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How Crypto-to-Fiat Bridges Provide a Viable Solution to Rise and Fall Problems


By Ivan Tomic, co-founder of Safegram

The emergence of digital assets or cryptocurrencies has come as a silver lining for the underrepresented, unbanked and underdeveloped population of our world who are to date deprived of minimal financial facilities. Their accessibility and affordability on a global scale contrasts starkly with the lack of accessibility of physical banks and the fees for international bank transfers. However, although cryptocurrencies are accessible worldwide, they are not acceptable worldwide. These digital assets have yet to find a viable use in people’s daily lives.

Of course, one can use cryptocurrencies to make cross-border international payments in minutes, but crypto payment in many cases cannot be of real immediate use to the recipient. This is where the complexities arise.

Moving value between two financial systems

For example, think of an online business that accepts cryptocurrencies as a form of payment. The business owner has an easy on-ramp onto the crypto highway and, thanks to payments from around the world, has significant crypto holdings as well. However, if the business owner lives in the part of the world where cryptocurrencies are not recognized or accepted, they will find it difficult to get off the crypto highway to put those holdings to good use.

Indeed, transitioning from crypto to fiat or vice versa is essentially moving monetary value between two financial systems that play by different rules. Thus, such transactions naturally run into friction. In the early days of the industry, scaling up was the biggest issue. Converting different fiat currencies into their crypto counterparts was a huge task. However, the emergence of a wide variety of cryptocurrency exchanges has provided a viable solution.

Today, it’s easier than ever to get on the crypto highway with not only exchanges, but also opportunities to earn crypto for work, accept crypto payments, and through reward programs like airdrops. But, getting off the freeway is where users still struggle. Centralized exchanges are an option, but users still need to find an exchange that allows switching to their currency of choice. And even then, the exchanges sometimes take days to distribute the amount and some of them have a withdrawal limit. All this contributes to the friction of the exit ramp.

When scaling up is an issue, mass adoption of cryptocurrencies is hindered because simply holding on to crypto savings is not an option for everyday users. So, what the crypto industry needs today is a mechanism that allows users to not only easily get on, but also get off the crypto highway, at their convenience to meet to their various needs. And in this regard, the latest industry innovations in terms of crypto-fiat bridges could provide a solution.

The purpose of these crypto-to-fiat bridges is quite simple. They make it easy to convert crypto assets into fiat currencies. Some of these platforms take the debit card approach and allow users to load their crypto holdings onto the card to use for everyday payments.

Then there are others like SafeGram that allow users to send a 1:1 ratio of their crypto holdings in fiat format anywhere in the world. This approach is not only the most practical but also the most effective. It seamlessly links the two financial systems and allows users to easily switch between them.

Going back to our example, business owners can still offer customers the option to pay in crypto while they themselves receive in fiat. On the other hand, if they choose to have crypto assets, they can use those assets to directly make fiat payments for their day-to-day needs. This not only lowers the barriers to entry into crypto, but also creates new use cases for the asset class.

Leveraging the Convenience of DeFi

Despite its many successes, the global financial system has long failed the vast majority of people in low- and middle-income countries. But the advent of blockchain technology and digital assets is propelling us towards a possible future where premium financial services are served on a platter to everyone across the globe. In this context, the importance of newly emerging crypto-fiat bridges cannot be overstated. By placing themselves between these two financial ecosystems, they allow people to easily access the convenience of decentralized finance and take advantage of state-of-the-art financial infrastructure, even in the realm of traditional finance.

About the Author:

Ivan Tomic is the co-founder of Safegram, a secure, efficient and the world’s only decentralized finance ecosystem, allowing you to send the 1:1 value of your blockchain holdings in fiat format anywhere in the world.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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