Fintech in the Front, DeFi in the Back—Crypto's Quiet Revolution Is Underway

PayPal’s stablecoin rollout highlights a revived trend in the crypto industry.

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

That line of argument stopped making headlines amid a long and cold crypto winter followed by an uptick in meme coins, yield farming, and the sector’s equally powerful memetic force of getting rich quickly.

With Bitcoin still eons off its all-time highs, the tides appear to be changing though. And those financial rails are now getting that fresh coating of paint the industry has promised for the last seven years.

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

Gnosis, for example, recently launched the Gnosis Card, which behaves precisely like a traditional Visa card except that it draws from users’ self-custodial crypto wallets. Alongside the card, the crypto firm also launched Gnosis Pay, a PayPal equivalent of sorts that makes it easier for the weird world of crypto to better integrate with current financial networks.

“That's one way to look at it for sure,” Gnosis co-founder Stefan George told Decrypt of the PayPal comparison. “We’re connecting the payment rails—the old rails and new rails—to make it really easy for you. Kind of what PayPal did to make online transfers very easy. Now, we do it for crypto.”

Elsewhere, Monerium quietly launched its fully regulated euro-pegged stablecoin. EURe even comes with an IBAN, Europe’s equivalent of a SWIFT code, that lets users fling money back and forth seamlessly. They’ve been able to do this thanks to acquiring Europe’s e-money license back in 2019.

Basically, you’d never know if the euros you’ve just received were anything other than the euros you’ve always been accepting.

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

Of course, the common factor linking Monerium’s and Gnosis’ new offerings is that users may not even be aware that they’re using crypto.

From paying for groceries with a Visa card or paying back a friend for dinner, there’s very little that has changed from the traditional legacy banking experience.

“We can finally build something that is exactly the same experience,” George said. “We can finally ask the question, ‘Why would users actually use Web3?’ Previously, you can only say, ‘I would not use Web3 because the user experience sucks.’”

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

The Gnosis co-founder says, though, that crypto’s offering is much, much different.

“Because it's permissionless innovation, we basically have a neobank that has a stable interface that allows anyone to extend the offering of what this bank can afford to their users, offering perfect competition on this level,” he told Decrypt. “They now need to offer something that's much, much better than what Revolut or N26 has.”

In this way, crypto emerges less as a means for Zoomers to get mega-rich flipping low-cap jpegs, and more as a piece of software open to any business to build upon.

The competition to drop costs and lure more users becomes all the fiercer.

Assuming, of course, that regulators can catch up.

A regulatory hurdle, not a technical one

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

But that doesn’t mean the team wasn’t hard at work first acquiring that pesky e-money license in 2019.

“It took us two years to convince the regulators that the license, that existed then for like 18 years, was applicable to public blockchains,” the Monerium CTO said. “And it was a massive thing, not just from a technical standpoint, but from a regulatory standpoint.”

This was part of the stablecoin issuer’s strategy, which entailed first gathering regulatory clearance, a key hurdle for meeting mainstream adoption.

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

It’s also a key component of the Gnosis team’s current strategy. It can be tricky, however, because as regulators aim to protect users, this protection often gets interpreted differently between different projects.

“Being close to regulators is actually super high priority,” said George. “Then we can define the rules which qualify what the regulator wants.”

One example of what this could look like revolves around constantly inputting tedious know-your-customer (KYC) details with each financial interaction.

“It's super annoying for users to always go from KYC with every additional service and type in all these details again, and again, and again,” he said. “We developed a platform that allows users to passport that information to any of the other providers.”

This service is in partnership with another firm called Fractal and, naturally, decentralizes the whole process. Another identity platform called Out DID leverages zero-knowledge proofs to execute the same function with an eye to privacy.

Educating regulators on this new tooling is now the key task, says George.

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