The Future of Open and Accessible Crypto/Fiat Currency Liquidity Exchange Platforms
Our vision is to curate a crypto liquidity exchange community that crypto enthusiasts, international businesses, and institutional investors can use to transfer cross border payments, exchanging crypto currency for fiat currency and withdraw or distribute balances easily and quickly via a robust payment mechanism.
FILLING A MARKET GAP
The fragmented nature of the current digital financial landscape has created an extremely high barrier to entry for mainstream users as well as a lack of options for companies with digital asset reserves to plug into practical financial services. We believe that we are on the cusp of an acceleration of traditional financial services being moved onto blockchain enabled fintech solutions.
There are several reasons why the options within current crypto exchange sites are insufficient for Crypto Swap’s focused user base. Our users demand higher limits in transaction flows and a one stop solution to the ever-increasing restrictions on international transfers in a safe and efficient manner. Current regulatory fear as well as the increase costs in compliance and reporting requirements, the required increase in personnel and oversight, and vetting constraints with almost all crypto exchanges in the current market have created an environment that resists the large value user. It can be uncomfortable and often even impossible for users to withdraw, via wire transfer, sums over the $10,000 USD (or equivalent) to most destinations globally.
These regulations are an excellent tool in the fight against terrorist financing and money laundering but also pose serious restrictions for the legitimate user. Considering all the shortfalls of the current market, Crypto Swap was created to meet the users’ need for more diverse, high value, financial services by providing a growing number of users, a globally compliant KYC/AML vetting process which will accelerating blockchain adoption and support the institutionalizing of the blockchain/conventional financial space.
The uses for the Crypto Swap exchange will reach individuals, industries, and sectors globally. It provides a clear and easy way to reach payment recipients, suppliers and distributors, or sellers, buyers and investors, quickly through its major crypto currency and fiat currency on-board and off-board ability.
GLOBAL (CROSS-BORDER) PAYMENTS
THE PROBLEM WITH CROSS-BORDER PAYMENTS
Analyzing the findings of SWIFT (Society for Worldwide Interbank Financial Telecommunication), the four biggest problems with cross-border payments are: visibility, certainty, cost, and consistency. More specifically, 40 to 50% of respondents had problems with:
- Tracking payments
- Inconsistent processes and regulations
- Unpredictable total costs
- Inconsistency between the amount sent and the amount received
- A lack of information about the payments sent and received
- Knowing when payments would be credited
WHY DO THESE PROBLEMS PURSIST IN 2019?
Because global payments are made across the correspondent banking network: a loose group of over 10,000 senders, intermediary, and receiving banks that follows the SWIFT messaging protocol. As the following diagram shows, this process is difficult to navigate because of the huge number of parties involved in getting a payment from point A to B.
This vast web of connected banks creates complications which cost companies both time and money. Each point within in this network is a business and charges a fee for their service. And with so many points of failure, communication errors are inevitable.
If your company is large enough, you can employ specialists to manage this complicated relationship between your global customers, your global suppliers, and all the banks involved in sending a cross-border payment from point A to B. If your business isn’t large enough to eat these expenses, you must resign yourself to not having access to global payments without high costs.
WHAT ABOUT FINTECH’S?
Non-bank payment providers like Earthport, WorldPay, and Western Union Business Solutions have attempted to bypass the correspondent banking network. They have established local bank accounts capable of accessing local banking networks and facilitating cross-border payments in popular county corridors.
However, given the regulatory scrutiny, cost and operational overhead of opening and maintaining these bank accounts, the actual reach of these companies will always be limited. Even with hundreds of bank accounts, no one non-bank payment provider will be truly global.
FinTechs (Financial Technology Companies) like PayPal, TransferWise, and Veem layer better customer experience, increased price transparency, and modern technology on top of a mix of their own local bank accounts and the traditional correspondent banking network.
Non-bank payment providers and FinTechs can improve some of the issues that the correspondent banking network creates but are unable to solve its core problems.
ARE BLOCKCHAIN INITIATED PAYMENTS THE SOLUTION?
Blockchain initiated payments solve all the pain points that SWIFT itself recognizes with global payments. The technology provides:
- Transparent tracking of payments sent and received
- A consistent process that cannot be arbitrarily changed
- Upfront and transparent costs of sending payments
- Exact amounts sent and received
- Payment confirmation in less than an hour
In short, it is already challenging the “old” way of moving money across borders. However, there are two problems for businesses wanting to use blockchain payments.
First, the price of cryptocurrencies like Bitcoin is volatile. As a result, it is easy for company A to send company B exactly one bitcoin, but the value of that one bitcoin is likely to change. Second, because of its price volatility and how it is regulated and taxed, your financial team may have concerns using it.
