How To Withdraw — The Rise Of Crypto-to-Fiat

The digital asset economy continues to gain momentum globally, despite the recent scandals and crashes. It increases 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 necessary infrastructure to handle crypto payments.

Another driver 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 worldwide to make their digital assets viable in their daily lives.

By relying on the blockchain, they can carry out crypto transactions even on weekends and holidays, when banks are traditionally closed, providing lower transaction costs for businesses and consumers due to the lack of intermediaries in the process.

Challenging challenges

The movement of monetary value between what are essentially two financial systems with different rules is a transaction that is met with friction. As crypto exchanges have evolved, 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 such as airdrops.

For online businesses that accept cryptocurrencies as a form of payment, the on-ramp process is relatively easy to handle. Off-ramping can prove more challenging, as there are parts of the world where cryptocurrencies are either not recognized or accepted, meaning that using crypto in the real world can be time-consuming and difficult to navigate.

Cashing out crypto is still a struggle, as centralized exchanges leave users with the task of finding an exchange that allows de-ramping to the currency of their choice. Another limitation is that these exchanges sometimes take days to complete the transaction and impose restrictions on withdrawals.

This is relevant because as long as churn remains a problem, mass adoption of cryptocurrencies will face roadblocks. This is because for many, simply holding on to crypto savings is not a viable option. What is needed now more than ever is a mechanism that allows users to easily get on and off the “cryptohighway” in a convenient way.

The companies strive to make exiting more frictionless

One company tackling the issues with the promise of providing “a secure, efficient and the only ecosystem in the world of decentralized finance that allows you to send the 1:1 value of your blockchain holdings in fiat format to anywhere in the world!” is SafeGram Inc.

SafeGram Send Money Services (SSMS) allows people to send crypto to fiat from anywhere in the world via their DApp. Accessed through a simple request to their C2F Bridge, cryptocurrencies are quickly converted to fiat and transferred securely across the globe.

Another is Fiat 24a Swiss fintech working closely with the national financial regulators to offer a crypto-to-fiat gateway in a decentralized app that bridges centralized and decentralized ecosystems.

They have built the platform on Ethereum’s layer 2 Arbitrum due to its low transaction costs and efficiency. However, they have set to deploy the platform on other blockchains such as Ethereum, BSC and Avalanche to embrace different ecosystems.

Fiat24 relies on smart contracts to execute transactions, minimize human intervention and enable instant payments on the blockchain. Allows customers to top up their account with their digital wallet, connected to Fiat24 with their native NFT, then transfer money to their bank.

DeFi made practical

The global financial system we currently depend on has its flaws and shortcomings, many of which are beginning to be resolved and redesigned with the use of blockchain technology. The latter can effectively address issues around efficiency, reliability, profitability and transparency, with mainstream blockchains offering the kind of interoperability and scalability lacking in the banking industry.

As technology propels us towards a future where financial services are made more accessible worldwide, the importance of crypto-to-fiat solutions cannot be understated.

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.