Fiat On-Ramp

The gateway connects to traditional financial rails to accept user funds. Core integrations include:

• Bank Transfers (ACH/SEPA): For lower fees on larger amounts.
• Credit/Debit Cards: For instant purchases, though often with higher fees.
• Digital Wallets: Like Apple Pay or Google Pay for mobile-first users.
• Open Banking APIs: For secure, direct bank account linking without card networks. The breadth of options directly impacts accessibility and conversion rates.

A mandatory layer for regulatory adherence, involving Identity Verification and transaction monitoring.

• Tiered Verification: Basic email checks for small limits, escalating to document (ID, passport) and liveness checks for higher limits.
• Automated Screening: Checks against sanctions lists and politically exposed persons (PEP) databases.
• Transaction Monitoring: For suspicious activity patterns. This process balances user friction with legal requirements and is non-negotiable for licensed providers.

Defines which cryptocurrencies and blockchains users can access. A robust on-ramp offers:

• Multiple Assets: Beyond just Bitcoin and Ethereum to include stablecoins (USDC, USDT) and major altcoins.
• Cross-Chain Delivery: The ability to purchase an asset and have it sent directly to a wallet on a specific network (e.g., buying USDC on Arbitrum or Polygon).
• Dynamic Listing: The capability to add new tokens and networks based on demand and liquidity.

The total cost to the user, typically composed of several layers:

• Spread/Markup: The difference between the market rate and the offered purchase price.
• Network Fees: The cost of the blockchain transaction, often estimated and included.
• Processing Fees: Charges from payment providers (e.g., card networks). Transparent providers display a full cost breakdown before purchase, showing the exchange rate, all fees, and the final crypto amount received.

The step-by-step process from landing page to crypto in wallet. An optimized flow minimizes abandonment and includes:

• Quote & Review: A clear, upfront summary of rates, fees, and destination.
• Minimal Steps: Reducing clicks between selection, verification, payment, and confirmation.
• Wallet Integration: Options like WalletConnect or deep linking to popular self-custody wallets (MetaMask, Phantom) for seamless address input.
• Status Tracking: Real-time updates on order processing, KYC, and blockchain settlement.

Defines how and when the user receives their assets. The two primary models are:

• Direct-to-Wallet (Non-Custodial): Crypto is sent directly to a user-provided external wallet address. The on-ramp never holds the user's assets, aligning with self-custody principles.
• Account-Based (Custodial): Funds are credited to a user account within the on-ramp's platform (like an exchange). The user must then withdraw to their private wallet. This model often allows faster initial funding but introduces counterparty risk.

A fiat on-ramp facilitates the exchange of fiat currency (USD, EUR, etc.) for cryptocurrency (BTC, ETH, stablecoins). The process typically involves:

• User Verification (KYC): Identity checks to comply with regulations.
• Payment Processing: Accepting credit/debit cards, bank transfers (ACH, SEPA), or mobile payments.
• Asset Conversion: Executing the trade at a quoted exchange rate, often via a liquidity provider.
• Wallet Delivery: Depositing the purchased crypto directly into a user's specified wallet address or custodial account.

On-ramps are integrated into applications through several technical models:

• Embedded Widgets: Pre-built UI components (like those from MoonPay or Transak) that handle the entire flow within a dApp.
• API-Based: Direct API calls for programmatic purchase initiation and status checks, offering more customization.
• Direct Exchange Partnerships: Platforms integrate with centralized exchanges (e.g., Coinbase, Binance) to leverage their existing fiat rails.
• Self-Custody Focused: Services like Mt Pelerin or Ramp Network that prioritize sending assets directly to a user's non-custodial wallet.

Major providers dominate the on-ramp landscape, each with distinct features:

• MoonPay: Known for widespread dApp integration and support for numerous payment methods.
• Transak: Offers a strong regulatory framework with licenses in multiple jurisdictions.
• Ramp Network: Emphasizes speed and a developer-friendly API, with direct-to-wallet delivery.
• Stripe Crypto: Re-entered the market focusing on streamlined KYC and fraud prevention for businesses.
• Coinbase Commerce / Binance Connect: Allow users to buy crypto using their exchange accounts directly on partner sites.

Behind the simple interface are complex systems:

• Compliance (AML/KYC): Automated identity verification and transaction monitoring to meet global Financial Action Task Force (FATF) standards.
• Fraud Prevention: Systems to detect and block fraudulent card payments or stolen credentials.
• Liquidity Aggregation: Providers often aggregate rates from multiple exchanges to offer competitive pricing.
• Gas Management: For Layer 1 and Layer 2 networks, some on-ramps handle gas fee estimation and payment to ensure the transaction is broadcast successfully.

Fiat on-ramps are the entry point for critical activities:

• dApp User Acquisition: Enables users to fund wallets to interact with DeFi protocols, NFT marketplaces, and GameFi applications.
• Stablecoin Minting: A primary method for users to acquire stablecoins like USDC or USDT directly.
• Cross-Border Payments: Facilitates faster, cheaper international value transfer by converting local fiat to a global crypto asset.
• Recurring Purchases (DCA): APIs enable developers to build automated dollar-cost averaging features for end-users.

