Banxa, an established cryptocurrency payment service provider, recently announced it had integrated its crypto-to-fiat gateway with Bancor, a liquidity protocol enabling automated cross-chain swaps and liquidity provision to various digital tokens.
But what does that mean for you, the blockchain industry, and consumers in general?
Let's look at the integration itself. By bringing Banxa's gateway Bancor, the latter's users can purchase cryptocurrency with fiat currencies directly via the Bancor network.
That's significant because as institutions enter the industry and crypto begins to mesh with the broader world of finance, the need for liquidity in crypto investment and trading becomes more urgent. And it is crucial for consumers too. It shouldn't take an hour and a Ph.D. to set up a wallet, buy crypto, trade it, and convert it back into fiat. By bringing these two established solutions together, the result means crypto investments are more seamless than before.
"The challenge with purchasing cryptocurrency has largely been the same problem with the industry overall - a lack of mature, stable, and transparent infrastructure in the industry," Liam Bussell, Corporate Communications at BANXA, told me. "This lack of transparency and confusion has made the high barrier of entry to digital assets for newbies even higher."
And it isn't just creating a wallet, filling it with crypto, and getting it back out again that is hampering the process.
"Regulation is taking shape around the world, and players who proactively pursue registration and compliance will be the leading companies in this space going forward," Bussell said. "Price is one key driver for mass adoption - you can see that at the height of this year's bull market. Each week, hundreds of thousands of new wallets came online. People are interested, but many find it too hard to understand wallets, exchanges, KYC, and why some exchanges work in some countries but not in others. It needs to be easier for people to benefit from crypto and decentralized finance."
The integration of Banxa's crypto-to-fiat bridge gives Bancor customers the ability to purchase digital assets through the Bancor Network interface with fiat currencies without first converting their fiat into dollar-backed stablecoins, Bitcoin, or Ether. Digital assets directly available on the Bancor Network include BTC, BSV, LINK, ETH, LTC, USDT, BUSD, and USDC.
Of course, as with many blockchain and cryptocurrency startups, the question of experience and credentials raises its head. In this case, both platforms have a serious pedigree.
Banxa enables its customers to purchase digital assets via multiple payment methods such as credit/debit card, Apple Pay, or bank transfer. It has served crypto companies since 2014 and is listed on the Toronto Stock Exchange.
And Bancor invented automated-market makers (AMMs) on the blockchain in 2017, building its decentralized exchange into one of the leading and most-used DeFi projects.
"By integrating with established players such as Bancor, Banxa aims to build and extend its network further by providing economies of scale for crypto-enthusiasts," Bussell said. "Our core aim is to provide the best, most secure, and easiest journey for existing customers, and a simple and secure path for new market entrants. It allows Bancor users to access the crypto market more efficiently and securely. "
What this all means is that we're getting ever closer to a world where consumers can easily, and with a high level of trust, use cryptocurrencies without having to learn the industry's language and in a way that can scale to mainstream adoption levels.
"We are growing," Bussell said. "We chose to go the listed route rather than the acquisition route as it allows us control over the quality of our offering and to grow sustainably. There are several players in the crypto/fiat gateway space, but like early-stage projects in blockchain, many of those players are private companies and lack transparency. The rates of exchange and hidden fees were high and opaque. Banxa was formed with the idea to change all of this."
So what's next for Banxa, and how will it realize its vision to make cryptocurrencies mainstream?
"It is relatively easy to accept credit card payments, but more challenging to set up a pathway to allowing local bank transfers, which is cheaper for consumers," Bussell said. "As Banxa grows, we will add more countries, more assets, and better payment times and methods. We aim to do everything we can to make user journey's as simple as possible."
Amen to that.