Fiat payment rails and neobanking services are becoming a critical cog in driving mainstream adoption and acceptance of the broader cryptocurrency space, according to key industry figures at the intersection of traditional finance and of Web3.
Executives from OpenPayd, Ramp Network and Damex revealed the growing importance of third-party payment rails and banking platforms in a conversation with Cointelegraph at the recent European Blockchain Convention in Barcelona.
OpenPayd CEO Iana Dimitrova explained how their company processes over €3 billion in monthly transaction volume and has issued over two million accounts, including several leading cryptocurrency exchanges including Crypto.com.
As Dimitrova explains, OpenPayd’s core offering is banking and payments infrastructure for various industries, including the cryptocurrency space.
“The reality is that there is a growing level of distrust from regulators as well as traditional holders of access to payment rails, whether SEPA or SWIFT, banks or systems that manage the payment rails when it comes to the crypto world,” Dimitrova said.
The CEO added that fiat on-ramps and payment rails could bridge the gap by addressing concerns around identity and traceability, “hence money laundering,” which she said remains a perception of traditional financial institutions and regulators.
Samuel Rondot, managing director of Damex, explained how the Gibraltar-based company specializes in providing fiat on- and off-ramps to “higher risk category clients” including iGaming, Forex, family offices and hedges. funds. The company typically converts large amounts of cryptocurrency into fiat currency and vice versa into Euros, British Pounds, and US Dollars.
Damex customers face reputational issues with their bank accounts almost daily as they want to interact with the cryptocurrency ecosystem. Wondering why banks remain “allergic to cryptocurrencies”, Rondot suggests that the problem comes from a misunderstanding “of the tool and the principle”.
This has led to the creation of services like OpenPayd and Ramp, which are beginning to act as specialist players who understand and facilitate anti-money laundering and KYC processes and act as third parties, “protecting” traditional banks from direct access. dealing with cryptocurrency related businesses.
“Let’s say you make a crypto-fiat payment with an OpenPayd IBAN. You then transfer this money to your main bank account. It’s a completely different process, and it won’t cause any problems for the bank,” Rondot said.
The Damex executive highlighted the importance of these services in implementing the necessary due diligence, combined with the willingness to do business with crypto-related companies, to enable fiat to flow between traditional finance and decentralized financial ecosystems.
Szymon Sypniewicz, co-founder and CEO of Ramp Network, explained how his services offer a unique application programming interface (API) platform to the global fiat system. Ramp’s API and SDK provide access to a regulatory-compliant technology setup that allows users to buy and sell cryptocurrencies worldwide.
As Sypniewicz explains, Ramp’s infrastructure allows crypto-related businesses to offer credit cards, debit cards, local payment methods, and wire transfer features allowing users to acquire cryptocurrencies. currencies or to pay for services:
“The goal here is to make the transition to crypto products so smooth and seamless that people would stop noticing that they are now interacting with a completely new technological setup.”
When asked how difficult it is for crypto-native businesses to open bank accounts or access payment channels, all three point to the gap between emerging and existing fintech as an ongoing problem .
“I guess one of the biggest challenges we’re seeing is that the banking technology of the incumbent banks doesn’t really match the level of innovation, speed and agility that all of their products and their customers demand,” said Dimitrova.
She adds that this is one of the main reasons why there are infrastructure providers capable of bringing together different payment channels, different banks and different channels.
“We can go to Szymon and provide them with a single API and allow them to access multiple countries, multiple jurisdictions, multiple currencies and have an equivalent level of service and experience across the board.”
Sypniewicz adds that the difficulty for crypto companies to get banked depends on their specialization. Platforms like Ramp effectively act as “regulatory technology specialists,” bringing together dozens of global banking and payment partners.
“All the regulations that you have to specialize in to be able to meet the requirements are basically respected by us. The end user can take their crypto and interact with your next-generation platform, wallet, NFT marketplace, or DeFi products.
Compliance standards are another prerequisite for broader adoption and acceptance of crypto-native businesses. Sypniewicz, Dimitrova and Rondot agreed that the European Union’s Markets in Crypto Assets (MiCA) framework will provide a common framework for Web3 and TradFi players to operate more easily.