Bridging the Gap between Fiat and Crypto: Why Web3 Cross-Border Payments Need Web2 Thinking: By Muhammad Qasim

Major financial institutions are beginning to integrate blockchain into real-world payment systems. Visa recently expanded its use of digital currencies for cross-border settlements, supporting faster transfers using public blockchain networks. JPMorgan
is already moving more than $2 billion in daily value through its internal blockchain platform, enabling automated payments between large institutions. These shifts show that blockchain is moving beyond theory and into production.

Web3 infrastructure has made significant technical progress, yet adoption for cross-border payments remains limited. The problem is not performance. Blockchain systems can settle transactions in seconds, maintain transparent audit trails, and remove many
inefficiencies found in traditional correspondent banking. The greater challenge lies in usability. For individuals, businesses, and financial operators, interacting with these systems often feels unfamiliar and insecure.

This disconnect stems from how most platforms are built. The focus has been on technical validation rather than aligning with user behavior or regulatory requirements. Without addressing these gaps, Web3 payments will remain a niche solution. A crypto-fiat
bridge must do more than move funds quickly. It must reflect the expectations of those who use it. Infrastructure must be secure, compliant, and easy to navigate for a diverse range of users.

This calls for applying principles that have already been proven in existing financial systems. Web3 tools should operate with the clarity, reliability, and user experience that people expect from the services they use every day. The goal is not to replace
how people manage money. The goal is to make digital assets compatible with how money already moves, how regulation already works, and how users already behave. This is where meaningful progress begins.

Aligning Infrastructure with Familiar Behaviors

Web3 tools were initially built for traders and developers. They assume users understand private keys, seed phrases, and gas fees. However, this onboarding approach has contributed to abandonment rates as high as 75 percent, particularly when users are asked
to manage seed phrases upfront. For most professionals and businesses, these assumptions create unnecessary barriers.

Improving accessibility begins with interface design that reflects how people currently handle financial transactions. Systems should include identity-based onboarding through document verification or phone authentication. Transaction details should appear
in local currency alongside token values. These features reduce friction and support user confidence.

The TON blockchain and Telegram Mini-Apps offer a working example. Users can send stablecoins in chat without navigating away from their messaging platform. In Asia, WeChat Pay and Alipay embed payments into everyday commercial activity. Binance Pay supports
QR-code payments in physical retail. These models show how crypto payments can integrate into familiar user flows.

In many markets, payments are already made within chat applications. Embedding payment flows within these environments enables users to complete transactions without switching contexts. This approach supports existing behavior instead of forcing users to
learn unfamiliar tools.

Platforms do not need to oversimplify. They need to provide clarity, reduce cognitive effort, and avoid exposing users to irrelevant technical detail. People should be able to transact securely without needing to understand the inner workings of the system.

Compliance as a Core System Design

In regulated markets, compliance defines what a platform can offer and how it must operate. It cannot be added after launch. It needs to be built into the system from the start.

Scalable systems require real-time identity verification, jurisdictional screening, and wallet-level risk assessment. These checks function best when delivered through backend services that do not interfere with the user interface. This design approach ensures
regulatory compliance without slowing the user experience.

Licensing frameworks such as MiCA in the EU, the National Bank of Georgia’s VASP regime, and Dubai’s Virtual Asset Regulatory Authority (VARA) model provide the regulatory clarity developers need. MiCA requires CASPs to meet capital thresholds, issue EMTs
and ARTs under defined rules, and implement AML procedures. The UK FCA requires e-money licenses and restricts cryptoasset marketing. Singapore’s MAS applies licensing to Digital Payment Tokens.

When compliance is built into the API layer, platforms can apply consistent enforcement across multiple jurisdictions. This enhances auditability, reduces manual work, and enables compliance and product teams to collaborate in sync. It also removes the false
trade-off between usability and regulation.

Practical compliance involves KYC tiering, such as basic, enhanced, and corporate verification. It includes the implementation of the Travel Rule using IVMS101 standards. Wallet risk scoring through TRM Labs or Chainalysis enables KYT. Cross-border reporting
and sanctions screening must be automated. At the bank level, platforms must address the source of funds and source of wealth verification with appropriate documentation.

Regulatory requirements are not obstacles. When treated as design inputs, they enable sustainable growth. Infrastructure that incorporates these requirements from the outset remains functional and compliant as laws evolve.

Supporting Business Use, Not Just Trading

Early Web3 infrastructure was designed primarily for trading. It focused on token exchanges, market speculation, and liquidity. These features primarily serve traders but offer little benefit to companies that move money across borders for real-world purposes.

