Seventeen percent of Americans have invested in, traded, and used a cryptocurrency. With hundreds of millions of people in the United States, there is a great chance one of your customers is a crypto user.
Accepting cryptocurrency payments or offering crypto solutions can make your business appealing to a wider audience. The problem is that many businesses don’t have the bandwidth or development resources to create crypto solutions from scratch.
This is where the crypto-as-a-service (CaaS) model comes in. Cryptocurrency isn’t just about trading or investing anymore — CaaS is revolutionizing how businesses interact with money.
In this guide, we’ll explain the basics of CaaS and show you how AlphaPoint can deliver white-label crypto services for your business.
Understanding Crypto as a Service
CaaS is a financial technology (FinTech) business model that provides a crypto service on a regular basis. With this model, a company can sign up for a white-label crypto service and deliver it to its own customer base.
As long as they maintain their subscription, a business can offer the CaaS company’s crypto services as their own. Let’s use an example to better explain.
Let’s say you run a credit union or another financial institution. You want to take advantage of the growing crypto market in the United States by allowing your customers to hold their Bitcoin and Ethereum via a crypto wallet.
However, you don’t want to spend significant company resources to build a proprietary crypto wallet across a blockchain network. Instead, you work with a white-label partner who leases their crypto wallet to you on an annual subscription.
This way, you can provide your customers with digital wallets without spending tons of time and money doing the work yourself.
CaaS differs from a traditional cryptocurrency investment because it’s used by a wide range of companies across verticals who want to expand their existing services. Traditional crypto investment, on the other hand, focuses more on financial gains by holding digital assets.
Types of CaaS Service
CaaS solutions span across a wide range of offerings:
CaaS providers can provide businesses with white-label crypto wallets that their customers can use to store and manage their digital assets via blockchain technology.
Financial institutions can use white-label crypto wallets to satisfy their existing customers and appeal to new audiences who are using cryptocurrencies.
White-label providers can provide businesses with access to crypto exchange APIs that their customers can use to trade crypto assets.
All you have to do is sign up for a CaaS provider that offers a crypto trading platform, and they’ll give you the API tools to integrate their system with yours.
CaaS providers can also allow businesses to accept cryptocurrency as a payment method — similar to debit, credit, PayPal, etc. However, many ecommerce stores deal with regional restrictions, and some payment methods aren’t universally available. If you operate an online store, this may be a worthwhile opportunity to help you reach worldwide audiences.
Crypto custody makes it possible for people to store their crypto assets and protect them against theft. If crypto investors make up your target audience, you could hire white-label custodians to keep their assets secure.
Crypto Lending and Borrowing
CaaS solutions aren’t just limited to digital products, like wallets and trading platforms. CaaS providers can give businesses the ability to offer crypto lending and borrowing services to their customers.
Crypto Staking and Yield Farming
Staking and yield farming are two of the most essential components of decentralized finance (DeFi) applications. White-label companies can help businesses offer their customers crypto staking and yield farming services.
How Crypto as a Service Works
As you can see, there are a variety of different white-label cryptocurrency services to choose from. Regardless of the service you choose, here’s how the onboard process works when you work with AlphaPoint:
- A financial institution signs up for a white-label CaaS service plan from a provider using AlphaPoint’s technology.
- The AlphaPoint Exchange (APEX) gives the financial institution access to its exchange software and liquidity solutions (all provided transparently by AlphaPoint Certified Partners), fully operated by the APEX-powered exchange.
- The financial institution integrates AlphaPoint’s APIs (and possibly UI assets) into its own platform.
- The financial institution launches the crypto service or product for its customers.
With APIs, financial institutions can integrate AlphaPoint’s technology with their own system. This establishes a seamless transfer of our crypto services to your business — no time-consuming configuration to your platform’s backend required.
Key Benefits of CaaS
CaaS is a popular alternative for businesses who want to save time and money while venturing into the world of digital currencies. In addition to expanding offerings to customers, here are a few other advantages businesses can enjoy by implementing this model:
CaaS providers can help businesses save money on the upfront and ongoing costs of building and maintaining their own crypto infrastructure.
The costs of building crypto infrastructure can be prohibitive for many businesses, especially if they’re new to the crypto market: Building a crypto exchange from scratch can range from $200,000 to $600,000.
If you want to bypass these sky-high expenses, you can work with a CaaS provider and use their software for your customers.
CaaS providers have the expertise and experience to help businesses implement crypto products and services quickly and securely.
If you’re not familiar with the crypto market and want to launch a new service, it’s smart to rely on a company with an established crypto infrastructure, like AlphaPoint.
With 10+ years of experience since our founding in 2013, AlphaPoint has pioneered the belief that crypto will transform finance — and we remain at the forefront of innovation. With AlphaPoint’s expertise on your side, you can avoid the costs of starting an ill-prepared crypto development project on your own.
Depending on where you live, there are several crypto regulations to comply with. Otherwise, your business could face strict legal ramifications. Reputable CaaS providers comply with local and international crypto regulations.
Knowing that your business is safe from unexpected legal consequences can give you peace of mind. When it comes to compliance, security is also an important factor. Crypto platforms need industry-leading security protocols, like Know Your Customer (KYC), to protect their customers against cyber criminals.
CaaS Use Cases
In which industries does CaaS have the most practical applications? The short answer is “all of them.” From finance to gaming, the CaaS model has several use cases we’ll explore in the sections below.
1. Banks, Credit Unions, and Other Financial Institutions
Banks and credit unions can expand their financial services to appeal to crypto investors. Specifically, they can purchase white-label crypto trading and custody services to help their customers engage the market and hold their assets, such as NFTs.
2. Remittance Companies
Remittance companies can also benefit from white-label service providers. In particular, these financial institutions can offer cheaper and faster cross-border payments to their customers via cryptocurrency.
3. Gaming Companies
Gaming companies use CaaS to offer in-game crypto payments and rewards to their players. Relying on CaaS means these companies don’t have to build their own crypto services from scratch.
4. Ecommerce Brands
Local and global ecommerce brands can leverage CaaS to accept cryptocurrencies as payment. With the popularity of cryptocurrencies rising across the globe, online retailers can accept crypto to expand their customer base.
CaaS makes it possible for any company to offer crypto services to their customers, and with AlphaPoint Labs you can easily integrate a variety of crypto services into your business model.
Let the experts manage the technical complexities and operations of your digital asset infrastructure build, allowing you to focus on delivering value to your customers and transforming your business.
Request a demo today to learn more about how you can expand your service offerings with AlphaPoint.