CRYPTO SWAP BLOCKCHAIN INITIATED PAYMENTS AS THE SOLUTION
This is where Crypto Swap comes in. The Crypto Swap platform removes price volatility and the need to handle cryptocurrency from the equation. This means the individuals and businesses that require cross border payments never need to touch or manage any crypto currency unless they want to. Crypto Swap will also allow businesses to receive settlement in a variety of traditional currencies and one stablecoin, Tether (USDT), at a guaranteed exchange rate and delivered to their bank account within two business days.
This is all for a simple fee. No foreign exchange spreads (when trading crypto to fiat), no subscription fees, no other payment fees of any kind. Just the one simple fee.
WHY USE CRYPTO SWAP?
The four key uses for the Crypto Swap exchange platform are:
- The liquidation of crypto currency assets, easily, into a usable fiat currency; Crypto Swap facilitates the flow of funds derived through crypto currency liquidity to allow the reintegration of funds into the international financial marketplace.
- The ability to accept commercial grade crypto currencies for the business owner from their target market users.
- The ability to trade currency/crypto pairs for profit, (see currency/crypto pairs later in this document).
- Facilitate the purchase of crypto currencies via several on-boarding techniques including, wire transfers, SEPA transfers, CHAPS, SWIFT, Interact, and high value credit card transactions.
The use of Crypto Swap as a trusted custodian of crypto currencies, allowing for the immediate access to exchange functions that can allow users to take advantage of real time fulfillment of exchange orders.
Crypto Swap B2B, B2C, C2B and C2C payments are also ideal for users that:
- Need to receive international payments of any size, from less than $1000 to over $10,000,000.
- Want to expand into hard-to-reach regions.
- Want to sell products and services to the global crypto economy (exchanges, wallet providers, hosting services, mining equipment manufacturers, gaming businesses, etc.).
- Want to pay their traditional supplier base with crypto earned as revenue.
- Want to expatriate funds from their subsidiary’s sales in low liquidity countries to their regional corporate headquarters.
- Are in the global south and want an alternative to the high costs of sending payments to western suppliers.
International payments are complicated, messy, and costly for businesses. Blockchain payments solve that and Crypto Swap eliminates the risk of price limits, volatility and any regulatory uncertainty.
LARGER, BETTER, FASTER, CHEAPER, AND FULLY COMPLIANT WITH REGULATORS
There is no limit to the value of the transaction which can be completed on the Crypto Swap platform (level 5 access required), which makes a marked difference from the current state of the heavily restricted global funds transfer market for any transaction that exceeds $10,000. Although feasible from a security and regulatory standpoint, this restrictive transfer limit is by far the biggest factor in deterring international companies and high net worth individuals from entering the crypto market.
Crypto Swap is poised to solve this issue and facilitate crypto/fiat transfers for cross border companies and high net worth individuals. Crypto Swap’s parent company, General Dynamicx Incorporated, is registered with the Canadian Financial Regulatory Authority and fully compliant with domestic and international KYC/AML (Know Your Customer/ Anti Money Laundering) laws.
A robust KYC/AML compliance framework allows registered users to undergo a single intensive vetting process that includes several industry norms as well as a few bespoke GEO IPV6 location protocols and Live Person video interactions. An additional ongoing monitoring and reporting mechanism is also in place for continued scrutiny and safety of all transfers. The result is a simplified yet secure process that allows client to conduct transactions within the guidelines placed on limits and destinations of funds distribution.
CREDIT CARD ON-BOARDING
Users of the Crypto Swap exchange platform will be able to conduct crypto currency purchases with a credit card – something nearly impossible to date. Currently, the option to purchase significant value Crypto with a credit card is difficult to find and expensive. The process is further exacerbated by the issue of transferring the crypto into a fiat currency- something further compounded by the limits on transfers of over $10k. Currently, there is no direct and efficient way for consumers to use crypto currencies for their intended purpose – as a digital currency – without going through exchanges, conversions and huge ATM or debit card fees.
MOBILITY FOR CRYPTO SWAP USERS
Crypto Swap has developed a single all-purpose mobile application for both iPhone and Android devices. The biggest advantage of the Crypto Swap mobile app is the convenience registered users will enjoy when conducting all the onsite functions of the liquidity exchange on their mobile devices. The core features for this application allow ease of use for the user in a smart phone configuration and is essential for the user in our target space. The Crypto Swap mobile app features are well poised to provide services expected in today’s environment. Services include; the convenience of use as you check the balance in the account or transfer money, mobile cryptocurrency wallets, and the buy/sell/trade proposition included in the full desktop version of CryptoSwap.com are all included in the Crypto Swap Mobile Application.
INTIGRATED LOYALITY PROGRAMS AND AFFILIATE MARKETING
Crypto Swap has also integrated a loyalty and reward program, as well as an extensive affiliate marketing system that incentivizes registered users to bring in new clients.
COMPETITOR AND INDUSTRY LANDSCAPE
Despite the proliferation of crypto currency exchanges, there are no direct competitors in this space. Therefore, the advantage and challenges of a first mover will affect Crypto Swap’s strategy and operations.
With the issue of the transition to decentralized payment networks being more pressing than ever, there are already several solutions for blockchain payment providers: Bitpay, Coinbase, TenX, Wirex are just a few of the apps and platforms aiming to be the next ‘crypto’ Visa or MasterCard. Despite their pioneering services and ambitious goals, none of them offer a complete comprehensive solution for providing such a robust and far reaching structure of receiving, distribution or managing crypto currency and fiat currencies, alongside the value limits we offer.
SIMILAR BUT NOT THE SAME
BitPay can be seen as a distant competitor in this sector, although its functionality is not as comprehensive as that of Crypto Swap, and it lacks large value transaction capacity. However, it is the leading crypto currency exchange platform due to the first mover advantage within the brick and mortar crypto to fiat landscape.
BitPay facilitates cross border blockchain payments which can be withdrawn in several countries and Fiat currencies but in limited amounts.
Namely, BitPay allows for the purchase of Bitcoins with certain fiat currencies: USD, EUR, AUD, CAD, MXN, NZD, SER, SEK, and GBP. Funds can be transferred on a global level on a scalable service allocation. The highest volume per transfer is advertised at < $10,000 USD.
BitPay currently occupies 3.72% of the crypto exchange market share based on the service that facilitates crypto to fiat conversion and the targeted distribution of that fiat – somewhat similar to Crypto Swap. They offer these services to brick and mortar business looking to accept crypto as a payment source, a factor well within Crypto Swap’s purview, but seriously limited with volume restrictions.
Datanyze.com lists the number of websites signed up to use BitPay as 263, with 823 websites having been added at its highest, and 693 dropped.
BitPay is joined in the crypto exchange industry facilitating similar services but non offering a complete solution to Crypto Swap’s target market, by the following exchanges:
TOP COMPETITORS WEBSITES MARKET SHARE
SEQUENCE 1,827 25.87
BLOCKCHAIN 1,316 18.63
COINHIVE 1,116 15.80
DASH 532 7.53
ETHERUM 486 6.88
COINBASE 280 3.96
BITCOIN 271 3.84
DEEPMINER 148 2.10
JSECOIN 120 1.70
COIN PAYMENTS 109 1.54
Source and exchange comparisons can be found at : https://www.datanyze.com/market-share/bc/bitpay-market-share
As there is a lack of any real Crypto Swap market competitors, comparison sites were set on the distribution of funds derived from the sale of crypto to fiat, followed by the transmittal of the fiat to their merchants’ bank accounts which facilitates the reintegration of funds back into the financial market. All in an effort to allow the individual and merchant user a spend ability not found in today’s marketplace.
In comparing BitPay to its largest competitor sequence, BitPay has not yet become a large market share competitor, but it has the closest functionality to Crypto Swap in terms of its ability to be used in a semi-mainstream environment.
BitPay was created in 2011 and did not enjoy the level of mainstream acceptance that Crypto Swap can gain in 2019. During their initial years, they lacked the current level of public awareness and understanding, and regulatory acceptance of the crypto currency of today.
The company has an annual revenue of $11 million with an estimated company value of $40 million. Among BitPay’s investors are household names, such as Aquiline Capital Partners, Menlo Ventures, and Delta-v Capital.
BitPay’s main competitors are other exchanges offering the same “limited value” proposition; Bitfinex, Coinify and BitGo. As of August 2019, BitPay has 17.1K fans on Facebook and 100.9K followers on Twitter.
Crypto Swap has an advantage in the modern blockchain environment; it is clear that we are poised to gain solid market share in the industry and attract customers through expanded products and services to generate above-market growth. Being the first in the crypto currency liquidity exchange market offers a comprehensive ability to trade multiple crypto coins into multiple Fiat currencies, with credit cards transactions using brands beyond the popular Visa, and significantly higher transaction limits.
Although BitPay allows for withdrawals in more currencies than Crypto Swap does, it only deals in Bitcoin and Visa, as opposed to the Crypto Swap platform, which will provide a venue for on-board 80% of the global crypto coin offerings, as well as most of the credit cards brands in use today.
Furthermore, BitPay does not allow transfers of over $10,000 to global destinations, effectively locking the wealth of its users.
The Crypto Swap team has considered several policies and procedures to streamline the exchange process, including USDT tethering in the short term, to ensure limited exposure to the fluctuating crypto currency markets. Also, Crypto Swap has implemented a consistent and reliable approach to reporting and recordkeeping regulations. These procedures far exceed any formally required KYC/AML compliance thresholds.
Crypto Swap is uniquely positioned to handle all the services outlined in this paper, and much more, in one place: a fast, user-friendly, fully licensed and compliant exchange. The Crypto Swap team has the necessary experience to realize this vision for a global platform that streamlines the free flow of funds between platform users, investors, businesses and the emerging digital asset economy.