Market activity and price movements invariably catch the most headlines in the digital asset sector. But for insiders, the success metric that really matters is the same as for any other emerging technology – adoption. From motor vehicles to the internet, only the technologies that successfully gain adoption go on to change the world. However, in a sector that’s historically been dominated by startups, it seems that established TradFi stalwarts such as Multibank Group, with its personal customer service touch, or Raiffeisen, with a bank-like crypto trading interface, have a deeper understanding of what it will take to reach a tipping point for the mass adoption of crypto.
Cryptocurrencies and digital assets promise to transform the world of finance and the way we exchange value. However, mass adoption of crypto across the globe remains an elusive goal. Chainalysis publishes an annual report into the state of crypto adoption across the globe, and according to the 2023 edition, grassroots crypto adoption is down overall, with only lower-middle-income countries such as Nigeria and Ukraine bucking the trend.
Why is Crypto Adoption on the Downturn?
There are likely to be several factors behind the adoption decline. Firstly, the uncertain regulatory environment in many countries can act as a deterrent. Even people more comfortable with handling assets of a more nebulous regulatory status may be deterred by the idea that their holdings could be frozen or seized in a clampdown.
The Chainalysis report lends credence to the idea that a stable regulatory environment fosters adoption. It highlights that the UAE, with its favorable stance towards crypto and blockchain innovation, stands out as an adoption hub among other MENA countries, which have mostly taken a far less progressive stance.
The catastrophic collapses of 2022, followed by yet more regulatory turmoil this year, haven’t helped matters either. The trial of Sam Bankman-Fried exposed the deep-rooted fraud that was taking place at the firm under the full oversight of its leadership team, many of whom took the stand to testify as to the extent of their own involvement – and the awareness of their CEO.
However, one of the biggest blockers to adoption may just be that the technology gap is still too substantial for the masses to traverse. With TradFi, users need to understand the financial instruments, but the tech element is usually straightforward for most products. With crypto, many layers of understanding need to be in place for successful trading. Even longtime industry insiders acknowledge that the inherent complexity – not just in blockchain technology but across the entire ecosystem of tokens, projects, applications, and infrastructure – could be the industry’s downfall.
A Fresh Approach with Familiar Appeal
A different approach could be the key to improving crypto’s appeal. While automation and decentralization have historically fostered quite a hands-off approach to user support, crypto platforms may need to invest more in a personal touch. In this area, TradFi firms may have an advantage. MultiBank Group is one example.
With an 18-year history in the banking industry, the firm has earned recognition as the world’s most regulated derivatives broker. Having recently launched Multibank.io, its cryptocurrency platform, the firm is now seeking to leverage the reputation it has already established for security and regulations – along with the extra mile when it comes to customer support. Each individual who registers with the Multibank.io platform is assigned a relationship manager to support them with their personal trading needs. Furthermore, support is available 24 hours a day, 365 days a year, and backed up by a 24/7 chatbot, which is supported by human agents as needed.
It’s also one of the most regulated exchanges, with MultiBank Group comprising several entities that are regulated by 14 financial authorities on five continents. This will soon include oversight by the UAE Virtual Asset Regulatory Authority, under which MultiBank.io has already been pre-approved for a license.
Bridging the Technology Gap
Other TradFi firms are also leveraging their expertise and infrastructure to make crypto a more user-friendly environment. Raiffeisen Bank International, a European financial institution headquartered in Austria, recently announced plans to extend cryptocurrency services to its retail customers in partnership with Bitpanda. Offering users the chance to buy and sell crypto via their existing banking app interface, trading will work in the same way as standard account-to-account transfers, significantly reducing the perceived technology gap.
Perhaps one of the most disruptive crossovers between TradFi and crypto has come from one of the original fintech disruptors – PayPal. Following a dramatic entrance to the cryptocurrency services arena in 2020 – a move which many credit with kickstarting the last bull market – the payments giant made more waves this year when it launched its own stablecoin, PayPal USD. The August announcement, which came a little over a year after the implosion of Terra’s UST stablecoin, outlined the firm’s intent to plug a gap in the stablecoin market with a stablecoin that offers “robust consumer protections” and underpinned by a “clear regulatory framework.”
While the innovation and agility of startups and individual entrepreneurs often provide the spark for new technologies, historical precedent shows that people seek out the reassurance of familiarity. By providing a safe route into crypto from traditional finance, banks, and TradFi firms are in a prime position to foster the mass adoption of digital assets among their established global user bases.