Learning the friendly way

You've likely heard the term being thrown around in the cryptosphere. In this piece, we're breaking down what a fiat wallet is, why one might choose to use it, and how to create one should you wish to.

What Is a Fiat Wallet?

A fiat wallet is a digital account where you can store, send, and receive traditional (fiat) currencies like USD, EUR, or GBP. Think of it as an online version of a bank account, but often integrated within a crypto or fintech platform.

Many crypto exchanges offer fiat wallets alongside crypto wallets, allowing users to buy and sell digital assets more efficiently. Instead of waiting for bank transfers to clear, users can use their fiat wallet to make instant deposits or purchases.

Fiat wallets are also popular in fintech apps and are typically operated under an e-money license. Some platforms may even offer perks like interest or rewards for holding fiat funds in the wallet.

What Is Fiat Currency?

Before we go further, it's important to understand what "fiat" means. A fiat currency is a government-issued currency—like the US dollar, Euro, or British pound—not backed by a physical commodity like gold but by the trust in the government that issues it.

These currencies are regulated by central banks and are legal tender in their respective regions.

How Does a Fiat Wallet Work?

Much like a crypto wallet, a fiat wallet stores currency digitally. The key difference? It holds regular government-issued currency, not crypto assets.

Users often keep fiat in these wallets on exchanges or fintech platforms to allow quick transactions, avoid delays, or earn passive rewards. For instance, you can instantly buy Bitcoin using funds from your fiat wallet—no need to wait for your bank to process a transfer.

It’s worth noting that fiat wallets are not connected to a blockchain. They operate entirely outside the crypto ecosystem, serving as a bridge between traditional finance and digital assets.

Why Use a Fiat Wallet?

The short answer: speed and flexibility.

Here are some common reasons users opt for a fiat wallet:

• To buy or sell cryptocurrencies instantly, especially during periods of volatility
• To avoid delays from traditional bank transfers
• To keep cash on hand for seizing market opportunities

Imagine spotting a huge dip in a crypto asset overnight. If you rely on a standard bank transfer, it could take 2–3 days before your funds are available—by then, the opportunity may be gone. With a fiat wallet, you could act immediately.

For traders and investors, having funds ready to go can make a big difference. In crypto, speed often equals profit.

Is Your Money Safe in a Fiat Wallet?

The safety of your funds depends on the platform hosting your fiat wallet. A well-regulated provider with strong security practices should offer robust protection—just like a traditional bank.

Most platforms apply:

• Data encryption
• Multi-factor authentication
• Biometric verification or one-time passwords (OTP)

Fiat wallets and crypto wallets typically share the same level of platform-based security, so always choose a provider that meets compliance standards and prioritizes user safety.

Store Your Fiat Currencies in Fiat Wallets on Tap

With Tap, you can securely store your fiat currencies in a regulated environment.

Here’s how to deposit into your fiat wallet:

1. Open the Tap app
2. Go to your Cash Wallet
3. Select your desired fiat currency
4. Choose between bank transfer or debit card
5. Complete the transaction

Once the bank clears the funds, your wallet will be credited and ready to use. You can hold the funds as long as you like, or send them back to your bank at any time with just a few taps.

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There has been an influx of conversation about Proof of Work (PoW) and Proof of Stake (PoS) consensus mechanisms recently. But what do these really mean? In this article, we're fleshing out what they are, how they work, and how they differ from each other.

The shift from traditional PoW systems to more modern PoS alternatives represents one of the most significant developments in crypto history. Understanding these mechanisms isn't just academic curiosity - it directly impacts energy consumption, transaction speeds, security models, and the future sustainability of blockchain networks. 

Whether you're considering which cryptocurrencies to invest in or simply want to understand the technology behind your digital assets, grasping these fundamental concepts is fairly important.

What is a consensus mechanism in crypto?

Before we get started, let's first address what a consensus mechanism is. 

Whether PoW or PoS, the consensus mechanism is the agreed-upon protocol that the entire network will use to maintain and operate the blockchain. It looks at how transactions are verified, the amount of energy they require and how new coins enter circulation. The consensus mechanism is effectively the protocol that keeps all the computers on the network in check.

