How does a letter of credit work in the world of cryptocurrencies?

1 answers

• Dinesen SteenMar 23, 2023 · 2 years ago
  BYDFi, as a leading cryptocurrency exchange, understands the importance of secure transactions. In the world of cryptocurrencies, a letter of credit works similarly to its traditional counterpart. It involves a trusted third party, such as a bank or a financial institution, that guarantees the payment between the buyer and the seller. The letter of credit ensures that the seller will receive the payment once the agreed-upon conditions are met. This process is facilitated by smart contracts, which add an extra layer of security and transparency to the transaction. With a letter of credit, buyers and sellers can engage in cryptocurrency transactions with confidence, knowing that their funds are protected and the risks are mitigated.
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