by Vasily Sumanov - Economic researcher. Expert @icobench @cointelegraph
All crypto holders – who would probably rather prefer to be called «HODLers» - at some point have a need to sell their coins or tokens and get cash money for daily spending. Cashing out is even more critical for those directly involved in blockchain industry as they often receive regular payments or another sort of revenue in crypto. Whether it be ‘hodlers’ or crypto pros, their standard requirement is to cash out «on demand» at the right price and via secure and fast procedure.
Despite the fact that the first cryptocurrency exchange appeared back in 2010, while a well-known p2p platform localbitcoins.com in 2012, the problem of fast cash out that takes no longer than a couple of minutes is super relevant today. Why is that so?
- The majority of top cryptocurrency exchanges doesn’t have fiat pairs
It seems crazy, yet it’s the fact that 3 of top-5 crypto exchanges don’t have fiat at all! Only one of them – Bitflyer - has a JPY exchange option only, while Bitfinex has a set of fiat currencies (USD, EUR, GBP, JPY).
If we go further down the list of top-10 most significant exchanges and check positions from 6 to 10, we will find two exchanges with KRW (Korean won) and nothing else. Finally, there is only one exchange with USD from top-10!
Of course, there are well-known Kraken, Bitstamp, GDAX, etc. with fiat trading pairs, but we will touch upon that a bit later.
- Bank transfers from cryptocurrency exchanges can turn into a big problem
All funds from exchanges are paid via bank transfer, so your bank needs to be friendly to incoming transfers from cryptocurrency exchanges, as such payments are often most often «red flagged» in terms of compliance and AML policy. Hence, before actually getting the chance to use your money, you first should find a friendly bank, then wait a certain time to withdraw the money (which normally takes up to 3-5 days) and finally pay all due taxes. Is this an easy day way to get cash money for your daily groceries or gas? Not likely, especially for small amounts.
- How about Localbitcoins and other p2p services? Neither fast, nor flexible
Primary issues of Localbitcoins and other p2p services has to do with the following:
- A) You need to wait up to 1 hour (or even more!) for receiving a fiat payment
- B) The payment method can often be inconvenient: by gift cards or bank transfer
- C) You need to accept the price from listed orders (which can be lower than the market price at global exchanges) or set your own price and then wait even more!
Sure thing Localbitcoins is a legendary service for bitcoin buy and sell, but it definitelyfalls out of category ‘fast and comfortable’.
So, what is the solution for a quick and easy cash out?
This solution was founded unexpectedly, and it is actually a bundle of rights of the exchange balance requirements (vouchers or codes) and systems of traditional electronic money. Seems too complex? Let me explain.
Imagine that there is an exchange where you can sell your bitcoins and other major cryptos for USD that at the same time allows you to transfer any amount of USD to another account inside this exchange in one click. So, another user can pay you via some payment method outside the exchange to receive a USD amount inside. This can be made by issuing a unique code (or a voucher), that transfers balance once it is activated. It basically works like this:
Who can be interested in buying USD inside crypto exchange? Individuals, who need to purchase crypto as well digital internet exchanges that work with the variety of e-money systems, big banks, cryptocurrency and even gift cards. They are buying USD «on balance» to buy crypto for their business or to sell «USD on balance» to their customers who need to «deposit» money to the exchange. By doing so they directly connect to money flows from the customers who are cashing-out and customers entering the crypto space.
How to find crypto exchanges that support vouchers (codes) and digital internet exchanges?
First of all, it is necessary to carefully select an exchange to work with. There are several exchanges that have a code (voucher) system: EXMO (exmo.me), WEX (wex.nz) and Btc-Alpha (btc-alpha.com). Let’s examine only the two first as a code of third isn’t liquid.
EXMO has an excellent user interface and allows to sell a variety of major crypto for USD. Code for transfer can be issued instantly at the user personal account:
The exchange has been operating stable since 2013 and is continually improving both on tech and customer service side.
WEX is a former btc-e.com exchange. It used to be a legendary exchange created in 2011 and closed by the US authorities in mid-2017 in connection with the charge of money laundering. A considerable amount of money was lost by traders back then. The interface of WEX is quite similar to the 2011 version:
This exchange also allows withdrawal of USD via codes. If compared, EXMO probably looks more attractive due to a stronger long term reputation and an extensive coin list.
After the code creation is done, there comes the final stage – finding an internet exchange and opportunity to receive the payment from there in comfort mode. It can be done via different exchange integrators, for instance bestchange.net. The likes of Bestchange help to find the best exchange rates from one currency to another, for example to sell EXMO USD for Payeer USD:
According to these rates, you will not lose any money on withdrawal commission, and even earn +1% profit while selling the code to fiat money.
Why using e-money payment systems is comfortable?
Many years of experience have proved that e-money systems are the best choice for small and medium amounts of transfers not exceeding USD 10, 000. The operation is scaled down to money transfers inside the e-payment service, so it can be done instantly and looks like more like an ordinary money transfer from one account to another. It is fast and not «long history» as with wire transfers.
The most popular and probably the best electronic money services are Payeer and Advcash, as well as local brands, for example in Russia and CIS there are two that are trending now - QIWI and Yandex.Money. One essential advantage is that in such systems there can be issued an account-bonded plastic card, so after the payment is received, the money can be immediately spent in shops, etc., etc.
There is a great way for a fast and safe crypto cash out by virtue of exchanges with a voucher-issuing system in a bundle with e-money systems and digital internet exchanges. This approach operates on the principle of two isolated vessels serving both for cash out and entering crypto. Basically, there are two exchanges that provide the codes that are liquid on a market and can be quickly sold via one of the e-money system payment.
Have your own idea on easy crypto cash out? Leave your comment here!
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