Global crypto ownership is growing

Consumer adoption of cryptocurrencies is growing. Consumer surveys by Statista suggest that 10% of the world’s adult population is now using crypto, rising to 12.5% by 2028. Emerging market countries show higher adoption, often driven by local currency volatility or mistrust in traditional financial systems, making crypto an appealing alternative. If your customer is based in Latin America for example, there’s a 1 in 3 chance that they will have already used stablecoins to pay for something, according to this Mastercard study.

Regional differences‍

‍There is already strong adoption of crypto in Latin America, South Asia, Africa and North America. But across these regions, crypto use cases differ. In markets with a more developed financial services infrastructure for example, like the US, adoption is being driven by crypto speculation and trading. In emerging markets, it's more likely driven by economic necessity and geopolitical factors. A recent study from Visa, and YouGov for example showed almost 1 in 2 people in the emerging markets studied, used stablecoins as a way to access strong currencies like dollars, in digital form.

The rise of crypto as a payment method

Crypto has created a new global payments layer in the form of stablecoins. Originally designed to bring stability to crypto, stablecoins hold their value by pegging it to something else – typically the US dollar. Crypto traders were early adopters, moving their earnings into stablecoins to avoid volatility, without leaving the crypto ecosystem. Today stablecoins have found other important uses: as a store of value in markets with devaluing local currencies, as well as a way to send money globally at the speed of the internet, 24/7/365.

‍Stablecoins payment volumes are catching up with traditional methods

‍Stablecoins are not the largest cryptocurrency by market cap, but because of their utility, they make up around half of all transactions on the blockchain. In the last 12 months there were $2.5 trillion stablecoin payments (discounting activity associated with trading, and large-scale, institutional money movement), more than established payment networks like PayPal. At BVNK we process billions in payments every year and from our own data we can see the dominance of stablecoins as a payment method: accounting for 95% of our customers’ crypto pay-ins and 90% of crypto payouts in the last 12 months. 

B2B use cases are growing

‍As more consumers hold crypto, more businesses are looking to offer it as a payment option. At BVNK we enable forex and CFD businesses to accept crypto pay-ins and make payouts to customers in countries where crypto adoption is high. We’ve also seen that as more forex companies get comfortable using crypto, they’re using it to send and receive business payments too. We’re seeing the rise of retail FX companies settling liquidity providers for example, and payment companies liquidating their fiat settlements into stablecoins like USDT to settle forex providers on a daily, weekly and monthly basis. 

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Nascent technologies come with challenges

Like any young technology, cryptocurrencies come with their own challenges.

Navigating crypto regulation

‍The regulatory landscape around crypto remains mixed. But there is lots of progress to celebrate, with new regimes bringing greater clarity and assurances. The MiCA framework comes into effect in the EU this year for example, replacing national licensing arrangements for virtual asset service providers (VASPs). While VASP regimes typically focused on anti-money laundering (AML) and countering the financing of terrorism (CFT), MiCA's broader scope includes robust operational resilience and risk management frameworks. 

For businesses operating in this space, MiCA brings assurance that stablecoin funds are being safeguarded and that regulated crypto services providers are overseen by an EU supervisor, held to similar standards as Europe’s Electronic Money Institutions (EMIs) and other regulated financial institutions. In the last few years, we’ve also seen positive regulatory moves in other regions, including the UK, Singapore, Australia and the UAE.

Off-ramping can be inefficient, without the right partner

‍Since most crypto companies are only licensed as virtual asset service providers, converting crypto into fiat can be inefficient: you might have to add additional fiat payment providers to your ecosystem, or manually execute conversions. But there are services like BVNK that are multi-rail, with fiat and digital asset service licences and infrastructure, to make it easier to move between fiat, crypto and stablecoins as you need to. 

What to look for in a crypto payments partner

So, crypto payments can help you to reach new markets and meet evolving consumer payment preferences. And for B2B payments, their speed and efficiency is unparalleled. But given some of the challenges we’ve touched on, what should you look for in a crypto payments partner?

Many hallmarks of a great partner will be the same for crypto as they are traditional payments, but here are some particular areas to watch for:

1. Licensing: To maximise your financial flexibility, find a partner that can reliably and compliantly serve you across both digital asset and fiat payments, with licences in reputable jurisdictions (and if they’re in the EU, a clear plan for MiCA compliance)
2. Bank partnerships: Look to understand the depth of your partner’s banking relationships and infrastructure, to ensure you can maintain business continuity and the right customer experience. 
3. Balance sheet:  A strong balance sheet with the support of top tier investors will ensure the right resources feed into product development, compliance regimes and overall service to you.
4. Full-suite, scalable payments: Work with a partner that has a range of payment capabilities including payouts to businesses and customers in fiat and crypto, scalable APIs and an easily accessible OTC desk for executing manual trades as needed. 
5. Reliable service: Make sure the support you receive doesn't stop once you've signed the contract. Look for a team with dedicated resources and experience in CFD and forex. It’s critical that your provider understands your needs and feeds this into their product roadmap, for the longterm success of your partnership. 
6. Robust security: Protect your data security by checking for past hacks or security breaches of your provider, and look out for certifications such as ISO 27001, as evidence that their information security controls are up to scratch.
7. Proven AML controls: Lastly, and importantly, look at their anti money laundering systems and controls. Whether the provider has compliance represented at the C-level is also a good indicator of their focus here. 

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How BVNK supports forex and CFD leaders

BVNK enables forex and CFD businesses to accept crypto deposits from customers and get automatically settled in their fiat currency of choice (or keep their funds in crypto). We also enable crypto withdrawals, without the need to keep crypto on your balance sheet. The BVNK platform brings together fiat, stablecoin and crypto payment rails, underpinned by global licensing and compliance across digital asset and fiat payments.

To see some of these payment flows in action on BVNK, take a look at this demo from product manager Jordan Matthews.