Think of a consensus mechanism as the rulebook that all participants in a blockchain network must follow. Without it, there would be no way to prevent double-spending (the digital equivalent of spending the same dollar twice). These mechanisms ensure that all participants agree on the current state of the ledger, maintaining the integrity and security that make cryptocurrencies valuable.

While PoW and PoS are the most prominent consensus mechanisms, others exist, including Proof of Authority (PoA) and Delegated Proof of Stake (DPoS). Each serves specific use cases and comes with unique trade-offs between security, speed, and decentralisation.

What is Proof of Work (PoW)?

Proof of Work might be the most well-known of the two as Bitcoin, the first cryptocurrency to come into existence, uses it. Despite what many think, this was not when the consensus mechanism was created. It dates back before crypto's integration into the financial sector, right back to the early 1990s when it was initially used as a means to mitigate email spam.

The system worked in such a way that sending an email required a small amount of work to send one email, and a large amount to send out mass spam emails. Alongside blockchain technology, Satoshi Nakamoto reworked these concepts to create the first digital currency. While the electricity and money implications remained the same, he eradicated the need for human intervention.

The blockchain is made up of blocks containing data pertaining to the network, stored in chronological order. The first block on the blockchain is known as the Genesis block and is hardcoded into its software. Each block after that references the previous block and contains an updated version of the blockchain. Still with me? Let’s dive deeper. 

New blocks are added to the network by miners who compete with each other to solve a complex cryptographic puzzle. The first to complete the puzzle gets to execute the transactions and receive the miner's fee (a reward for their time and energy). 

The process of miners racing to finish the puzzle is known as hashing, as miners are guessing a string of pseudorandom numbers, known as hashes. Once a miner establishes the winning hash, it is broadcast to the network for all the nodes (network of computers) to verify whether it is correct or not. If it is correct, the block is added to the blockchain, and the miner receives the reward.

The reward is new coins that are then minted and added to circulation. In the case of Bitcoin, freshly minted BTC will be distributed to the miners, with this number reducing each time the blockchain reaches a certain number of blocks. This is called a halving and takes place every 210,000 blocks (which takes place roughly every 4 years). Halvings keep the cryptocurrency deflationary and finite.

Examples of Proof of Work cryptocurrencies

Major PoW cryptocurrencies include Bitcoin, Litecoin, Dogecoin, and Ethereum Classic. These networks have demonstrated remarkable security over the years of operation, with Bitcoin alone processing over $19 trillion in transaction volume in 2024 without a successful attack on its consensus mechanism. 

However, this security comes at the cost of significant energy consumption, with Bitcoin's network alone consuming more electricity than some countries.

What is Proof of Stake (PoS)?

Proof of Stake was first introduced to the world through Peercoin in 2012, gaining more traction when Ethereum began implementing PoS in 2020 with the launch of Beacon Chain, and fully transitioned via The Merge in 2022.

Considered a more "energy-efficient" means of operating crypto networks, instead of using energy to race to find the winning hash, PoS focuses on participation in the network by looking at ownership in terms of the coin's total supply. PoS was designed to solve the energy problems that PoW platforms created.

Unlike PoW, which requires specialised mining equipment (ASICs), PoS validation can be done on standard hardware, provided there is stable internet and enough ETH staked.

Instead of a number of miners racing at the same time to solve the same puzzle, the PoS algorithm pseudo-randomly selects a node that will be responsible for verifying the transactions. 

This election is based on the number of coins that a particular node holds. Once selected, the node verifies and signs off on the validity of the transactions and proposes the block to the network. Once the network accepts, the block is added to the blockchain in the same chronological order as the PoW consensus.

Nodes are selected by engaging in a process called staking. They are required to stake (lock) their funds on the platform as collateral in order to be selected. In order not to favour the richest of the nodes, the algorithm will typically also favour how long the funds have been staked for and add an element of randomisation. 

As there is no competition between the miners to race to solve the puzzle, this process is referred to as minting or forging on the PoS networks. The cost implications are specific to that of the platform.

PoS networks often implement additional mechanisms to ensure fairness and security. Slashing is a penalty system where validators can lose a portion of their staked tokens if they act maliciously or fail to properly validate transactions. This economic incentive structure replaces the computational cost of PoW with financial risk, creating a different but equally effective deterrent against bad actors.

Examples of Proof of Stake cryptocurrencies

Leading PoS cryptocurrencies include Ethereum, Solana, Cardano, Polkadot, and Avalanche. These networks can process thousands of transactions per second while consuming a fraction of the energy required by PoW systems, making them attractive for applications requiring high throughput and environmental sustainability.

Proof of Work vs. Proof of Stake: key differences

The differences extend beyond these technical aspects. PoW networks tend to have more predictable issuance schedules and have proven their resilience over longer periods.

PoS networks also offer more flexibility in governance and can implement upgrades more easily, but they're still relatively new compared to established PoW systems.

Industry experts have varying perspectives on these trade-offs. Fidelity Digital Assets noted that PoW's "proven track record" gives it advantages in terms of demonstrated security, while others argue that PoS represents the natural evolution of blockchain technology toward greater efficiency and sustainability.

Pros and cons of PoW and PoS

Proof of Work: advantages and disadvantages

Advantages:

• PoW systems offer unparalleled security through their requirement for massive computational investment, making 51% attacks on networks like Bitcoin practically impossible to execute due to the enormous costs involved.
• These systems have demonstrated remarkable stability over more than a decade of operation, processing trillions of dollars in value with zero successful attacks on their core consensus mechanisms.
• The decentralised nature of mining operations, while concentrated in pools, still maintains a high degree of censorship resistance and network independence.
• PoW has a proven track record that provides confidence to institutional investors and long-term holders seeking maximum security for their assets.

Disadvantages:

• The energy consumption of PoW networks has become their most criticised aspect, with Bitcoin alone consuming more electricity than countries like Argentina.
• Transaction throughput remains severely limited, creating bottlenecks during periods of high demand and resulting in dramatically increased fees for users.
• The environmental impact has led to regulatory scrutiny in various jurisdictions, with some countries banning or restricting PoW mining operations.
• The high barrier to entry for mining has created concerns about centralisation in regions with cheap electricity, potentially concentrating power in specific geographic areas.

Proof of Stake: advantages and disadvantages

Advantages:

• PoS systems consume dramatically less energy while maintaining strong security through economic incentives rather than computational waste, reducing environmental impact by over 99%.
• They can process transactions much faster and at lower costs, making them suitable for everyday use and complex applications like DeFi.
• The lower barrier to entry allows more participants to earn rewards through staking, potentially leading to better decentralisation and broader network participation.
• These systems offer more flexibility for implementing upgrades and governance changes, allowing networks to evolve more rapidly in response to user needs.

Disadvantages:

• PoS networks are relatively new and haven't been tested over the same timeframes as PoW systems, creating uncertainty about their long-term security properties under extreme conditions.
• The "rich get richer" dynamic, where larger stakes earn proportionally more rewards, could lead to centralisation over time as wealth concentrates among the largest validators.
• Some critics argue that PoS systems are less censorship-resistant because validators can be more easily identified and potentially coerced by authorities or malicious actors.
• The complexity of slashing mechanisms and validator requirements introduces new types of risks for participants, including the potential for technical errors to result in financial losses.

It’s worth noting that Ethereum's successful transition to PoS through "The Merge" in September 2022 provided significant validation for the PoS model, demonstrating that large, valuable networks can successfully implement this consensus mechanism while maintaining security and functionality.

Why did Ethereum move to Proof of Stake?

Ethereum's transition from PoW to PoS, known as "The Merge," arguably represented one of the most significant technical achievements in crypto history. The upgrade, completed in September 2022, was driven by several critical factors that had been limiting Ethereum's growth and adoption.

The primary motivation was scalability. Ethereum's PoW system could only process about 15 transactions per second, creating severe bottlenecks as the network grew. High gas fees during peak usage periods made the network unsuitable for many applications, particularly those requiring frequent, small-value transactions. 

The PoS system laid the groundwork for future upgrades that would dramatically increase transaction throughput.

Environmental concerns were a key factor in the shift, with the move to PoS cutting energy use by over 99%, directly tackling one of crypto’s biggest criticisms.

The economic shift was significant. Under its proof‑of‑work system, Ethereum paid out roughly $5 billion annually to miners via block rewards. After the Merge, those rewards shrank by over 80%, now going to validators who stake ETH—an approach widely seen as more sustainable. At the same time, the protocol burns a major portion of transaction fees under EIP‑1559, making ETH potentially deflationary during high usage.

The successful completion of The Merge sent a powerful signal to the broader crypto industry about the viability of PoS systems. It demonstrated that even large, complex networks with billions of dollars in value could successfully transition to more efficient consensus mechanisms without compromising security or functionality.

Which is more secure: PoW or PoS?

The security debate between PoW and PoS systems involves fundamentally different approaches to protecting blockchain networks. Both have proven effective, but they operate on distinct principles that create unique strengths and vulnerabilities.

Security 

PoW security relies on the economic cost of mounting an attack. To successfully attack a PoW network, an adversary would need to control more than 50% of the network's hash rate, requiring massive investments in specialised hardware and electricity. 

For Bitcoin, this would cost billions of dollars and require more mining equipment than currently exists. The beauty of this system lies in its simplicity - the security assumptions are straightforward and have been tested over many years.

PoS security operates through economic penalties rather than computational costs. Validators must stake significant amounts of the network's native token as collateral. If they act maliciously or fail to properly validate transactions, they face slashing: the permanent loss of their staked tokens. This economic incentive structure ensures that honest behaviour is more profitable than attempting to attack the network.

Centralisation 

Each system faces different types of centralisation risks. PoW networks can become centralised through mining pools and the concentration of mining operations in regions with cheap electricity. PoS networks face the risk of wealth concentration, where large stakeholders could potentially gain disproportionate control over the network.

The "nothing at stake" problem, often cited as a weakness of PoS, has been largely addressed through sophisticated slashing mechanisms and finality rules. Modern PoS implementations include penalties that make it economically irrational to validate conflicting blockchain histories.

Which is better?

Experts remain divided on which system offers superior long-term security. The reality is that both systems can be highly secure when properly implemented, with the choice often depending on other factors like energy efficiency, scalability, and governance requirements.

The future of blockchain consensus mechanisms

The evolution of consensus mechanisms continues beyond the PoW versus PoS debate. While these two models dominate current discussions, innovative alternatives are emerging that could reshape how blockchain networks operate in the future.

Hybrid consensus models are gaining attention, combining elements of different mechanisms to balance security, efficiency, and decentralisation. Some networks use PoW for initial block creation and PoS for finalisation, attempting to capture the benefits of both systems while mitigating their individual weaknesses.

Proof of Authority (PoA) systems have found success in enterprise and consortium blockchains where participants are known and trusted. These systems sacrifice some decentralisation for dramatically improved performance and energy efficiency. 

Delegated Proof of Stake (DPoS) represents another variation, where token holders vote for delegates who validate transactions on their behalf.

Emerging mechanisms like Proof of Space, Proof of Burn, and various forms of Proof of Activity are being explored for specific use cases. These alternatives aim to address particular limitations of existing systems or serve specialised applications.

The trend toward environmental sustainability is likely to continue driving innovation in consensus mechanisms. As regulatory pressure increases and institutional adoption grows, networks that can demonstrate minimal environmental impact while maintaining security will have significant advantages.

However, it's unlikely that PoS will completely replace PoW in the near future. Bitcoin's position as digital gold seems secure, and its PoW consensus mechanism is integral to its value proposition. Instead, we're likely to see continued specialisation, with different consensus mechanisms serving different purposes within the broader crypto ecosystem.

Conclusion

The PoW versus PoS debate isn't about declaring a winner, it's about recognising that each serves different purposes in the evolving crypto landscape. Many in the industry consider Bitcoin’s PoW to be a benchmark for security and decentralisation, while PoS networks are becoming the preferred choice for apps requiring speed, efficiency, and environmental sustainability.

Ethereum's successful transition to PoS proved that established networks can evolve without sacrificing security, validating PoS as a mature alternative. As the space develops, expect to see continued specialisation rather than replacement, with different consensus mechanisms optimised for specific use cases.

