Hassan Maishera
With traditional banking systems facing mounting challenges from digital alternatives, outside-the-box thinking is needed if banks are to remain viable. What this thinking will engender is anyone’s guess, though support for cryptocurrencies and cheap cross-border payments is likely to prove popular with most people.
The meteoric rise of mobile-first banks like Monzo and Revolut, coupled with the growing adoption of cryptocurrencies and DeFi protocols, has given rise to a financial world within a world, one characterized by open borders and low-cost transactions. Which is perhaps why solutions that combine TradFi with Web3 are starting to emerge.
In a sense, these solutions show traditional consumer banks where the hands have come on the clock, proving once and for all that two disparate worlds can harmoniously coexist.
What is CrossFi?
There is perhaps no better example than CrossFi, a project that combines the regulatory compliance of traditional banking institutions with the efficiency and auditability of blockchain technology.
Reflecting universal demand for secure, accessible financial services, without leaving crypto offerings off the menu, CrossFi’s ecosystem takes a bells-and-whistles approach. At the center of the platform is CrossFi Chain, a high-performance Layer1 blockchain that offers dual compatibility with both EVM and Cosmos networks. Within three months of its mainnet launch last year, over 500 decentralized applications (dApps) deployed on the platform, and the number has continued to rise.
Powered by its native $XFI token, which is available to buy or trade on multiple major exchanges, CrossFi Chain facilitates transactions on a range of applications from liquid staking protocols to DEXs. Where the project really separates itself from the competition, though, is with its bridging technologies: those that merge the formerly incompatible worlds of Web2 and Web3.
Take its decentralized crypto banking application as an example. Like the best neobanks, it enables simple fiat-to-crypto conversions and cross-border payments in the blink of an eye. The difference is, with the app and CrossFi’s non-custodial multi-currency payment card, there is no trusted custodian. Instead, users spend crypto directly from their linked MetaMask accounts, maintaining provable ownership of funds and the convenience of TradFi payment systems.
Indeed, hashes are generated for each and every transaction, effectively making CrossFi’s payment card on-chain, since all payments can be easily tracked in a blockchain explorer.
A Regulatory-Friendly Solution
In an industry often slammed for its lack of regulatory oversight, CrossFi stands out for its proactive approach to compliance. Specifically, its adherence to Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, the sort that ensure only reputable users are availing themselves of its services.
In addition, CrossFi has achieved the Payment Card Industry Data Security Standard (PCI DSS) certification to certify its handling of customers’ financial information.
“We’ve made sure that our systems align with traditional finance regulations while preserving the decentralization of crypto,” CrossFi CEO Alexander Mamasidikov said in an interview last year.
Why Not Both?
With the total value locked (TVL) in DeFi sitting at $127 billion, CrossFi has positioned itself as a one-stop shop; a gateway to the Web3 world that should appeal to both crypto natives and consumers pushed into the arms of neobanks. The mantra seems to be: Why not both? The decentralization of blockchain and crypto with the convenience of TradFi.
As well as its online banking app and payment card, CrossFi has its own algorithmic dollar-pegged stablecoin, xUSD, which provides a stable foundation for various financial tools built atop its blockchain. In the near future, it hopes to expand its ecosystem by supporting tokenized real estate and commodities, further integrating TradFi into the Web3 world (or is it the other way around?).
By relentlessly pursuing innovation and consistently expanding its service offerings, CrossFi is helping to shape a future where traditional and decentralized technologies happily coexist. TradFi banks would do well to take notice.
