How crypto platforms can speak ‘bank’

Build faster, serve customers better and guard against ‘debanking’ by speaking the language of compliance. Banks and crypto platforms haven’t always spoken the same language. So much so, conversations between them have been like a duck and a hen talking.

This isn’t really surprising, is it?

Banks and crypto platforms have come from different places at different times. Banking has existed largely unchanged for 5,000 years since its origins in ancient Greece and Oikos Nomos. Crypto began as a thought experiment around a dozen years ago and exists both everywhere and nowhere due to its decentralized nature.

Although banks and crypto platforms haven’t always had a lot in common on paper, in practice that’s changing. We’re seeing the two interacting. And we’re not just saying that because Fiat Republic acts as a translator to fix the broken link between them.

So, what’s caused the big rift in relations? What’s been the role of compliance, and how can banks and crypto platforms collaborate for business success?

Banks and fintechs speaking to, not at each other

Banks and crypto platforms have been on a similar journey to banks and fintechs. When financial technology start-ups began to attract attention, talent and investment, they were met with a mix of terror and suspicion.

Banks feared that fintechs would eat their lunch, steal their customers and disintermediate them. Fintechs thought banks were stuck in their ways, slow to innovate and not customer focused. Both sides became increasingly entrenched. They spoke at each other, rather than to each other. Interactions were confrontational and adversarial. Sound familiar?

But then something funny happened. Both sides realized that almost nothing in banking or payments happens without multiple counterparties. These work across many different parts of the ecosystem with an interconnectedness, and thus an interdependency, to serve an often common end-customer.

Rather than competition, banks and fintechs tried collaboration and co-opetition. The win-win achieved through engaging in a mutually beneficial way defines the general relationship between banks and fintechs and crypto-friendly banks and crypto platforms today. It is as the African proverb suggests: if you want to go fast, go alone. If you want to go far, go together.

Compliance: the common language

So, where do banks and crypto platforms want to go together? Both want to go forward to win and retain customers. They want to expand into new markets, plus onboard customers quicker and more cost-effectively.

At the same time, banks don’t want regulatory investigations, fines or bad publicity due to their crypto customers. Any more than crypto platforms want service interruptions, frozen accounts or to be offboarded by their banking partners. Robust compliance underpins all of these objectives.

For crypto platforms, better user experience – seamless on-ramp/off-ramp transactions, transfers without leaving the app, more currencies and services – is important. But for their banking partners as regulated entities, it all starts with compliant customer due diligence.

That’s why we believe that compliance is the common language between crypto platforms and banks. And why we’ve built KYC and AML checks into our processes. Our on-platform tools and workflows help outsource compliance checks, streamline operations and speed up reviews. This delivers compliance with less time, budget and resource spent on becoming compliant.

Talk to us

Fiat Republic links crypto platforms and banks with a banking-as-a-service solution, aggregating multiple fiat rails (we call it fiat-as-a-service). Available via a single API, we provide access to virtual IBANs, SWIFT, local payment rails and more. Our banks are crypto-friendly; we’re also helping make more banks crypto-friendly by prioritizing compliance with our crypto platforms.

Through our robust compliance-first mindset, onboarding framework and tech-enabled compliance processes – we enable secure, sustainable access. That’s reliable access to crypto flows for banks. And reliable access to fiat currency for crypto platforms.

We’re also working hard to address systemic access problems through our crypto consortium. Because, we believe that by joining forces, the entire crypto ecosystem will benefit. The consortium brings crypto platforms and banks together to promote best practice, keep out bad actors and cooperate with regulators to advance crypto access and adoption. More on the consortium coming soon.

To find out more or schedule a demo here.

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