Fiat on-ramps & banking partners vital for institutional web3 adoption, say experts at European blockchain convention

Experts cite the gap between emerging and existing financial technologies as a pain point for crypto firms accessing banking and payment rails

By Shashank Bhardwaj

Published: Nov 10, 2023 11:36:06 AM IST

Updated: Nov 10, 2023 11:39:51 AM IST

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At the European blockchain convention held in October 2023, the CEO of penPayd, Iana Dimitrova, the co-founder and CEO of Ramp Network, Szymon Sypniewicz, and the MD of Damex, Samuel Rondot, discussed the importance of fiat on-ramps and banking partners for institutional web3 adoption.

OpenPayd CEO Iana Dimitrova explained, “There is a growing level of mistrust on behalf of both regulators as well as traditional holders of access to payment rails, whether that’s the SEPA network or the SWIFT network, banks or systems that manage the payment rails insofar as the crypto world is concerned.”

Dimitrova thinks that fiat on-ramps and payment rails could bridge the gap of mistrust between regulators and traditional holders of access to payment rails. “If we can address the concerns around identity and traceability, ergo money laundering on the traditional side of things, I believe we can bridge that gap now,” she said.

Samuel Rondot, the managing director of Damex, said that their clients deal with reputational issues with the bank accounts as they want to interact with the crypto ecosystem.

Pondering why banks remain “allergic to crypto,” he suggested that the problem stems from misunderstanding the tool and its principle. As a result, specialised services, such as OpenPayd and Ramp, have emerged to fill the gap.

These services facilitate Anti-Money Laundering and Know-your-customer processes, acting as a third party to “shield” traditional banks from directly dealing with crypto-related businesses. He added, “Let’s say you do a crypto-to-fiat payment with an OpenPayd IBAN. You then move this money toward your main bank account. It’s a completely different process, and the bank will not have a problem with that.”

The Damex executive highlighted these services’ importance in facilitating fiat flow between traditional finance and decentralised finance ecosystems.

Szymon Sypniewicz, the co-founder and CEO of Ramp Network, explained how Ramp’s infrastructure allows crypto-related businesses to offer credit cards, debit cards, local payment methods and bank transfer functionality for users to acquire crypto or pay for services.

“The aim is to make the transition to crypto-enabled products so smooth and seamless that people would stop noticing that they are now interacting with an entirely new tech setup,” he said.

When asked about crypto-native businesses’ difficulty opening bank accounts or accessing payment rails, all three experts highlighted the gap between emerging and existing financial technologies as a pain point.

Despite the challenges involved, the experts at the convention were optimistic about the future of crypto and Web3. They believed the European Union’s Markets in Crypto-Assets (MiCA) legislation would provide a common framework for Web3 and TradFi players to operate more efficiently. Fiat on-ramps and banking partners will also make crypto more accessible to institutions and mainstream users.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash