The Importance of Bringing Fiat Currency Integration to NFTs
The total market capitalization of all cryptocurrencies recently surpassed two trillion dollars for the first time, a significant milestone, yet still a drop in the bucket of the entire global monetary base. A substantial portion of the world’s assets is tied up in fiat currencies, around $215 trillion according to some sources, and for cryptographic assets like NFTs to gain significant mainstream acceptance, they need to be accessible to a broader portion of the population.
Money Is Waiting on The Sideline
Following Christie’s now famous sale of Beeple’s most sought-after NFT for almost $70 million, NFTs were really put on the map for the first time, but they are still largely inaccessible to many. NFTs are tradable with cryptocurrencies, especially their native platform currencies like ETH or BNB, but not much else. There is a lot of wealth flowing through the blockchain industry, but there are various technical, financial, and security-based barriers that are keeping traditional investors and speculators on the sideline. By introducing a fiat currency onramp to NFT platforms, this new asset class will become much more accessible to the conventional investor class.
As of 2018, the global physical art market was valued at a whopping $69 billion, with fiat currencies accounting for virtually all of the transactions. Many are beginning to see NFTs as the next logical step for the art and collectibles market, and we as an industry need to introduce fiat currencies options so these investors can more easily get involved.
No Current Options
Although the need for fiat integration seems rather evident, hardly any NFT platforms have introduced them as payment methods. Nifty Gateways, a popular centralized NFT platform, has granted partial fiat integration in collaboration with an auction it is holding alongside Christie’s, but it is limited to buyers who are spending over $100,000 or more. That may allow some of the higher-end art market to get involved, but it essentially leaves out any everyday collector, investor, or speculator looking to make a purchase without having a relatively in-depth understanding of cryptocurrencies.
Most NFT platforms are built using Ethereum, with some built on Binance Smart Chain or other lesser adopted smart contract platforms, which is usually the only currency option they host. Integrating fiat payment options would make NFTs accessible to regular buyers regardless of the chain that hosted them.
One only has to look as far as the success seen by NBA Top Shot, the licensed digital trading card game created by Dapper Labs and the NBA. They are fully fiat integrated, with many customers having no idea that their assets are NFTs or how the digital infrastructure works; they just know that their cards are verifiably scarce. NBA Top Shot has generated over $500 million in revenue, showing the major cash inflows that fiat integration allows.
Two sold out digital pack options users can open to find collectible NFT cards from their favorite players (nbatopshot.com)
NFTrade will be focusing on implementing fiat integration, as stated on our roadmap, offering users the ability to purchase NFTs using a credit or debit card in their native currency. This simplified process will enable almost anyone to get involved, mitigating the intricacies of dealing with MetaMask and other technical functions. For mainstream market penetration, a fiat gateway is necessary, as it brings with it a whole new market of potential users.