Traditional Payment Platforms and Neobanks: Driving the Mainstream Adoption of Crypto
Summary:
Key industry executives highlight the growing need for traditional payment systems and neobanks in propelling mainstream acceptance of cryptocurrency. Leaders from OpenPayd, Ramp Network, and Damex spoke about the sector's increasing trust issues and the potential bridges created by fiat on-ramps and payment platforms. They also touched on the complexities crypto-native businesses face when trying to access traditional banking services, alongside stressing the role of compliance standards for wider crypto acceptance.
Leaders in the intersection of traditional finance and Web3 have stated that conventional payment methods and neobanks are becoming essential in driving the general acceptance and adoption of cryptocurrency. In a conversation with Cointelegraph at the recent European Blockchain Convention, executives from OpenPayd, Ramp Network, and Damex discussed the growing significance of third-party payment platforms and banking systems. OpenPayd CEO, Iana Dimitrova, explained that her company processes over €3 billion in transactions each month and has over 2 million accounts, including many well-known cryptocurrency exchanges, such as Crypto.com.
OpenPayd's primary service is providing banking and payment infrastructure for many industries, including the crypto market. Dimitrova noted that there is rising mistrust from regulators and traditional handlers of payment methods, such as SEPA or SWIFT, towards the crypto world. She added that fiat on-ramps and payment platforms could alleviate concerns about identification and traceability, addressing the prevailing perception of money laundering held by conventional financial institutions and regulators.
Damex's Managing Director, Samuel Rondot, discussed how his Gibraltar-based company specialises in offering fiat on and off-ramps for clients classified as "higher risk", such as iGaming, Forex, family businesses, and hedge funds. Typically, Damex converts large sums of cryptocurrency to fiat and vice versa in euros, pounds, and U.S. dollars. Because these clients want to engage with the crypto ecosystem, they frequently face reputational challenges with their bank accounts.
Companies like OpenPayd and Ramp have emerged to fulfil the role of specialists who understand and handle AML and KYC processes. They act as a third party, preventing traditional banks from directly dealing with businesses related to cryptocurrency. Rondot emphasised the importance of these services in conducting requisite due diligence and facilitating fiat's movement between traditional finance and DeFi systems.
The founder of Ramp Network, Szymon Sypniewicz, detailed how their services offer a single API platform to the global fiat system. Ramp's infrastructure enables crypto-related companies to provide users with various payment methods, including credit and debit card transactions, local payments, and bank transfers.
When asked about the difficulty faced by crypto-native businesses in opening bank accounts or accessing payment platforms, all three stressed the gap between emerging financial technologies and existing ones. They agreed that there's a significant need for infrastructure providers who can collect varied payment methods, banks, and channels. Sypniewicz adds that the struggle faced by crypto firms in obtaining banking services comes down to their specialisation. Servers such as Ramp function as "regulatory tech specialists," combining multiple global bank and payment providers.
Compliance standards are another key factor for wider acceptance and adoption of cryptocurrency businesses. The trio concurred that the European Union's Markets in Crypto-Assets (MiCA) framework can offer an inclusive structure for Web3 and traditional finance players to operate more efficiently.
Published At
11/7/2023 8:41:12 AM
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