The digital asset economy continues to gain momentum globally, despite recent scandals and crashes. This is fueling the demand for using crypto as a means of payment in the real world. Large companies such as Meta (Facebook) and Amazon have responded by starting to build the infrastructure needed to handle crypto payments.
Another driving force is the “24/7” nature of online markets, which is also contributing to the influx of DeFi companies offering crypto-to-fiat gateways. The goal is to enable crypto investors around the world to make their digital assets viable in their daily lives.
Relying on the blockchain, they can conduct crypto transactions even on weekends and holidays when banks are traditionally closed, and offer lower transaction costs for businesses and consumers due to the lack of intermediaries in the process.
The movement of monetary value between what are essentially two financial systems with different rules is a transaction fraught with friction. As crypto exchanges have grown, improved, and become more user-friendly, the rise in power is now relatively smooth, providing opportunities to earn crypto for work, accept crypto payments, and through the through reward programs like airdrops.
For online businesses that accept cryptocurrencies as a form of payment, the launch process is relatively easy to manage. Dropping out can be more difficult, as there are parts of the world where cryptocurrencies are neither recognized nor accepted, which means using crypto in the real world can be time consuming and difficult. to navigate.
Cashing in on crypto remains a challenge, as centralized exchanges leave it up to their users to find an exchange that allows switching to their currency of choice. Another limitation is that these exchanges sometimes take days to complete the transaction and impose limits on withdrawals.
This is relevant because as long as scaling remains an issue, mass adoption of cryptocurrencies will face obstacles. Indeed, for many, simply holding onto crypto savings is not a viable option. What we need more than ever is a mechanism that allows users to easily get on and off the “crypto highway”.
Companies working to make the exit ramp smoother
A company tackling problems head-on with its promise to offer “a secure, efficient and unique ecosystem in the world of decentralized finance, allowing you to send the 1:1 value of your blockchain holdings in fiat format anywhere in the the world!” is SafeGram Inc..
SafeGram Send Money Services (SSMS) allows users to send crypto to fiat from anywhere in the world through their DApp. Fulfilled via a simple request to their C2F bridge, cryptocurrencies are quickly converted to fiat and securely transferred across the globe.
Another is Fiat24a Swiss fintech that works closely with national financial regulators to offer a crypto-fiat gateway in a decentralized application that bridges the gap between centralized and decentralized ecosystems.
They built the platform on Ethereum’s Layer 2 arbitrage due to its low transaction costs and efficiency. However, they decided to deploy the platform on other blockchains such as Ethereum, BSC, and Avalanche to encompass various ecosystems.
Fiat24 relies on smart contracts to execute transactions, minimizing human intervention and enabling instant payments on the blockchain. Allow customers 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 practical
The global financial system we currently rely on has its failures and shortcomings, many of which are beginning to be addressed and redesigned with the advent of blockchain technology. The latter can effectively address issues of efficiency, reliability, cost-effectiveness, and transparency, with traditional blockchains providing the kind of interoperability and scalability that is lacking in banking.
As technology propels us towards a future where financial services are made more accessible around the world, the importance of crypto-fiat solutions cannot be underestimated.
Somewhere between these two radically different financial ecosystems, those investing in facilitating user access to decentralized finance are the players to watch.