Integrators and users face several hurdles:

• Regulatory Fragmentation: Varying laws by country affect available payment methods, supported assets, and KYC strictness.
• High Fees: Costs can include processing fees (2-4%), network fees, and spread, making small purchases inefficient.
• User Experience Friction: KYC steps and bank transfer delays can create drop-off points in the conversion funnel.
• Geographic Restrictions: Many services are unavailable in specific regions due to licensing or banking partnership limitations.

Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures are mandatory for regulated on-ramps. This involves collecting and verifying user identity documents (e.g., government ID, proof of address) to prevent illicit activities. Non-compliance can result in severe penalties, license revocation, and exclusion from the traditional banking system. Most major exchanges (e.g., Coinbase, Kraken) enforce strict, multi-tiered KYC checks based on transaction volume.

Operating a fiat on-ramp requires specific financial licenses that vary by jurisdiction. In the US, providers typically need Money Transmitter Licenses (MTLs) from each state and may register with FinCEN as a Money Services Business (MSB). In other regions, licenses like the EU's MiCA (Markets in Crypto-Assets) framework dictate operational standards. Operating without proper licensure is a primary vector for regulatory enforcement actions and shutdowns.

On-ramps depend on relationships with traditional banks to process fiat deposits and withdrawals. These banking partners conduct their own due diligence and can terminate services if they perceive compliance or reputational risk, a phenomenon known as de-risking. This creates a single point of failure; loss of banking access can cripple or shut down an on-ramp service overnight, regardless of its own operational status.

On-ramps must implement systems to monitor transactions for suspicious patterns indicative of fraud, money laundering, or sanctions evasion. This includes:

• Automated Surveillance: Flagging unusual deposit sizes or frequencies.
• Sanctions Screening: Checking users and transactions against global watchlists (OFAC, UN).
• Suspicious Activity Reports (SARs): Mandatory filing with authorities for flagged transactions, often at thresholds like $2,000 in the US.

Handling sensitive user financial data (bank details, IDs) and temporarily holding fiat currency creates significant security obligations. Key measures include:

• SOC 2 Type II Compliance: Audited standards for data security and availability.
• Encryption: End-to-end encryption for data in transit and at rest.
• Segregated Accounts: Customer fiat funds are often held in separate, insured bank accounts to protect against platform insolvency.

On-ramps must enforce geographic blocking based on IP addresses and verified residency. They are legally required to deny service to users in:

• Sanctioned Jurisdictions: Countries subject to comprehensive embargoes (e.g., Iran, North Korea, Cuba).
• High-Risk Jurisdictions: Regions identified by the FATF as having weak AML frameworks.
• Restricted States/Provinces: Areas where local regulations prohibit service (e.g., certain US states). Non-enforcement can lead to severe sanctions violations.

The reverse process of a fiat on-ramp, allowing users to convert cryptocurrency back into fiat currency and withdraw it to a traditional bank account or card. This is a critical component for the full financial lifecycle in crypto.

• Key Services: Sell orders on exchanges, direct bank transfers from custodial wallets, crypto debit cards.
• Compliance: Often involves more stringent KYC/AML checks than on-ramping due to anti-money laundering regulations.

A mandatory regulatory process where a service verifies the identity of its clients. It is a foundational requirement for licensed fiat on-ramp providers.

• Purpose: Prevents identity theft, financial fraud, and money laundering.
• Process: Typically involves submitting government-issued ID, proof of address, and sometimes a live photo or video.
• Impact: Creates a compliance barrier between fully decentralized protocols and regulated fiat gateways.

A service that handles the technical and financial logistics of transferring money. In crypto on-ramps, they facilitate the fiat side of the transaction.

• Function: Authorizes and settles credit/debit card payments, bank transfers (ACH, SEPA), and alternative payment methods like Apple Pay.
• Examples: Stripe, Checkout.com, Sardine. They manage fraud screening, currency conversion, and settlement to the crypto provider.

A fundamental distinction in how user assets are managed, which directly affects on-ramp design.

• Custodial On-Ramp: User funds are held by the service (e.g., Coinbase, Binance). The on-ramp deposits crypto directly into the user's exchange wallet. Simpler for users, but they cede control.
• Non-Custodial On-Ramp: The service facilitates the purchase but sends the crypto directly to a wallet the user controls (e.g., MetaMask). Uses smart contracts and requires user to provide a destination address. Aligns with self-custody principles.

A cryptocurrency whose value is pegged to a stable asset, like the US Dollar. Stablecoins are often the immediate output of a fiat on-ramp transaction.

• Role in On-Ramping: Users often buy USDC or USDT first, as they are liquid and minimize price volatility before swapping to other assets.
• Types: Fiat-collateralized (e.g., USDC), crypto-collateralized (e.g., DAI), and algorithmic.

A peer-to-peer marketplace where transactions occur directly between user wallets via smart contracts. While not fiat on-ramps themselves, they are the primary destination for assets purchased via on-ramps.

• Connection to On-Ramps: A common user journey is: Fiat On-Ramp → Stablecoin in self-custody wallet → DEX swap for another token.
• Examples: Uniswap, Curve, PancakeSwap. They provide the liquidity pools for converting on-ramped stablecoins into any other ERC-20 or BEP-20 token.