Direct cash-out features in crypto wallets are streamlining the process of moving money to a linked bank or mobile money account, making the crypto ecosystem more financially accessible.
Sector analysts say that the lack of that option has long inhibited the uptake of cryptocurrencies in a society that heavily relies on traditional fiat currencies to pay for goods and services.
Crypto wallet cash-out features provide a necessary bridge between the digital asset ecosystem and the traditional financial world, allowing users to convert their cryptocurrency into usable fiat currency.
"Before crypto wallet firms began introducing direct cash-out features in wallets, the transfer of funds to users’ bank or mobile money accounts would take days due to standard banking system clearing cycles,'' said Leo Mwaikwasi, a crypto analyst and Head of IT at Rear Africa Limited.
According to him, the process of converting crypto into fiat currencies also involved multiple fees, including network gas fees and exchange processing fees that significantly reduced the final amount of fiat received by the user.
Today, however, Mwaikwasi observes that by combining storage, sending, receiving, and trading options, wallets that offer integrated cash-out functions are providing one-stop-shop experiences that are helping to enhance the overall user experience.
"International transactions and remittances have become faster, cheaper, and more secure when done through crypto wallets compared to when they were done through traditional intermediary platforms."
In economies such as Kenya, where mobile money usage is widespread, cash-out features on crypto wallets are today helping to transform a speculative digital asset into a practical, spendable form of money.
"Wallets such as the Sorted Wallet app, which enable people with entry-level feature phones and old Android devices to transact using crypto, have incorporated features permitting their users to convert and deposit cryptocurrency as cash directly into their M-Pesa accounts," said Mwaikwasi.
In a future involving the use of both crypto and fiat currencies, innovations such as these will not only play a crucial role in creating linkages between digital and traditional finance but also enhance access to financial services for underserved communities.
However, for their impact to be felt extensively, Shishir Gupta, managing director of Sorted Wallet, says that there will be a need for the government to develop regulatory frameworks that do not restrict, but rather enhance innovation while guaranteeing consumer protection.
In addition, he observes that integrating digital finance and crypto modules into national literacy programs could help ease users into the crypto ecosystem gradually, enlightening them on how to transact securely.
“Financial institutions can also boost the usage of cryptocurrencies as units of transaction by embracing payment gateways such as crypto wallets that incorporate both fiat and cryptocurrencies,” said Shishir.