For investors and enthusiasts, understanding these mechanisms is essential for evaluating projects and predicting where the technology is headed. The consensus mechanism innovation continues to be one of blockchain's most dynamic frontiers.

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Security tokens are digital representations of real-world assets like stocks, bonds, and real estate that live on the blockchain. Think of them as the bridge between Wall Street's traditional assets and crypto's 24/7, borderless trading potential.

And the momentum surrounding them is undeniable. While cryptocurrencies grab headlines with wild price swings and meme coins, security tokens have been quietly building the infrastructure for something much bigger: the complete digitisation of asset ownership. 

We're talking about trillion-dollar markets getting tokenised, institutional investors finally getting comfortable with blockchain, and everyday people gaining access to investment opportunities that were previously reserved for the ultra-wealthy.

But let's keep it real - this isn't just another crypto hype cycle. Security tokens come with serious regulatory frameworks, compliance requirements, and technical complexities that separate them from the wild west of early crypto. They represent the maturation of blockchain technology, where innovation meets regulation in ways that actually make sense.

Here's what you need to know: Whether you're a financial professional trying to understand the next evolution of asset management or someone just getting started in crypto, security tokens are reshaping how we think about ownership and investment.

Let's dive into the complete landscape - from how these tokens actually work to why they might just be the bridge that brings blockchain technology into the mainstream financial world.

What is a security token?

A security token is essentially a digital certificate of ownership that represents a stake in real-world assets. Think stocks, bonds, real estate, commodities, or even fine art - all living on the blockchain with smart contracts handling the heavy lifting.

Instead of paper certificates or digital entries in traditional databases, these tokens exist on distributed ledgers that anyone can verify. It's like having a tamper-proof receipt for your ownership that the entire world can validate.

The magic happens when you realise what this means for accessibility. That $50 million commercial building in downtown Manhattan? With security tokens, you could own a piece of it for a few hundred bucks. The barriers that kept regular investors out of premium asset classes are crumbling.

Side note: the cybersecurity context

Before we go deeper, let's clear up some confusion. "Security token" also refers to those little devices or apps that generate authentication codes for logging into secure systems. While that's not our main focus here, we just wanted to clarify.

How do security tokens work?

The tokenisation process

Say you've got a real-world asset - a luxury apartment building worth $10 million. Traditional finance would require massive capital, complex legal structures, and exclusive access to invest. Security tokens flip that script entirely.

The building gets legally structured into a digital framework where ownership rights are represented by blockchain tokens. Each token represents a fractional ownership stake, complete with rights to rental income, appreciation, and voting on major decisions.

The transformation isn't just technical, it's fundamental. Assets that were once illiquid and exclusive become tradeable, divisible, and globally accessible. At the risk of sounding dramatic, we're talking about democratising investment opportunities that have been locked away for centuries.

Blockchain mechanisms & smart contracts

Smart contracts are the secret sauce that makes this whole system tick. These aren't just digital agreements - they're self-executing programs that automatically handle compliance, distributions, and transfers based on predetermined rules.

This would look like dividend payments happening automatically when profits hit your smart contract, or voting rights that activate based on your token holdings. No intermediaries, no manual processing, no waiting for someone else to make decisions. The blockchain handles it all with mathematical precision.

The transparency factor is massive, too. Every transaction, every ownership change, every compliance check is recorded on an immutable ledger. A public audit trail that never lies and never disappears.

Security tokens vs. cryptocurrencies

Here's where things get spicy - not all digital assets are created equal.

Purpose and regulation differences

Cryptocurrencies like Bitcoin and Ethereum started as digital currencies or platforms for decentralised applications. They're designed to function independently of traditional financial systems, often with minimal regulatory oversight.

Security tokens play by completely different rules. They're subject to the same securities regulations as traditional stocks and bonds, which means SEC oversight, investor protections, and compliance requirements. This isn't the wild west - it's Wall Street with blockchain superpowers.

The regulatory framework actually becomes a feature, not a bug. For instance, Institutional investors who stayed away from crypto's volatility and regulatory uncertainty are jumping into security tokens because they recognise the legal structure and protections.

Common misconceptions

The biggest myth? That security tokens are just "boring crypto." Wrong. They're the bridge that brings trillion-dollar asset classes into the 24/7, globally accessible blockchain ecosystem.

