WalletDeveloping a crypto wallet from scratch is a complex and expensive undertaking. It requires a team of developers with in-depth knowledge of Web 3 technologies. And it has to have strict security measures, thorough optimization, and intuitive design.
These things are expensive and time-consuming to make. So many companies willing to develop cryptocurrency-related software turn to wallets-as-a-service (WaaS). This allows them to integrate a ready-made solution quickly and give their customers a reliable product. In this article, we will focus on how WaaS enables businesses to participate in the crypto economy.
Role of WaaS in financial market
Analysts estimate the crypto technology market at $7.4B and expect it to grow by a massive 66% per year. WaaS companies make a significant impact on both figures.
Firstly, they help companies join the cryptocurrency domain. Wallets-as-a-service cover crucial aspects like storing and trading assets. They also include various helpful additions: exchange rates, gasless transfers, commission estimation, and more.
They do it at a fraction of the price it would cost to develop everything from the ground up. This allows cash-strapped startups to expand their offering while redirecting the money towards other things, e.g. marketing and customer support.
Secondly, WaaS enables digital payment and transactions. Finance is a heavily regulated niche and for good reason. But this also means that the entry barrier is high, often impossible to vault over for the companies just starting.
Wallets-as-a-service vendors often take responsibility for compliance, cybersecurity, KYC/KYT, and other important matters. It makes the domain more accessible.
Thirdly, they help overcome geographical barriers. Transferring fiat money from one country to the next can incur a lot of extra commissions and taxes. They don’t apply to cryptocurrencies in many cases. So using a well-made digital wallet could save people lots of money.
Addressing challenges for mass Wallet-as-a-service adoption
Despite their advantages, there are still obstacles that hamper the more widespread expansion of WaaS.
- Infrastructure and connectivity considerations. One of the main drawbacks of blockchain technology as a whole is its relatively slow performance. This becomes even worse in areas where internet access is low-speed or nonexistent.
Users in such places won’t be able to gain value from advanced digital wallets. So companies working with them wouldn’t want to adopt WaaS.
- User education. After high-profile crypto crashes like Terra/Luna and FTX, many people are even more cautious regarding anything that has to do with digital assets. WaaS providers can alleviate this by showing that the market has rebounded and that there are legitimate services that facilitate trading and investment.
- Regulatory frameworks and compliance. USA, China, Canada, and many other countries are building regulation that governs cryptocurrency. However, even in the most advanced countries, the legal aspects are still at a relatively early stage. The uncertainty prevents wider WaaS adoption, as people are unsure whether many of them will be able to survive the new laws.
Conclusion
Wallet-as-a-service companies help other businesses release crypto wallets quicker and with lower initial investment. Moreover, they help with the most complicated matters like compliance and security and help move financial assets with less hassle and overhead expenses. Overall, WaaS is a major contributor to financial accessibility.
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