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What is a crypto-fiat gateway?

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How to buy Bitcoin or other cryptocurrencies with euro, GBP, or CHF?

A fiat gateway is a combination of words that you will frequently hear if you decide to enter the cryptocurrency world and buy Bitcoin or other cryptocurrencies in a crypto app. To understand its meaning and function, you have to understand what fiat means first.

Fiat money is conventional money, which means - national currencies (such as USD, EUR, and CHF) the government issues that are not backed by any commodity (gold, oil, wheat). It derives from the Latin word fiat (from “facere” - make/do, present passive subjunctive “let it be done”).

Therefore, a fiat to crypto payment gateway is an entrance to the cryptocurrency world, the step at which you can deposit fiat into a cryptocurrency app. The term "fiat onramp" is synonymous with a fiat gateway and also refers to a method of converting traditional currencies into cryptocurrencies.

Namely, the architecture behind depositing money to a cryptocurrency app is the following: you have to transfer money from your bank account or digital wallet to the bank account of the entity that operates the cryptocurrency exchange of your choice. In theory, it is not as simple as that if we are talking about decentralized exchanges and DApps that are supposed not to belong to any entity. However, these still belong to the future. Since most exchanges are centralized and they generate an overwhelming proportion of volume, we will use them as an example.

Types of fiat gateways

In a broad sense, any form of fiat deposit into the crypto market is a fiat gateway.

Most exchanges are entities that have a bank account to transact with agents in traditional finance. The simplest way of depositing money to a cryptocurrency application is by making a bank transfer. If you are located in the Eurozone and the exchange as well, you are lucky because the SEPA transfers are usually either free or very cheap. If you are located outside of the eurozone, it’s quite probable that you will have to use the SWIFT system, which is more expensive and slower. In Asia, which technologically is more and more advanced than the “old world”, there are numerous alternative ways to make a fast transfer in local currencies.

Payment providers usually offer the possibility of card payments to recharge your fiat balance in a crypto app. These may be VISA or Mastercard or PayPal or Skrill or many other intermediaries that offer you added value in the form of a card that you can always carry with you and use instead of paper money.

With the card, you can pay on the Internet. For this added value they charge a commission. So, typically, when you choose between a bank transfer, which is direct from account A to account B, and a card payment that has to be carried out by an intermediary, you have to realize that in the latter case, you will have to pay a commission. In the cryptocurrency world, this commission normally is about 3-4%.

What if you don’t have a bank account or a credit card? Fiat onramp for the unbanked

Many cryptocurrency apps and projects are guided by a noble mission: democratizing finance, giving access to financial services to the unbanked, making the economy fairer, eliminating injustice and intermediaries, etc. So, no wonder that there are lots of interesting and promising projects that you can find in the crypto space. However, there are also certain limits within which they have to exist in order to be able to operate legally in the current legal framework.

We have already spoken elsewhere of some paradoxes of decentralized finance, such as the absence of true decentralization. So, you will realize that even if the crypto space is fighting to give access to the unbanked, in reality, if you don’t have a bank account or a card, you will find it quite challenging to enter the crypto market.

At the end of 2013, the first Bitcoin ATM was installed in Vancouver, Canada. One month later, the first European Bitcoin ATM was installed in Bratislava. Some Bitcoin Automated Teller Machines allow only to buy Bitcoin, others allow to sell it as well. They are connected to the Internet and process the operation in real-time. This sort of machine is particularly popular in countries with a high percentage of unbanked people. In early 2020, Nigeria became the 8th country to install a Bitcoin ATM. However, they are still a very rare phenomenon in the world.

There are cryptocurrency projects that allow you to buy cryptocurrencies at a shop. Imagine you go to a kiosk to buy newspapers and you ask to exchange a couple of euros in Ethereum and you get the operation done right at the cashier. In this case, even if you don’t have a banking account, the fiat-to-crypto operation is performed for you by an authorized intermediary. Businesses can enable a wallet on the platform and serve as a crypto onramp for their clients. 

Buying crypto from other people is a bit risky because it arises the usual problem in finance - trust. In traditional finance, since two peers don’t trust each other, they resort to a third party that guarantees the completion of the deal and gets a reward in exchange. If this third party eliminates competition, it starts requiring higher and higher rewards (remember how you could pay in cash with no commission on Blablacar and now the commission has become absurd?).

The whole concept of open finance aims at eliminating intermediaries by providing infallible technology and smart contracts that would make fraud physically impossible. So, in the case of buying something directly from another peer with no third party and no technological or other guarantees, you risk being scammed. If you still decide to consider such an option, the biggest database of possible sellers and buyers is Local Bitcoins.

Best choice - Lykke crypto exchange with a fiat gateway

You might have already realized that not all famous crypto exchanges have fiat gateways. Some of them only accept crypto deposits. Others do have fiat gateways but require high fees. Luckily, there’s an exchange with a convenient fiat gateway, suitable for trading since it doesn't offer high fees (actually, it doesn't charge any fees at all) and supports a handful of cryptocurrencies.

The Lykke Exchange is an all-in-one solution: 

Sign up with Lykke and start trading today!

Pros and cons of fiat gateways

Fiat gateway - pros

Fiat gateway - cons


Fiat to crypto payment gateways are essential tools for anyone interested in entering the crypto markets. They allow individuals to convert their local currency into cryptocurrencies easily and securely. However, it is important to note that many of these services charge fees for their use. For those looking for a fee-free option, Lykke Wallet is an excellent choice. With Lykke, users can convert fiat to crypto and then trade these cryptocurrencies at 0 fees. Sign up for Lykke Wallet today!

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