Financial Institutions Under Pressure to Embrace Crypto
Financial institutions are increasingly compelled to incorporate cryptocurrency offerings into their core services rather than treating them as niche products. With an estimated 1 billion individuals expected to own digital assets by 2028, and a significant portion of global crypto activity anticipated to originate from emerging markets, Volodymyr Nosov, the CEO of WhiteBIT, shared insights on how businesses can effectively respond to this growing demand. He advocates for the adoption of Crypto-as-a-Service (CaaS), a model that enables companies to provide integrated crypto wallets, trading, conversion, and payment solutions directly within their existing platforms. Nosov explored the potential for both traditional financial institutions and digital-native firms to capitalize on this rising interest in crypto without the need to completely overhaul their infrastructure.
Rising Crypto Demand Shaping Consumer Behavior
WhiteBIT is founded on the premise that consumer behavior is evolving. With the increasing global acceptance of cryptocurrencies, individuals are seeking the ability to manage and transact with their digital assets conveniently and in real-time. A recent study revealed that 75% of cryptocurrency holders prefer to handle their assets through their familiar banking or fintech applications. This trend not only highlights a significant market opportunity but also exposes a service gap, particularly among financial institutions that depend on outdated infrastructure and traditional fiat systems. The challenge for fintech companies and electronic money institutions (EMIs) lies not in becoming outdated technologically, but in losing customers to platforms that provide more versatile asset management options, including digital currencies. Nosov remarked, “Most institutions aren’t aiming to become crypto exchanges; they simply want to offer digital assets securely, in a regulated manner, without the need for extensive technological overhauls or the financial burden of crypto regulations.”
Transitioning from Infrastructure Gaps to Integrated Services
Instead of constructing blockchain systems from the ground up, WhiteBIT suggests that institutions should consider embedding crypto wallets, trading, custody, and payment functionalities through modular APIs offered by infrastructure partners. This CaaS framework effectively addresses several challenges that have historically hindered institutional adoption, including navigating diverse regulations, ensuring access to robust liquidity pools, enforcing KYC/AML compliance, speeding up integration processes, and reducing time to market for new products. In practical terms, this approach allows banks and digital wallet providers to offer digital asset services swiftly and compliantly while delegating the complexities of backend operations and regulatory adherence.
Applications Across Banking, Fintech, and Telecommunications
WhiteBIT highlighted various client scenarios, such as a telecommunications company and a neobank. One client successfully integrated crypto trading into its mobile application to create new revenue streams, while another enabled users in developing regions to buy and sell crypto using USSD codes. The WhiteBIT ecosystem also includes the Whitepay crypto acquiring service, allowing users to conduct daily transactions with crypto at no additional cost. Whitepay provides crypto acquiring, next-day settlements, and lower transaction fees compared to conventional payment processors. Furthermore, WhiteBIT’s Nova card facilitates crypto payments by converting crypto to fiat, effectively serving both online businesses and consumer finance applications. These instances illustrate the growing integration of crypto into everyday financial activities, not just as an emerging asset class but as a vital tool for inclusion and customer retention, especially in areas lacking robust traditional banking services.
The Importance of Regulatory Compliance
Nosov underscored the significance of compliance in the CaaS model. He believes that the success of Crypto-as-a-Service hinges on alignment with regulatory standards. Providers in this sector must obtain licenses as Virtual Asset Service Providers (VASPs), conduct thorough Know Your Business (KYB) onboarding, and collaborate with third-party risk monitoring services to keep pace with evolving compliance requirements.
A Future Driven by Utility
The development of embedded crypto solutions aligns with a broader trend toward infrastructure as a service in the industry. This approach means that institutions are not required to build every product internally but must still offer digital assets to remain competitive in the future. As the market continues to evolve, financial service providers may find that the critical question is no longer whether they should offer cryptocurrencies but how to do so while maintaining compliance, security, and a positive user experience. “The inclusion of digital assets has become essential for everyone’s product strategy,” Nosov concluded. “It’s only a matter of time before someone successfully captivates a younger demographic and provides compelling reasons for existing customers to remain loyal in a profitable and sustainable manner.”
