Stripe Enables Fiat-to-crypto On-ramp
Stripe will manage all KYC requirements, payments, fraud and compliance
Sundry Photography/Shutterstock.com
Global payments processing company Stripe is launching its own fiat-to-crypto on-ramp, allowing customers to exchange dollars for cryptocurrencies.
Stripe’s new transactions solution is billed as a customizable widget, which can be directly embedded within different DeFi platforms.
The most common way to on-ramp fiat-to-crypto today is to purchase cryptocurrencies through a centralized exchange — including the likes of Coinbase, Binance, Kraken and the recently deceased FTX. To partake in DeFi, one then transfers the cryptocurrency to a third-party wallet.
As a major payments processor for prominent Web2 companies, such as Apple and Walmart, Stripe’s decision to step further into the crypto world during a time when centralized exchanges are under heightened scrutiny can help DeFi become more accessible to mainstream consumers.
“It’s extremely difficult to get end users ‘on chain’— that is, to fund their wallets with the crypto required to interface with Web3 applications,” Jennifer Lee, product manager at Stripe, wrote in a blog post.
Lee added: “Developers have to wrestle with rampant fraud; navigate complex KYC requirements; and somehow still offer a seamless, high-conversion payments experience so that their users can actually use their Web3 applications.”
Stripe says it will handle tasks related to KYC requirements, payments, fraud and compliance.
Companies that already partner with Stripe for fiat-to-crypto on-ramp services include NFT marketplace Magic Eden, social NFT platform Nifty’s, and decentralized exchange Orca.
There are very limited ways to use DeFi services without a centralized mediator. Stripe’s latest fiat-to-crypto onramp will compete with non-custodial exchanges, such as Kado, which recently moved to bring its on- and off-ramp services to Ethereum, Solana, Avalanche, Cosmos and Axelar.
Kado welcomes the new competition.
“It’s great to see more established payment companies coming into the space, which has been part of our thesis all along,” CEO Emery Andrew told Blockworks via e-mail, adding “Payments innovation has always been one of the no brainer use cases for blockchain and cryptocurrency.”
Born out of the old Terra ecosystem, Kado initially launched a Terra UST native on-ramp and now supports Cosmos, Avalanche, Ethereum, and Solana, allowing transfers from bank accounts directly to wallets in fewer than five minutes.
For now, Stripe’s new products are slated to only be available to US customers, with availability to other countries in the works.
Updated on Dec. 2, 2022 at 1:44 pm ET: A comment from Kado was added.
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