Just before the last big trip I took, I opened up a bank account especially to hold my travel money. My standard account was used as a host for the bulk of my funds and my second account was used as the one I withdrew money from at the ATMs all over the world. I thought I was so smart, saving 0.5% on my international withdrawal fees with the second account compared to my standard one. I thought I was being extra safe by not having all my eggs in one basket. The next time I travel, I will do things differently however.
Banks have been getting away with charging us a percentage to withdraw our own money for years. So much so, that we just accept it as the norm but let’s think about that for a moment. We give a global bank our money and if we want them to give us some of it back and we are not in our home country, they are going to charge us a 3% commission, not because it costs them any more but just because they can. Then they have a buffer between the real exchange rate and their own exchange rate where they are making another few percent on each transaction. Travellers are being robbed blind by global banks.
Example: A bank claiming to be the worlds local bank charges 2.75% foreign withdrawal fee and their current exchange rate on euros is £1 = €1.03 when the live rate is actually €1.08. That works out as 7.55% fee in total on ATM withdrawals abroad.
It doesn’t have to be this way however and Bitcoin is the answer. Or at least it could be. The cryptocurrency has a tarnished reputation due to high-profile cases like Silk Road or Wikileaks but I have tried and tested the platform myself and found it to be a safe and fair system.
Whilst Bitcoin may have an image problem due to media splashes and high-profile cases, we should remember that it was the current banking system that caused the financial crash of 2008 and not the Bitcoin system. In fact, the Bitcoin system is argued to be much less corrupt than the current banking system operated by global banks and governments. The Netflix documentary ‘Banking On Bitcoin’ can explain more and is a fascinating look at the history and current circumstances of Bitcoin.
By using Bitcoin as a means to transport your own money abroad, you avoid giving your bank somewhere between 5-9% your travel fund in commissions. That would pay for a heck of a lot of fun things to do but even more than that, using Bitcoin for a good, legal and credible reason supports a fairer finance system.
As a traveller or backpacker you are likely to travel through first, second and third world countries and you will see the huge differences in living standards between them. Most of the people who you see and meet in third world countries won’t have a bank account. It is the basic denial of access to the financial system that perpetuates the poverty of these countries and regions. So ask yourself as a traveller, would you rather maintain the current unfair banking system and potentially perpetuate third world poverty? Or would you consider supporting a safe and free system like Bitcoin that can be used by anyone, regardless of credit status or location?
At the moment, this is still a partially theoretical idea, as the Bitcoin exchanges are not readily available to make this happen in a widespread way but it looks like the way forward for travel money and indeed, ethical travel.
(f you are knowledgeable or have any ideas you can contribute to this post that would help people travel whilst using Bitcoin, please add your comments to the post below. I am happy to admit I am a novice on this topic and more guidance would be great. Thanks.)