As the adoption of cryptocurrency continues to grow, it should be easy for users to understand how to purchase cryptocurrency with their fiat currency of choice.
This article will explore what fiat on- and off-ramps are and why they are critical to taking crypto mainstream.
The world of cryptocurrency is chock-full of terminology that may seem daunting at first, but many of these terms are important to understand in the context of a new digitised and abstract space.
For example, "Mining," the process for creating new bitcoins or BTC, is a simple metaphor for an otherwise technical process on the Bitcoin blockchain. Likewise, "Cold storage" is a term for holding cryptocurrency safely offline.
Luckily, the concepts "on-ramps" and "off-ramps," are fairly intuitive, as they will play an increasingly significant role in the mass adoption of crypto and fintech.
At MoonPay we're working incredibly hard to become the payment solution of choice for the next billion cryptocurrency users.
On-ramps for fiat and crypto
An "on-ramp" is a service that allows for the exchange of fiat currencies (e.g., US dollars, Euros) for cryptocurrencies (e.g., Bitcoin, Ethereum). Since fiat, or government-issued currency, is by far the most widely adopted form of currency globally, exchanging fiat is the most accessible method of access to cryptocurrencies. In other words, it's an "on-ramp" to the world of crypto.
While millions of people worldwide have already purchased and invested in cryptocurrency, the process still can be a little challenging at first. An intuitive and straightforward on-ramp process is essential for crypto adoption to continue.
Off-ramps for fiat and crypto
By contrast, an "off-ramp" is a process and service that allows for the exchange of cryptocurrencies for fiat. While on-ramps will be the most important means of mass adoption, the availability of an off-ramp is significant, as it assures users that they're not locked into a cryptocurrency and can exit (i.e., sell crypto for fiat) at any time.
Off-ramps are, therefore, complementary to on-ramps and serve an important role in bridging the gap between traditional, fiat-dominated finance and the cryptocurrency marketplace. Fiat off-ramps are especially critical in the context of decentralized finance as well. Naturally, the easier it is for users to purchase cryptocurrency using their bank account or debit card, for example, the more participants there will be in the market.
The cryptocurrency highway
The concepts of on-ramps and off-ramps paint a picture of a highway where users can easily get on and off at any time. From a user perspective, ideally there would be a seamless experience in which it's just as easy to use an on-ramp as it is to use an off-ramp.
When the whole experience of buying and selling is appealing and effortless, more users will naturally be drawn to the market. A helpful analogy is a retail store. A store that optimises its on-ramps (e.g., short checkout lines) or off-ramps (e.g., lax return policies) will attract more customers, but not as much as a store that optimises both.
A complete on-and-off-ramp solution
So what about services that optimise on- and off-ramps in the cryptocurrency space? Since direct fiat exchange is not a feature of many coin exchanges, and others have only on-ramp (or limited off-ramp) capabilities, payment solutions that offer a seamless on- and off-ramp functionality are extremely attractive for both new and existing cryptocurrency users.
Here at MoonPay, we're a market leader in providing such solutions. Awarded "Best Cryptocurrency Purchasing Site" at the 2021 Fintech Breakthrough Awards, we provide a frictionless buy and sell functionality that allows users from over 160 countries to securely exchange over 80 crypto- and 30 fiat currencies.
With a simple, user-friendly design and an easily integrated API that expands its reach to trusted wallets like Bitcoin.com and ZenGo, MoonPay's ambition is not only to be the most trusted on-and-off-ramp solution but to be the payment solution of choice for the next billion cryptocurrency users.
It's a long journey to the moon, but we're on the highway and just getting started.