This has been a challenging month for cryptocurrencies, with $300bn wiped off their total value amid the collapse of a number of high-profile stablecoins. However, there remains promise for payments, including through some recent open banking projects.
Open banking is increasingly finding its way into crypto projects. Crypto payment company Mercuryo recently announced the launch of open banking payments using its crypto wallet, while earlier this year BitcoinPoint partnered with API provider TrueLayer to allow the purchase of bitcoin via a banking app.
In the case of Mercuryo, the project will allow its three million app users to purchase crypto in real-time and make account-to-account (A2A) payments through an open banking integration with Volt. This provides an insight into the potential benefits of open banking for the crypto industry and its users.
By creating a user experience based on familiar interfaces and payments solutions, open banking could boost crypto adoption, removing the frictions and complexity that can deter less experienced potential users.
Open banking offers increased transaction speed and security, as well as removing caps on the amount that can be purchased. Crypto is bought at a specific time and for a specific agreed price, without the need for a pre-funding service. Payouts are also instant. By contrast, buying crypto with cards can take up to five days, increasing the chances of fluctuation in currency price, particularly among more volatile cryptocurrencies. Open banking also uses single-use access tokens and an industry-standard API, adding a security layer. Lastly, open banking solutions eliminate fees often associated with crypto purchases made by card, and allow businesses to skip interchange fees set by card networks.
While crypto is currently having a difficult moment, mainstream adoption remains on the rise, particularly for payments, and open banking may prove to be a vital element for its future development.