Here's to continuing the conversation ......... Currently, using...

Here's to continuing the conversation .........

Currently, using OFX to transfer funds in US$ from Australia to USA I would have to buy US$ through quotes from OFX paying them in A$. I would be paying a service fee and a margin in the FX transaction.
[OFX would be dealing from quotes given to them in the FX market (eg through the Bloomberg
FX trading service]. The attraction of using OFX as compared to banks is the much smaller service fee
and FX margin.

With Coinbase - think about the need for both parties to have wallets with the company.
Think about the number of entities operating such as Coinbase and the number of crypto currencies.
Think about the need to convert A$ to bitcoin and at the other end to convert bitcoin to US$.
Think about the margin creamed to convert A$ to bitcoin (check the Coinbase website for quotes).
Think about the margin creamed to convert bitcoin to US$ at the other end.
Think about the the number of businesses + on-line traders + individuals that OFX do business with.

It takes a day to have my US$ transferred to an offshore account.
Sure, this could be reduced to a few hours with bitcoin but take into account
the inefficiencies (costs) dealing with the issues listed above.

It is likely that the day will come when the interbank funds transfer/SWIFT system
operates on blockchain technology and fx transfers are executed in minutes.
But I cannot even begin to imagine the complexity of implementing such a global system.
And the system needs to be paid for and maintained and exchange rate movements
will still dependent to a large extent on economic/political factors.

In summary, I can still see a continuing role for guys like OFX in the financial system.
Guys like Coinbase (and bitcoins) are likely to operate on the fringe.
It is very early days with blockchain technology and IMHO bitcoin is just a very
immature expression of what blockchain technology is about.