MetaMask, the world’s leading self-custodial hot wallet, has unveiled a new feature that enables users to convert cryptocurrencies into fiat currencies, such as USD. This move comes as various players in the web3 space aim to bridge the gap between digital assets and real-world usability.
MetaMask has introduced a cash-out feature that enables users to convert their cryptocurrencies, specifically ETH, into fiat currencies such as USD. While this feature enhances usability, users should be aware of potential transaction fees, including the gas fee and fees charged by cash-out providers. MetaMask’s expansion plans aim to cater to its worldwide community, while other platforms like Gnosis are also facilitating crypto spending through innovative solutions.
Self-Custodial Wallets Gain Popularity
The popularity of self-custodial wallets has surged in recent times, following the Coinbase incident that exposed the vulnerabilities of centralized exchanges. Self-custodial wallets empower users by granting them full control over their digital assets, eliminating the need for intermediaries.
While these wallets have traditionally posed a challenge for users due to their technical complexity, MetaMask and other providers are actively working to enhance their user-friendliness.
The Cash-Out Process
The cash-out feature on MetaMask currently supports the conversion of ETH, the world’s second-largest cryptocurrency, into fiat currencies based on the user’s location. To initiate the process, users select their country and specify the desired cash-out amount. They are then presented with a list of third-party “off-ramp” providers, including Moonpay and Transact, that facilitate the cash-out process.
Once the user selects an off-ramp provider, Moonpay takes over and transfers the ETH to the user’s designated bank account, after calculating the exchange rate. The funds typically arrive in the user’s bank account within minutes. Additionally, users have the option to withdraw funds to PayPal, as MetaMask has partnered with the popular payment platform for its on-ramp process.
The Potential for Widespread Adoption
The introduction of the cash-out feature on MetaMask has the potential to accelerate the platform’s mass adoption. However, the level of adoption will depend on the smoothness and affordability of the solution for average users. It is important to note that fees associated with the cash-out process can accumulate quickly.
Users are responsible for paying the gas fee, which compensates network validators for processing transactions on the decentralized network. In addition to the gas fee, users may also be charged a transaction fee by Moonpay or other cash-out providers. A MetaMask demo showed that the transaction cost amounted to approximately 8% of the total transaction.
Transaction costs may vary among users depending on the availability of withdrawal partners in their respective markets. Initially, the cash-out feature is being rolled out in the U.S., the U.K., and select European regions, with plans for expansion to cater to MetaMask’s global community.
Expanding Crypto Spending Options
MetaMask is not the only platform aiming to facilitate the spending of cryptocurrencies. Gnosis, a blockchain network renowned for its low gas fees, recently introduced a Visa card in Europe that allows users to spend cryptocurrencies from their self-custodial wallets. The service is expected to expand to the U.S. and Hong Kong in the near future.