Another misconception is that regulation kills innovation. In reality, clear regulatory frameworks are accelerating institutional adoption and creating the infrastructure for massive capital flows into tokenised assets.

Types of security tokens

Asset-backed security tokens

Equity tokens represent ownership stakes in companies, complete with voting rights and profit distributions. Instead of traditional shares, you hold blockchain tokens that prove your ownership and automatically handle shareholder benefits.

Real estate tokens are fracturing the property market in the best possible way. Commercial buildings, residential complexes, and even individual properties are getting tokenised, allowing investors to build diversified real estate portfolios with minimal capital requirements.

Debt tokens represent bonds and loan instruments, offering fixed income opportunities with blockchain's transparency and efficiency. Corporate bonds, government securities, and alternative lending products are all getting the tokenisation treatment.

Commodity tokens bring physical assets like gold, oil, and agricultural products into the digital realm, often backed by actual reserves and offering exposure without the complexities of physical ownership.

Utility versus security tokens

The distinction comes down to the Howey Test - a legal framework that determines whether something qualifies as a security. If you're buying a token primarily for investment returns based on others' efforts, it's likely a security token requiring regulatory compliance.

Utility tokens, on the other hand, are designed to provide access to specific services or platforms. Think of them as digital arcade tokens that unlock functionality rather than investment opportunities.

The lines blur sometimes, but the key difference is intent and structure. Security tokens are explicitly designed as investment vehicles with regulatory protections.

Side note: Physical security tokens (2FA)

Physical security tokens generate one-time passwords or cryptographic keys for secure system access. These range from USB devices to smartphone apps that create time-based authentication codes.

Benefits of security tokens

Fractional ownership breaks down barriers that have existed for centuries. Premium assets that required millions in capital are now accessible to regular investors. You can own pieces of multiple commercial properties, startup equity, and rare collectables with the same ease as buying stocks.

Global market access eliminates geographical restrictions and time zone limitations. Traditional markets close, but blockchain doesn't sleep. Your tokenised assets can trade 24/7 across global markets without the friction of traditional cross-border transactions.

Automation of compliance through smart contracts reduces costs and eliminates human error. Regulatory requirements, tax reporting, and investor protections get built into the token's code, creating compliance that scales automatically.

Liquidity transformation is perhaps the most revolutionary benefit. Assets that traditionally took months or years to sell can now trade instantly on secondary markets. Real estate, private equity, and fine art gain stock-like liquidity.

Cost efficiency removes layers of intermediaries and reduces transaction costs. No more armies of lawyers, brokers, and administrators for every transaction. Smart contracts handle the heavy lifting at a fraction of traditional costs.

Platforms like Polymesh are pushing these benefits even further with features like on-chain compliance engines and programmable permissions that make institutional adoption smoother and more secure.

Regulatory considerations

SEC and the Howey Test

The Securities and Exchange Commission uses the Howey Test to determine what qualifies as a security. The criteria are straightforward: investment of money in a common enterprise with the expectation of profits derived from others' efforts.

Most tokenised assets that represent ownership stakes or investment opportunities will qualify as securities, triggering registration requirements, disclosure obligations, and investor protection measures. This isn't a loophole-filled grey area - it's regulated financial territory.

The regulatory clarity actually accelerates adoption. Institutional investors and traditional financial firms know how to operate within securities regulations. Clear rules create confidence and capital flows.

Jurisdictional differences

The United States takes a securities-first approach, with the SEC actively regulating token offerings and secondary trading. The framework is comprehensive but creates predictable operating conditions for compliant projects.

The European Union has implemented the Markets in Crypto-Assets (MiCA) regulation, creating harmonised rules across member states. The approach balances innovation with investor protection, often providing clearer guidance than U.S. regulations.

Asia-Pacific markets show varying approaches, with Singapore and Switzerland leading in regulatory clarity while maintaining innovation-friendly environments. Each jurisdiction creates unique opportunities and compliance requirements.

Security Token Offerings (STOs)

STOs are essentially the grown-up version of ICOs, with legal structure and regulatory compliance baked in.

What is an STO?

