How to cash out — The rise of crypto-to-fiat
The digital asset economy continues to gain momentum globally, despite the scandals and crashes of late. It is fueling the demand for using crypto as a means of payment in the real world. Major corporations such as Meta (Facebook) and Amazon have responded by starting to build the infrastructure necessary to handle crypto payments.
Another driving force is the “24/7” nature of online markets, which also contributes to the influx of DeFi companies offering crypto to fiat gateways. The goal is to enable crypto investors worldwide to make their digital assets viable in their daily lives.
Relying on the blockchain, they can perform crypto transactions even on weekends and holidays, when banks are traditionally closed, and provide lower transaction costs for businesses and consumers due to the lack of intermediaries in the process.
Off-ramping challenges
The movement of monetary value between what is essentially two financial systems with different rules is a transaction that is met with friction. As crypto exchanges have developed, improved, and become more user-friendly, on-ramping is now relatively frictionless, offering opportunities to earn crypto for work, accept crypto payments, and through reward schemes like airdrops.
For online businesses that accept cryptocurrencies as a form of payment, the on-ramp process is a relatively easy one to handle. Off-ramping can prove to be more challenging, as there are parts of the world where cryptocurrencies are either not recognized or accepted, meaning that putting crypto to use in the real world can be time-consuming and tricky to navigate.
Cashing out of crypto remains a struggle, as centralized exchanges leave their users with the task of finding an exchange that allows off-ramping to the currency of their choice. Another limitation is that those exchanges sometimes take days to complete the transaction and impose limits on withdrawals.
This is pertinent because as long as off-ramping remains a problem, the mass adoption of cryptocurrencies will face roadblocks. This is because, for many, simply holding onto crypto savings is not a viable option. What is needed now more than ever is a mechanism allowing users to easily get on and off the “crypto highway” conveniently.
The companies striving to make off-ramping more frictionless
One company tackling the issues head-on with their promise of offering “a secure, efficient, and only ecosystem in the world of decentralized finance, enabling you to send 1:1 value of your blockchain holdings in fiat format to anywhere in the world!” is SafeGram Inc.
SafeGram Send Money Services (SSMS) lets people send crypto to fiat from anywhere in the world via their DApp. Achieved through a simple request to their C2F Bridge, cryptocurrencies are swiftly converted into fiat and transferred securely across the globe.
Another is Fiat24, a Swiss fintech that works closely with the national financial regulators to offer a crypto-to-fiat gateway in a decentralized app that bridges the gap between centralized and decentralized ecosystems.
They have built the platform on Ethereum’s layer 2 Arbitrum due to its low transactional costs and efficiency. However, they have set to deploy the platform on other blockchains such as Ethereum, BSC, and Avalanche to embrace various eco-systems.
Fiat24 relies on smart contracts to execute transactions, minimizing human intervention and enabling instantaneous payments on the blockchain. Allowing clients to top up their account with their digital wallet, connected to Fiat24 with their native NFT, to then transfer funds to their bank.
DeFi made convenient
The global financial system we currently rely on has its failures and shortcomings, many of which are beginning to be resolved and reimagined with the advent of blockchain technology. The latter can effectively solve issues surrounding efficiency, reliability, profitability, and transparency, with mainstream blockchains offering the kind of interoperability and scalability lacking in the banking industry.
As tech propels us towards a future where financial services are made more accessible around the globe, the importance of crypto-to-fiat solutions cannot be underestimated.
Somewhere between these two drastically different financial ecosystems, those investing in making it convenient for users to access decentralized finance are the players to watch.