Today, a broader group of users, including freelancers, service providers, and small businesses, relies on stablecoins and digital assets for everyday payments. Their needs are straightforward. They require clear payment confirmation, fiat-denominated values,
downloadable records, and multilingual support.

In operational terms, this includes stablecoin invoicing with fiat amounts. Businesses require downloadable transaction records in CSV or PDF. Teams need role-based access controls for finance departments. API access enables payout automation. Built-in AML
and KYT features are essential for oversight. Reconciliation tools with tax labels are needed for audits and accounting.

Interfaces must reflect how businesses already manage their financial operations. A concise statement showing who will receive what, when, and in which currency is more useful than a blockchain hash. Tools must support documentation that aligns with accounting
and compliance standards. These features make crypto practical for routine commercial use.

By prioritizing usability over novelty, platforms can meet the needs of real businesses. This shift makes infrastructure more relevant and positions it for long-term adoption.

Clear Rules Accelerate Development

One of the biggest barriers to growth in Web3 payments is regulatory uncertainty. Many jurisdictions still lack clear definitions for crypto transactions. In some cases, outright bans prevent formal adoption, even as millions use these tools informally to
move value across borders.

When regulation is clear and enforceable, product development becomes more focused and scalable. Frameworks that outline requirements for onboarding, transaction monitoring, and data handling give teams concrete targets. These requirements can be built directly
into platform logic and applied consistently.

Markets that introduced structured licensing early provided teams with the clarity to build compliant systems from the beginning. This reduced the need for post-launch fixes and lowered the risk of regulatory disruption. It also gave institutions confidence
in platform integrity.

MiCA, Georgia’s VASP licensing regime, Singapore’s MAS requirements, and Dubai’s staged licensing model all demonstrate how regulation can guide infrastructure development. These frameworks do not limit innovation. They create stable paths for scaling compliant
systems.

Frameworks such as the European Union’s MiCA regulation and early licensing regimes in countries like Georgia provide working models for how structured policy can enable innovation without compromising oversight. When regulation becomes an integral part
of the design process, it supports growth and streamlines compliance.

Making Payments Feel Normal

Payment systems succeed when they feel intuitive. Users should not need to understand cryptographic keys or blockchain mechanics to complete a transaction. They should be able to send, receive, and verify payments as easily as they do through online banking.

To support this, systems must follow conventions users already know. Wallets should display balances in the user’s local fiat currency. Confirmations should be instant and written in plain, localized language. Invoices must reflect tax and compliance details.
Transaction histories should be accessible and exportable.

Visa’s 2022 Consumer Payment Attitudes study found that 84 percent of users in the Asia Pacific prefer to view balances in their local currency when using digital wallets. Additionally, 65 percent of respondents reported greater trust in platforms that offer
fiat-equivalent displays. These findings underscore the importance of user familiarity in digital finance environments.

GrabPay and KakaoPay are examples of embedded payment systems that users prefer for convenience and context. Visa’s research also indicated that more than 70 percent of users in Southeast Asia favor payment flows that are integrated into the apps they already
use. This reinforces the idea that familiar environments reduce friction and increase usage.

For small and medium-sized businesses, features like downloadable transaction records and standardized documentation remain essential. According to the same report, 43 percent of surveyed merchants experienced difficulty reconciling crypto-related payments
with their traditional accounting systems. Infrastructure that supports clear reporting and tax-ready exports is necessary for widespread business adoption.

These features are not optional enhancements. They are the minimum required for any payment system that aims to serve real users in real markets. Functions like recurring payments, stablecoin invoicing, and background compliance checks should operate automatically,
just like in traditional financial software.

As infrastructure meets these expectations, crypto stops feeling like an alternative system. It becomes part of the norm. It becomes something people use without even thinking about it.

Trust Depends on Integration, Not Novelty

Web3 payments will not scale solely due to speed or novelty. They will grow through systems that deliver predictable results, meet regulatory standards, and offer practical value to users.

Reliable infrastructure requires more than isolated components. Identity verification, compliance tools, user workflows, and transaction records must function as one cohesive system. The goal is not to stitch together disconnected parts. The goal is to design
a platform that facilitates the legitimate movement of value across borders.

People use tools they can rely on. Businesses adopt systems that simplify operations. Regulators support platforms that enforce policy without needing manual oversight.

Web3 infrastructure will not replace traditional finance by standing apart from it; instead, it will complement it. It will become part of financial systems by aligning with how those systems already operate. This is how infrastructure earns long-term trust.

This structured thinking has been supported by some industry practitioners, including

Ilia Nemchenko.  

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• JPMorgan. (2025). Digital Payments with Kinexys and JPM Coin. https://www.jpmorgan.com/kinexys/digital-payments

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