payments around the world using systems like SEPA and SWIFT, using international banking (IBANK) accounts.
SEPA And SWIFT Explained
SEPA stands for Single Euro Payments Area. This is the system used in the European Union and some other European countries to make rapid digital payments. This covers the 27 EU countries and 11 other European nations, including the UK, Switzerland, Norway, Iceland and some micro states like Monaco and the Vatican.
The system was established in 2008 for credit transfers, with direct debits being added to the system in 2009. The whole Eurozone was integrated into the system by 2014 and the other countries two years later.
SWIFT, which is short for Society for Worldwide Interbank Financial Telecommunications, is an older organisation, dating back to the 1970s. It is used by over 200 countries and territories, although in recent years some countries – notably Russia – have been excluded as a form of financial sanction.
Your company would use SWIFT for transactions involving customers or business partners outside the SEPA system.
These two systems were established for fiat money payments, both originating before crypto was a thing. However, new methods have now been devised to make it possible to use these systems for crypto payments as well.
The Importance Of The Volta IBAN
An XRPaynet customer will use a Volta IBAN for this. An IBAN is an international banking number and you will find these on every standard fiat bank account.
Consisting of a sequence of letters and numbers, every IBAN is unique and for an international transaction, you would quote it alongside your account number, with the receiving bank checking they match up.
The system was devised in 1997 and first used in Europe, but subsequently, its use spread to most other parts of the world. Although not officially adopted in North American countries, it is recognised there.
Until very recently, this was only for fiat currencies, but the introduction of the Volta IBAN means that you can now make and receive international payments and transfers in cryptocurrency using the Volta IBAN system, which enables you to access Swift and SEPA.
The Extra Benefits Of Flexibility
As we have previously highlighted, the Volta IBAN system comes with a few extra features that add a new element to trading and making transactions using crypto instead of fiat currency.
For example, you can deposit Euros into the IBAN account, use them to buy cryptocurrencies and then off-ramp this back into the account, before then transferring it anywhere you want.
This means you have an exceptional level of flexibility and agility in your financial dealings, with seamless switching between not just different fiat currencies, but also different cryptocurrencies.
That can be exceptionally useful when travelling across multiple different boundaries and currency areas in a short time, but also when trading across these boundaries as well, meaning you can benefit from this system whether it is for personal use or your business.
Increased Crypto Credibility
Up until now, crypto transactions in the ‘real world’ have been constrained by several factors. Some of these have been due to the limited capacity of vendors to receive payments and the lack of means to make them. That has tied in with the natural suspicion some may have had of anything so new and novel as cryptocurrency.
The second of these factors has been all about credibility and while that may have been aided somewhat by recent steps such as the United States government setting out a path of being a crypto friendly country with a strategic Bitcoin reserve, much of the difference is being made by innovations like the integration of crypto into international payment systems.
None of this means you will switch all your operations to crypto transactions, either in the near future or even the long term.
However, it does allow you to take advantage of the possibilities cryptocurrency now offers to make international transfers and transactions, ensuring that whatever possibilities and advantages emerge in the years ahead, you will be well-placed to take advantage of them.