A Security Token Offering functions like an Initial Public Offering but uses blockchain technology and tokenised securities instead of traditional shares. Companies raise capital by selling security tokens that represent equity, debt, or asset-backed instruments.

The process includes regulatory compliance from day one - securities registration, investor accreditation verification, disclosure requirements, and ongoing reporting obligations. It's the legitimate path for blockchain-based capital raising.

STOs attract institutional capital because they operate within familiar regulatory frameworks while providing blockchain's efficiency and transparency benefits.

Investing in STOs usually requires accredited investor status in most jurisdictions, though some offerings allow broader participation. Due diligence processes mirror traditional securities investments, with added technical considerations around blockchain infrastructure.

Real-world examples of security tokens

tZERO has tokenised equity in its own platform, creating a regulated marketplace for security token trading. Their approach demonstrates how traditional brokerage functions can operate on blockchain infrastructure.

Real estate tokenisation is exploding across multiple platforms. Properties in major cities worldwide are getting fractionalised, allowing investors to build geographically diversified real estate portfolios with minimal capital requirements.

The Polymesh ecosystem showcases institutional-grade security token infrastructure with built-in compliance, governance features, and identity management. Their projects span multiple asset classes and demonstrate enterprise adoption.

Tokenised traditional securities like bNVDA (representing NVIDIA stock exposure) show how existing public company shares can gain blockchain benefits while maintaining regulatory compliance.

Risks and challenges

Every revolutionary shift comes with growing pains, and security tokens are no exception. Here's what you need to navigate:

• Regulatory uncertainty - Despite improving clarity, rule changes, enforcement actions, and jurisdictional differences create ongoing compliance challenges for issuers and investors
• Market maturity - Limited secondary market liquidity, fewer service providers, and evolving best practices mean early participants face pioneer-phase risks
• Technology risks - Smart contract vulnerabilities, blockchain network issues, and custody challenges create unique security considerations at the intersection of traditional finance and bleeding-edge technology
• Token theft and fraud - Threats exist in both digital and physical contexts, making proper custody, security practices, and due diligence critical for protecting tokenised assets

Closing thoughts

Security tokens represent the maturation of blockchain technology beyond speculative trading into legitimate financial infrastructure. They're solving real problems - illiquidity, high barriers to entry, geographic restrictions, and inefficient intermediary systems that have plagued traditional finance for decades.

At this stage, the momentum surrounding security tokens suggests that security tokens will become a standard part of the financial landscape rather than a niche blockchain experiment. We're witnessing the early stages of a fundamental shift in how ownership and investment work.

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Wanting to stake ETH but don't have the full 32 ETH required? Enter Rocket Pool – the game-changing protocol that's making Ethereum staking accessible to everyone.

Founded in 2016 and launched on mainnet in October 2021, Rocket Pool breaks down the barriers to Ethereum staking by allowing anyone to participate with as little as 0.01 ETH. Or, if you want to run a node, you'll need 8 ETH (plus some RPL as collateral) instead of the standard 32 ETH.

In this guide, we break down everything you need to know about the protocol, including its two key tokens:

• RPL: The governance token that also serves as insurance for the protocol
• rETH: A liquid token that represents your staked ETH and automatically grows in value as rewards accumulate

By democratising access to staking, Rocket Pool stays true to Ethereum's vision of decentralisation while making it possible for anyone to earn rewards from securing the network, with no massive ETH holdings required!

How Rocket Pool works

Rocket Pool's design has three main components that work together to facilitate decentralised ETH staking: smart contracts, smart node network and minipools. 

The Smart Contracts Backbone

At the foundation of Rocket Pool lies a sophisticated set of smart contracts that govern all protocol operations. These contracts manage:

• Deposit pools where regular users stake their ETH
• The creation and management of minipools (validator nodes)
• The minting and burning of rETH tokens
• The staking and distribution of RPL rewards
• Protocol governance mechanisms

The smart contracts ensure that all operations happen in a trustless manner, removing the need for intermediaries and preserving the decentralised ethos of Ethereum. They incorporate various security measures, including extensive testing and multiple independent audits to safeguard user funds.

Key smart contracts include the Deposit Pool, Minipool Factory, and Token contracts. When users deposit ETH, the smart contracts either match them with node operators to create validators or mint rETH representing their stake and accumulated rewards.

