In today’s market, cryptocurrencies account for $2.19 trillion in market capitalization, making it the world’s 8th largest economy in terms of GNP. Despite this, cryptocurrencies remain mysteriously invisible to the average consumer, as they remain the domain of bitcoin miners and speculators. However, this may change in the near future.
Cryptocurrency has had a difficult time entering the mainstream as most businesses lack the tools to participate in blockchain-based currencies. Facilitating crypto-friendly APIs is the solution to how embedded finance can take crypto into the mainstream.
Cryptocurrency Adoption Can Be Improved With Embedded Finance
Financial providers must integrate cryptocurrency into their existing products for consumers to access it on a daily basis. At present, most business’ retail banking is conducted with traditional lenders. However, most of these institutions are incapable of accepting, holding and transferring cryptocurrencies.
In the coming years, if embedded finance is integrated more firmly, it could transform and evolve the prevailing system, providing banks and retailers with flexible solutions that integrate easily with crypto-as-a-service platforms. Consumers can start integrating cryptocurrency into their everyday financial lives with the help of financial and non-financial partners. This would include using cryptocurrency to pay for goods and services, having current and savings accounts using cryptocurrency as well as investing in cryptocurrency and managing cryptocurrency transfers alongside other financial products.
These services can unlock the real-world benefits of cryptocurrency and move it beyond just a niche investment tool in terms of:
- Instant Payments: Blockchain technology allows for faster, more direct payments, improving customer convenience and service levels.
- International Business: Crypto payments allow users to send money around the world instantly without paying FX fees or using bank intermediaries.
- Reduced Fraud: Cryptocurrencies have a high level of encryption, which makes them harder to steal or counterfeit.
The Competitive Nature Of Crypto Services
Getting caught up will be one of the main challenges for incumbent financial providers. The perceived risk and cost of implementing new systems have kept many traditional institutions from entering the space. However, more established crypto firms will be able to strengthen their competitive position as digital currencies become more mainstream, and as a result, legacy players will need to adapt to keep up with consumer demands.
Connectivity will play a key role in designing the systems of the future. Systems and technology will have to reflect the decentralised and flexible nature of the crypto market which will also call for a great deal of investment and time. Typically, incumbents can add functionality to their offerings by building or buying solutions.
Investing In A Cryptocurrency Future
Technology-enabled businesses have the potential to capitalise on cryptocurrency adoption by creating new, more convenient and secure customer experiences. Meanwhile, companies can either build their own crypto-ready tech stack or partner with a plug-and-play integration that integrates with their existing systems as they wait for mainstream providers to catch up.
With a simple crypto-friendly API, businesses can provide users with the option to buy, sell, and hold the most popular digital assets within their business applications, as well as future service elements such as stable coin wallets and crypto acceptance. This approach will increase the profits of banks and FinTech since they can compete with players who are trying to lure customers to their banking applications.