Crypto’s Crisis Hasn’t Diminished Its B2B Utility

While the markets for cryptocurrency and digital assets are seeing unprecedented volatility and decline, they can look better when you take a longer perspective. 

“It’s always important to just differentiate about the fundamentals that are just building up, and this space has evolved a lot in terms of technology adoption, even security, but sometimes it goes too quickly and then a correction is necessary,” Holger Arians, CEO at Banxa Holdings, told PYMNTS. 

Arians has been in this space for eight years and has seen growth accelerating has to unhealthy levels lately. He pointed in particular to the hype nonfungible tokens (NFTs) have been generating as an indication of a broader problem at the root of the current crisis: Most consumers have a hard time grasping the underlying value crypto offers. 

The technology, on the other hand, is still going strong, Arians said, adding that it has much more validation and there are many more use cases. 

Those use cases, which range from financial firms moving assets worth hundreds of millions of dollars between institutions to the blockchain-based supply chain revolution, are strong. But there are far too many cryptocurrencies out there — 10,000 or more — and a contraction is due. And with the broader economy in trouble, there is more pain to come. Certainly, Goldman Sachs’ decision to downgrade major U.S. cryptocurrency exchange Coinbase to a “sell” on Monday (June 27) suggests that. 

“I think it’s really important to see that the fundamentals are there and that this space just keeps on building,” Arians said. “I think the next year or two will be all about building and the next big companies — the next big Googles and Apples — that are coming out of this.” 

Onboarding People to Web3 Safely 

Banxa provides on- and off-ramping solutions for crypto exchanges. On June 14, the company announced it had entered a new partnership with digital assets platform WonderFi Technologies. 

“Companies like ours who’ve been around for a long time and will be for a much longer time, we will sort of be the constant, the stability, in this, where we are onboarding people into this space in a safe way,” Arians said. 

WonderFi has made it much simpler for consumers to get involved in the digital asset space, and Banxa processes the payments, does the fraud assessment, and performs the transaction monitoring and regulatory reporting, Arians said. 

“We do the settlement of the crypto into the user’s wallet, and then they can work with platforms like WonderFi to grow their assets, send money from A to B — there are endless opportunities,” Arians said. “So, we really just want to remove the friction in a safe way.” 

Transparency — and a Better UX 

Banxa expects to see more regulation coming in for consumer protection and believes that is good. The company has worked closely with Australian regulators since the country started rolling out crypto safeguards in 2018. It also became a public company in order to be audited and transparent, which is appreciated by the banks it works with and the regulators. 

“After such a long time of crypto assets being around — more than 10 years — they’re not going to go away, and they’re only going to take over more of what we know from the real world,” Arians said. “So, it’s really important that we have some sort of consumer protection and regulation around this so that regulators and consumers are all onboard.” 

Similarly, in the case of Web3, user adoption comes with a better user experience, Arians said. NFTs were a great way to onboard users to this space, and this process needs to happen for all of Web3. 

“Web3 is huge,” Arians said. “Many, many things that we know from the real world will be translated into Web3. It’s here, it’s here to stay, and it’s only going to grow.” 

Looking at the Fundamentals 

Serving as a gateway into and out of Web3, Banxa fights the fraud that can happen when converting fiat currency to cryptocurrency. 

“Those gateways, those intersections between the real world and the digital asset world, that is where we can really fight fraud,” Arians said. “[Fraud] is an issue like in every other — well, everywhere, really, in the traditional world and in Web2.” 

Companies will have exposure to and opportunities in Web3 and in the digital asset space, and it’s worth exploring to see what it means to them, Arians said. 

“My view is that if we zoom out, this space is only growing,” Arians said. “It’s sometimes growing too fast, like we’ve just seen, then it needs a correction. The fundamentals are there, and that is what companies should be looking at, for sure, because it’s not going to go away.” 

But that growth could be a long time coming. 

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