Crypto Transfers Opens the Way for Secure, Fast and Global Connectivity

Until recently, crypto owners who purchased the assets through fintech apps were somewhat limited in how they could utilize their digital assets. One could buy, sell and hold, but they couldn’t easily (or safely) move their assets from one exchange to another – which begged the question of true ownership and decentralization.


Paxos’ launches crypto transfers and connection to the blockchain ecosystem




Since Paxos’ launch of crypto transfers (now available to all of our crypto brokerage clients), blockchain’s promise of global financial connectivity is one step closer to reality. By providing the ability to transfer crypto – also known as sending and receiving – securely and almost instantly, end users are empowered to control their digital assets and utilize them within the broader blockchain ecosystem.

A crypto transfer is a transaction of value on the blockchain network, facilitated by the movement of a digital asset from one person, or exchange, to another. There are various types of transfers, but one example would be where a user sends their digital asset(s) from one digital wallet to another.

This is welcome news for enterprise clients, who have seen an increase in customer demand for transfer capabilities as more consumer use cases emerge. PayPal became the first Paxos client to implement the native transfer of cryptocurrencies between their platform and digital wallets and exchanges. PayPal noted that after launching crypto buy, sell and hold capabilities in 2020, transfer capabilities had been consistently ranked by their customers as one of the most requested enhancements.1 Adding this capability, along with PayPal’s status as an industry leader, represents a turning point in the evolution of secure crypto connectivity.

Walter Hessert, Paxos’ Head of Strategy, is already seeing the impact.

“Transfer capabilities allow customers secure, seamless control over the movement of their assets. This improves financial connectivity, encourages more network activity and inspires participation from other trustworthy parties.”

 


Crypto before secure transfers



Since the early days of crypto markets, the way users interacted with their digital assets was generally restrictive – think of it as only having the ability to move assets around in a closed loop within a network, limiting access to other vital networks. Attempts to provide transfer capabilities have been uneven and often fraught with potential hazards for end users. This resulted in a simple buy, sell, hold mentality among crypto owners, which inspired most early interest in crypto to come from individual investors.


Crypto with secure transfers



The significance of launching secure transfers is that it brings the industry closer to authentic connectivity by inviting more consumer and merchant activity into the broader blockchain ecosystem. Instead of moving assets around in a closed-loop network, a user can now send and receive their digital assets with confidence. This has a cascading effect, because as functionality evolves, so will the entire ecosystem, facilitating more interconnectedness while creating additional on-ramps for new entrants.


Enterprise-ready crypto transfers are fueling growth and engagement

 

The next few years are likely to be a time of divergent growth in the banking industry, with traditional institutions looking to open new, low-cost revenue streams in order to attract customers. For them, the ability to offer secure crypto transfers is a game changer. Empowering users to do more with their assets leads to exactly that – more use, with additional touchpoints for enterprises to foster engagement. It also leads to an increase in new users who have more ways to enter, and leverage, the platform. 

A survey conducted by Paxos earlier this year showed that more than 44% of crypto owners purchased their first digital asset in 2021. As more individuals look to purchase crypto in the coming years, traditional institutions know that offering a crypto solution will be valuable and that their customers will expect to have transfer capabilities as part of that offering.

More than 60% of crypto owners surveyed would purchase crypto from their primary banking app if it was offered.2

In even better news for banks and other traditional institutions looking to offer crypto solutions – more than 60% of crypto owners surveyed would purchase crypto from their primary banking app if it were offered – but a lack of clear industry-wide regulation has the banking industry in “wait and see” mode. With the launch of secure crypto transfers, it gives banks and enterprises more of a reason to believe that now might be the time to join the ecosystem. 


Secure crypto transfers stimulates global growth



Examples of adoption and customer engagement through crypto launches aren’t just limited to the U.S. In some ways, Latin America may be looking to take the lead in crypto adoption. As of June 2022, 95% of Latin Americans
surveyed by Mastercard said they are planning to use a digital payment method in the coming year, and 51% of Latin American consumers have already made a transaction with crypto assets. 

One driver of participation is strong consumer demand for access to U.S. dollars. After initially offering USDP to their customers in 2021, Mercado Libre, Latin America’s leading e-commerce technology company, followed up by expanding its offerings to include transfers within their Mercado Pago app, powered by Paxos. Mercado Libre continued to see incredible success and eclipsed one million users of its crypto wallet in the first 60 days, with more people trading crypto using the app than on the Brazilian stock exchange.


The arrival of transfers is just the beginning



Looking ahead, we are likely to see transfers bring about greater financial freedom within the crypto ecosystem, with less middlemen, lower costs and speedier transaction times. When these capabilities are delivered to crypto non-native enterprises, Web3 becomes more than just a destination for early adopter enthusiasts – it will be used confidently by all consumers.

The technology behind secure crypto transfers isn’t new, but in some ways its arrival represents the spirit of the crypto ecosystem. The current financial market infrastructure is struggling to keep up with the speed and level of global interconnectivity occurring in each of our lives, every day. The launch of secure transfers takes us across a crypto threshold, into a future when everyone in the world, regardless of location, can trust that they have more control of the movement of their assets – in real time.

The good news is that as more people become interested and as more enterprises seek to partner with regulators, and regulated partners who are capable of leading these efforts in a fully compliant way, the more open – and secure the entire system will become. In this way, the arrival of transfers is just the beginning.

To learn more about the secure sending and receiving of assets with a digital wallet powered by Paxos, read more here!

Paxos partners with the world’s leading financial institutions to build crypto solutions.

 

1Fernandez da Ponte, Jose, PayPal Users Can Now Transfer, Send, and Receive Bitcoin,Ethereum, Bitcoin Cash, and Litecoin, https://newsroom.paypal-corp.com/2022-06-07-PayPal-Users-Can-Now-Transfer-Send-and-Receive-Bitcoin-Ethereum-Bitcoin-Cash-and-Litecoin

2Paxos, Purchasing Behaviors of Today’s Crypto Owners are Changing the Financial Landscape, https://insights.paxos.com/cryptocurrency-adoption-and-purchasing-behaviors

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