Experiment in facilitating an international payment using cStables

[edlovecrypto]

Hello, friends. This is Ed, from Brazil.

This week I was helping a friend from Portugal to accept a payment from a client in Brazil using cStables as the payment rails. This is what happened and the costs incurred:

1. Lovecrypto accepted the value in BRL through PIX (Instant Payment system).

2. I converted cUSD to cEUR and instructed my friend to download Valora wallet to receive it. In this conversion, there was a 0.25% slippage.
   

   

3. I was told there were already Cash In/Out methods integrated with Valora in Europe. I even did an analysis of the costs and methods of the providers. Here it is:
   

   

4. But my friend, who was in Portugal, only saw the option to use a third party exchange. So, the cash out is not integrated in Valora yet.
   

   

Can you please instruct me if there is a way to cash out from Valora in Portugal? Or is there a way to exchange between cStables with less slippage?

I think the options for cash in and cash out in Europe are so expensive! In Brazil it is simpler, faster and cheaper because we use PIX (Instant Payment). But Europe is very developed regarding Embebbed Finance providers.

Friends from Europe: Would you like to see Lovecrypto expanding its offers to Europe?

[Deepcryptodive]

Hi Ed,

While the Mento team may have additional insights, allow me to share my point of view.

I believe the complexity of your situation arose when you chose to swap cUSD for cEUR. I would caution others against taking this step, given the current limited liquidity of cEUR. The current situation for both on-ramping and off-ramping is problematic. Europe’s main off-ramp provider, Ramp Network, has even halted cEUR conversions. You’re better of to stick with cUSD.

So, what are the immediate options for your friend?

1. Reconvert the cEUR back into cUSD via Valora.
2. Use Valora’s ‘Withdraw Funds’ feature to offramp the cUSD through the only available method in Portugal, Ramp Network. While their fees are high (~4% at the time of this writing), it remains the simplest solution.

Alternatively, your friend could opt to use a centralized exchange to liquidate the cUSD:

2. They could transfer the cUSD to an exchange listing cUSD, like, KuCoin, Huobi, Bittrex and Okcoin. From there, they can trade it for USD or EUR, then withdraw it to their bank account. This presumes they already have an account on the exchange. If they don’t, the next option might be preferable.

Alternative B - There’s also a DeFi and USDC offramp option:

2. Send the cUSD to Metamask or Coinbase Wallet or another wallet that supports multiple blockchains (!!! with Valora funds will get stuck in the next steps !!!)

3. Covert the cUSD to USDC (on Celo) and bridge the funds to another chain like Polygon. This can be easily done on https://app.halofi.me/#/buy .
   

4. The USDC can then be deposited to any major DeFi exchange (e.g. Kraken, Bitstamp, etc.) or any place where USDC can be off-ramped or spent. I’ve found Kraken to be a reliable choice.

While I wish it were not the case, the current situation with Celo means that this last option may offer the best exchange rates. Even though it’s using an alternative stablecoin and blockchain. But that is the current state of affairs.

This shows that we have a far way to go to make cStables more accessible to people in Europe!
In Europe, the only FiatConnect partner that I am aware of is https://www.getunblock.com/. While they currently don’t support cEUR or cUSD offramping, once they do (and if other projects integrate them), they could present a way better solution.

[edlovecrypto]

Thanks for the insight, friend.

I too believe that the way to go is to bring more companies into the Fiat Connect API so that competition can reduce the price.

But for users like my friend, who does not know much about crypto, to make him to use a bridge to other coin or to create an account in an exchange is a HUGE step.

Lovecrypto (our startup), is almost finishing implementing the Fiat Connect API for Cash out (and soon cash In as well) in Brazil. We could potentially expand to Europe if we are able to find investors to finance the expansion.

We could bring the cost of on/off ramp in Europe to 2% + 1 Euro.

[tkwoncelo]

In Canada - on high volume exchanges - you’ll generally pay 1% spread on conversion and get free instant fiat deposits and withdrawals (Interac Etransfers or Visa debit direct).

I would have expected Europe to have infrastructure available to facilitate super cheap on/off-ramping.

[edlovecrypto]

From my previous research, the Euro zone has an instant payment system called SEPA (Single Euro Payments Area (SEPA)). But I am not sure the percentage of people that use it. Also, the Euro Digital (Europe´s CBDC) will also serve as a payment channel for the end consumer when it is launched.

But from my experience so far, we incorporated in Portugal but had a big difficulty in opening a bank account in Europe. Also, many embedded finance providers (who can facilitate payments) also do not want to do business with a company who have “crypto” in its name. So maybe they do not have much competition because “the system” makes it harder for competitors to come up.