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The launch of Proshares and Valkyrie Bitcoin ETF and Novi Wallet is not a major solution in connecting cryptocurrency to traditional markets. Retail crypto investors still have a difficult time crossing the crypto-fiat barrier. The reasons are numerous.

For crypto recognize among legitimate financial assets, it took more than 12 years and a market capital of $2.5 trillion. The ProShares Bitcoin Strategy ETF launch trading on the NYSE in October. The Valkyrie ETF add to the Nasdaq portfolio on October 22. This puts Bitcoin on par to other assets that trade in ETFs like gold and the S&P 500.

ETFs can be a legal way to gain legitimacy in financial markets. However, being legal money is another. Unless it is easy to convert crypto to fiat, it will be too niche for retail investors. You can see the progress of some ongoing initiatives (from FinTap Exscudo and Facebook’s Novi) to see how crypto is getting closer to the mainstream.

Why Novi Wallet Not a solution for Fiat-Crypto Issue

Few blockchain projects are as anticipated or discussed as the Facebook-backed Diem (formerly Libra). Once it’s launched, it will allow Facebook Messenger, Whatsapp, and Messenger users to make in app cryptocurrency payments.

It has huge implications. There are more than 3 billion Facebook users. Only 10% of these people will use crypto to pay and transfer money. Crypto adoption will explode.

After many regulatory hurdles and a long wait, the Novi wallet launch is not a major solution as a pilot program in the US, Guatemala, and other countries on October 19, 2021. Novi is not the wallet for you if you expect a full-scale wallet with Diem support and new stablecoins.

Paxos Dollar Not Qualify as a Stablecoin

First of all, Novi does not charge fees to send money online. Also, the transaction process quickly. Also, it should be easy to convert crypto on Novi to local fiat currencies. This can be done either in cash or by bank transfer. With a credit card or debit card, the wallet can charge USDP.

Read Also: Survey Says That 90% of American Citizen Have Little Knowledge About Crypto Investing

However, Novi can only support one cryptocurrency, namely Paxos Dollars or PAX (an ERC-20 token issued by Paxos). The Diem blockchain will use to move it to, although the long-awaited native stablecoin has not yet been approved by regulatory authorities. BTC and ETH are not planned to be supported. It is also not possible to send USDP to Novi using other crypto wallets such as MetaMask and Jaxx or Bread, Abra, or any other cryptocurrencies.

It is unclear also how Novi will calculate and spread the exchange rate. Also, when Novi will set up a fiat line to convert USDP in cash, particularly in Guatemala, it is not clear.

Novi emphasizes that Novi wallet is not a solution is “just getting started”, but in its current form, it is a single currency wallet on blockchain. It is therefore limited in usage for most crypto-holders.

PayPal and Neteller paved the way for the cryptocurrency/e-money platform

PayPal already allows users to pay using BTC

In October 2020, PayPal announced Bitcoin payment support. Few people could have imagined the speed at which it would grow. First, users can only buy and store Bitcoins in the US through their PayPal account. It is not possible to withdraw BTC from an external wallet.

PayPal also made it possible to make payments using BTC, ETH or LTC in March 2021 via the ‘Checkout with Crypto’ feature. Merchants now have the ability to accept crypto payments. If they don’t, the app immediately converts crypto in the user’s account to fiat. Then, it completes the purchase.

In May, a PayPal executive announced that they plan to allow crypto withdrawals from third-party wallets. In August 2021, the company began offering crypto support to the UK.

Neteller, another popular online wallet, launched a crypto wallet in the context of a larger preparing digital ruble prototype payments platform. Users from 10 countries now have the ability to convert fiat to cryptocurrency and vice versa. Additionally, users can send funds directly to a crypto wallet address using their fiat balance – something that isn’t possible with PayPal.

Neteller has so far supported 38 cryptocurrencies. This is less than FinTap and still impressive when you consider that PayPal only supports four. Forty-eight fiat currencies also support.

Conclusion: Which path is best for mass adoption?

While mass adoption of crypto isn’t yet possible, it is moving closer. The best way forward is to add crypto support to fiat-based payment systems (e.g. PayPal, Revolut and Neteller). This makes it possible to convert between crypto- and fiat in blockchain wallets. It also offers multiple payment options for fiat customers (such as SEPA, PayPal in FinTap).

This is a great way to encourage users to start using crypto.

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