Fintech in the front, DeFi in the back – the silent cryptocurrency revolution is underway

PayPal’s stablecoin launch underscores a revived trend in the crypto industry.

It’s one that’s captured Wall Street’s imagination since 2016, promising quick turnaround times and reduced overhead. The so-called blockchain revolution: newer, cheaper rails for the financial system.

That reasoning fell off the headlines as a long and cold crypto winter ensued, followed by a surge in meme coins, yield farming, and the sector’s equally potent memetic get-rich-quick power.

With Bitcoin still eons from its all-time highs, but the tide appears to be turning. And these financial tracks are now getting the new coat of paint that the industry has been promising for the past seven years.

From Visa cards to digital dollars, crypto is slowly transforming the everyday financial experience right before users’ eyes.

For example, Gnosis recently launched the Gnosis card, which behaves exactly like a traditional Visa card, except it draws from users’ self-managed crypto wallets. Alongside the card, the crypto company has also launched Gnosis Pay, a PayPal A sort of equivalent that makes it easier for the weird world of crypto to better integrate with current financial networks.

“That’s certainly one way of looking at things,” Gnosis co-founder Stefan George told Decrypt about the PayPal comparison. “We connect the payment tracks – the old tracks and the new tracks – to make it really easy for you. That’s what PayPal did to make online money transfers very easy. Now we’re doing this for crypto.”

Elsewhere, Monerium has quietly rolled out its fully regulated euro peg stablecoins. EURe even has an IBAN, the European equivalent of a SWIFT code, which allows users to easily toss and play funds. They succeeded in doing this by acquiring the European e-money license in 2019.

Basically, you never know if the euros you just received are different from the euros you have always accepted.

“We can seamlessly move from off-chain fiat in the banking system to on-chain fiat in the chains we support,” Gisli Kristjansson, Monerium’s CTO and co-founder, told Decrypt. “€11 trillion in the banking system can flow freely like water onto a blockchain and then to any chain and then back into the banking system.”

Of course, the common factor between the new offerings from Monerium and Gnosis is that users may not even know they are using crypto.

From paying for groceries with a Visa card to paying for dinner for a friend, little has changed from the traditional banking experience.

“We can finally build something that offers exactly the same experience,” said George. “Finally we can ask the question, ‘Why should users actually use Web3?’ Until now, all you could say was, ‘I wouldn’t use Web3 because the user experience is bad.’”

In many ways, the crypto revolution closely resembles the fintech revolution and the arrival of Revolut, N26 and a host of neobanks.

However, the Gnosis co-founder says the crypto offering is very, very diverse.

“Because it’s permissionless innovation, we basically have a neobank that has a stable interface that allows anyone to expand what that bank can afford to offer their users, perfecting at that level to offer competition,” he told Decrypt. “They now have to offer something that is way, way better than what Revolut or N26 offer.”

In this way, crypto becomes less of a means for zoomers to become mega-rich by flipping low-cap JPEGs and more of a piece of software that any business can build on.

The competition to cut costs and attract more users is getting fiercer.

Provided, of course, that regulators can catch up.

A regulatory hurdle, not a technical one

The launch of Monerium’s euro stablecoin finally puts the project on the map.

But that doesn’t mean the team didn’t work hard to acquire that pesky e-money license in 2019.

“It took us two years to convince regulators that the license, which had lasted for about 18 years at the time, applies to public blockchains,” Monerium’s CTO said. “And it was a massive thing, not just from a technical standpoint, but also from a regulatory standpoint.”

This was part of the stablecoin issuer’s strategy, which included first obtaining regulatory approval, a key hurdle to mainstream adoption.

“We can either remain a fringe technology for fringe groups, or this can redefine financial infrastructure and internet markets,” Kristjansson told Decrypt.

It is also an important part of the Gnosis team’s current strategy. However, this can be difficult as regulators strive to protect users, and different projects often interpret this protection differently.

“Proximity to regulators is actually a top priority,” George said. “Then we can define the rules that qualify the regulator’s wishes.”

An example of what this might look like is constantly entering tedious know-your-customer (KYC) details with every financial interaction.

“It’s super annoying for users to keep assuming KYC for every additional service and entering all those details over and over again,” he said. “We built a platform that allows users to share this information with any other provider.”

This service is a partnership with another company called Fractal and of course decentralizes the whole process. Another identity platform called Out DID uses zero-knowledge proofs to perform the same function in terms of privacy.

Educating regulators about these new tools is now the most important task, says George.

“Most regulators want to do good,” he said. “They don’t want to harm anyone. They actually want to try to protect the users. But we have to educate them.”

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