The history of crypto and Web3 has had its fair share of mavericks and revolutionaries. Some of the most famous quotes in the industry have come from people who cherished an adversarial relationship with traditional institutions.

There are some famous quotes from titans of the industry like Coinbase CEO Brian Armstrong, who famously said that in some contexts Bitcoin had the “moral imperative to replace” fiat. Speculation on this matter occupied a lot of the discourse surrounding cryptocurrencies and Web3 for a very long while. Many articles were posted in some of the most reputable sites in the industry openly speculating about a complete overhaul of the global financial system.

This narrative took many shapes over the last few years.

Would CBDCs finally replace fiat? Is Bitcoin actually digital gold, rather than a replacement for fiat?

These narratives pitch an emergent technology, of great power and potential, against some of the most powerful industries on the planet, on which the vast majority of the population rely for the basic operation of their lives. No innovation, technological or otherwise, has ever succeeded in uprooting a globalized economy or else be deemed a failure.

Even a cursory reading of tech history suggests crypto must, much in the same way smartphones, the Internet, and even computers did in the past, integrate people’s lives, not perturb it. Only then can the superiority of a decentralized solution shine through.

The Case for Coexistence

At first glance, the inherent advantages of cryptocurrency—its decentralized nature, the promise of lower transaction fees, and faster international payments—seems to position it as a direct competitor to traditional financial institutions. Yet, a closer look at global markets suggest there are gaps where the financial system just isn’t doing its job.

1 - Companies dealing with non-fiat assets

For example, companies that work with assets such as stocks, bonds, precious metals, and cryptocurrencies. There currently is no efficient way for these companies to issue payment cards to their user base that allows them to access liquidity without conversion. NAKA’s Card and Card Payment Scheme (Network) covers cases like XAUT and BTC-LN, but can easily expand to include additional protocols, custom-built for any specific card issuer.

2 - Enterprises operating within underserved industries

Here we can talk about the gaming and adult industries, for example. The current market leaders have historically denied service to all merchants within these sectors. NAKA distinguishes itself through the incorporation of strict compliance measures and unwavering adherence to regulatory standards, ensuring a secure framework for payments in all industries.

‍3 - Governments and companies operating in territories with large unbanked populations

The NAKA Card and Payment Network operate independently of the banking system and will allow even those without access to it to become financially independent, make digital payments, gain access to loans and financing, start saving, etc.

These are only three examples of simple and immediate applications for decentralized currencies that the traditional financial system is failing to address.

NAKA is focusing on use-cases like this because this is where this product is most needed. This is where adoption can happen best. This is how we can build the kind of reputation for security, efficiency, cost-effectiveness, and reliability that leads to mass adoption.

Bridging the Financial Divide

The statistics are stark: nearly one in every three adults in the entire global population lacks access to basic banking services, impeding their ability to save, invest, or even participate in the global economy. Traditional banking, with its requirements for documentation, credit history, and physical infrastructure, often builds invisible walls that are impossible to overcome.

Crypto is a world-historical opportunity to bridge this gap, to provide a universe of 1.4 billion people with the possibility of accessing financial autonomy even if they can’t or won’t get a bank account.

NAKA’s Card and Card Payment Network are already in operation in El Salvador, a country where approximately 70% of the population don’t have a bank account. By using NAKA, merchants in El Salvador will be able to accept multiple payment methods in one solution. With the same hardware, and with no need for extra training for staff, they will be able to take globally accepted payment cards, like Visa, Mastercard, Diners, digital payments like Google or Apple Wallet, and also on-chain payments with the NAKA Card and crypto payments (Bitcoin on Lightning and USDT on multiple networks), also powered by NAKA.

This is what we mean by a holistic solution.

Navigating Regulatory Landscapes

To achieve a harmonious integration of crypto payments and traditional finance is not without its challenges. Regulatory frameworks around cryptocurrency are still in their infancy and vary significantly across different jurisdictions. One of the most significant hurdles to overcome for payment processing is the deep trust people have for traditional operators.

Numbers indicate that in countries with relatively stable banking industries, 5% or fewer have no confidence in their bank.

For Web3 to achieve this level of confidence, and cooperate in this regard as well, it’s important to establish airtight security and demonstrate it. NAKA’s deployments in Switzerland and El Salvador, as well as previous operations in the EU have all been exemplary in adhering to the strictest security protocols.

This includes three distinct vectors, that put NAKA’s solutions on par with (or beyond) traditional industries:

1 - Adherence to Industry Standards

The payment infrastructure must comply with the Payment Card Industry Data Security Standard (PCI DSS), which is crucial for the secure handling of cardholder information. This involves secure network configurations, access controls, and regular security assessments to safeguard sensitive financial information.

2 - Encryption and Tokenization‍

— Data protection during transmission is achieved through robust encryption mechanisms, such as TLS (Transport Layer Security), to prevent unauthorized access to sensitive information.

— Tokenization is used for data storage, replacing sensitive data like credit card numbers with unique tokens, adding an extra layer of security.

3 - Regular Security Audits:

— Regular security audits and assessments are essential to identify vulnerabilities within the payment infrastructure.

— Penetration testing simulates real-world attacks to evaluate the system's resilience and identify exploitable vulnerabilities.

— Security patch management involves regularly updating and patching software components to address known vulnerabilities and protect against potential exploits.

We must understand that security is not a one-time thing, and convergence and cooperation with traditional industries and standards is also essential. NAKA enforces a continuous process of security assessment that evolves over time. The regular auditing schedule is a key part of this as is continually embracing advanced security solutions as they become available.

You can start today

The NAKA Network is fully compatible with EMV standards. This allows virtually universal compatibility since EMV is universally supported across all point-of-sale (POS) payment systems that cater to Europay, Visa, Mastercard, and other mainstream payment networks.

If your company is interested in issuing its very own NAKA Card, you should get in touch.