Crypto's Missing Link: Bridging the Gap to Mass Adoption

Opinion by: Timothy Chen, global head of strategy, Mantle

While cryptocurrency adoption surges in Southeast Asia and Latin America, a significant hurdle remains: slow, unreliable, and exclusive payment systems. The promise of blockchain-driven financial sovereignty is incomplete. Millions own digital assets but can't seamlessly integrate them into daily life.

The Capital Access Challenge

This disconnect—digital wealth without practical utility—is particularly acute in emerging markets. The unbanked may hold tokens but lack access to basic financial tools, from cross-border payments to yield-generating options. Stablecoins offer a crucial solution, providing a lifeline for dollarized savings and access to global markets—primarily the US. The next step involves simpler access to US Treasury bills, likely driving further growth in tokenized funds like BlackRock's BUIDL.

While not revolutionary for existing USD users, stablecoins are transformative for those in non-dollarized economies. However, a major issue arises: the lack of smooth off-ramps for stablecoin holders, meaning they struggle to use their digital savings in daily transactions.

The irony? $100 billion in Bitcoin ETFs offer instant liquidity in the US, while stablecoin holders in emerging markets face significant challenges. This imbalance undermines crypto's potential for financial inclusion.

Payments: The Key to Inclusion

Stablecoins offer stability in high-inflation markets. Yet, accessing and spending these assets remains difficult due to complex banking systems and p2p networks. The increased use of stablecoin infrastructure—by companies like Meta, Visa, Stripe, and Fidelity—highlights blockchain's potential for cross-border payments. However, these solutions often leverage existing centralized systems, limiting their impact in emerging markets.

Further challenges include regulation and last-mile access. Many crypto services in regions like Latin America and Southeast Asia have struggled due to banking restrictions and the lack of reliable internet and banking infrastructure in many areas.

Building a Globally Inclusive Financial System

Emerging economies provide a prime testing ground for blockchain's real-world application. Similar to how China rapidly adopted mobile payments, these markets are poised to lead crypto-native banking adoption. The shift towards on-chain financial activities will begin where traditional systems are weakest. Crypto neobanks have the potential to address real-world economic challenges beyond speculation.

However, a critical missing piece is a robust banking account layer. Current solutions often offer self-custodial wallets and debit cards but lack easy on-ramping. A full-loop system is necessary.

The Need for a Full-Loop System

A crypto neobank integrated with a modular Layer-2 Ethereum network could offer a solution. This integrated approach allows for better unit economics and allows deposits via traditional bank transfer rails. Currently, many solutions only allow users to convert local currency to digital assets, creating a one-way street where those assets are difficult to convert back into fiat currency. This limits their practical utility.

Unified accounts for fiat and crypto, with real-world spending capabilities and full-loop systems, are needed. This allows for a complete financial cycle, ideally including direct salary deposits into these unified accounts. This would eliminate the friction of moving between traditional and digital financial systems.

Until widespread salary payments in stablecoins become reality, robust interfaces between traditional and digital financial systems are essential. Banking-first models, leveraging existing user behavior, can capture the shift towards blockchain-based finance.

Equitable Access to Finance

Crypto neobanking needs to be built from the ground up, creating a seamless interface between DeFi and fiat. The goal is to provide equitable access to finance for everyone. This requires a holistic on-chain financial architecture, addressing emerging market needs by protecting users from currency devaluation while enabling practical utility. This is a combined product and technical design challenge, similar to how Windows and Apple simplified technology access.

Opinion by: Timothy Chen, global head of strategy, Mantle

Disclaimer: This article is for general informational purposes only and does not constitute investment advice.

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