Smart Node Network and Minipools explained

Rocket Pool's network consists of independent node operators running the Rocket Pool Smart Node software. This software interacts with the protocol's smart contracts and manages validator duties on the Ethereum network.

Node operators in Rocket Pool contribute 8 ETH (rather than the full 32 ETH required for solo staking), which is matched with 24 ETH from the protocol's deposit pool to form a standard 32 ETH validator. This validator unit is called a "minipool."

The process works as follows:

1. A node operator installs and configures the Smart Node software
2. They deposit 8 ETH and a minimum of 10% worth of ETH in RPL tokens as collateral
3. The protocol matches this with 24 ETH from regular stakers
4. A minipool (validator) is created and begins participating in Ethereum consensus
5. When the validator earns rewards, they are split proportionally between the node operator and the deposit pool

This system creates a symbiotic relationship between those who want to stake without running infrastructure (regular stakers) and those willing to operate nodes but don't have the full 32 ETH requirement (node operators).

The minipool design is particularly innovative because it allows for fractional validator ownership while maintaining security through RPL collateral requirements. If a node operator behaves maliciously or negligently, their RPL collateral can be slashed, protecting regular stakers from potential losses.

Understanding RPL and rETH

As mentioned earlier, Rocket Pool's ecosystem revolves around two main tokens, each serving specific functions within the protocol. 

What is RPL used for?

RPL (Rocket Pool Protocol Token) is the native utility and governance token of the Rocket Pool protocol, designed to align the interests of node operators with the long-term success of the protocol. Unlike rETH, which represents staked ETH, this ERC-20 token serves several specific functions:

1. Node operator collateral: Node operators must stake a minimum of 10% of their ETH value in RPL tokens as security against wrongdoing. This collateral can be slashed if the node operator behaves maliciously, protecting the protocol and its users.
2. Insurance mechanism: The RPL staked by node operators creates a protocol-wide insurance fund that helps secure user deposits and maintain trust in the system.
3. Additional rewards: Node operators can stake up to 150% of their ETH value in RPL to receive proportional RPL rewards, incentivising greater security deposits and alignment with protocol success.
4. Governance: RPL token holders have voting rights on protocol upgrades, parameter changes, and other governance decisions through the Rocket Pool DAO.

What is rETH and how does it work?

rETH is Rocket Pool's liquid staking token that represents staked ETH plus accumulated rewards. These automatically increase in value relative to ETH through a changing exchange rate rather than requiring separate reward claims.

How to stake ETH with Rocket Pool (step-by-step)

Staking ETH with Rocket Pool as a regular user (not a node operator) is straightforward and accessible to anyone with an Ethereum wallet. Here's a guide to getting started:

Option 1: Using the Rocket Pool dApp

1. Connect your wallet: Visit the Rocket Pool website and navigate to the staking interface. Connect your Ethereum wallet (MetaMask, WalletConnect, etc.).
2. Determine your stake amount: Decide how much ETH you want to stake (minimum 0.01 ETH).
3. Approve the transaction: After reviewing the details, confirm the transaction in your wallet. This will swap your ETH for rETH at the current exchange rate.
4. Receive rETH: Once the transaction is confirmed, you'll receive rETH in your wallet, representing your staked ETH plus future rewards.

Option 2: Using decentralised exchanges

1. Access a DEX: Open a decentralised exchange that supports rETH/ETH pairs (Uniswap, SushiSwap, Balancer, etc.).
2. Execute the swap: Trade your ETH for rETH through the exchange interface.
3. Store your rETH: Keep your rETH in your wallet or utilise it in compatible DeFi protocols.

Monitoring your stake

Once you hold rETH, your rewards accumulate automatically through the increasing exchange rate between rETH and ETH. To monitor your rewards:

1. Check the current rETH/ETH exchange rate on the Rocket Pool website or through blockchain explorers.
2. Calculate the difference between the current value of your rETH holdings and your initial investment.

Remember that you don't need to claim rewards separately - they're built into the increasing value of your rETH tokens. When you eventually want to unstake, you can simply swap your rETH back to ETH through the Rocket Pool interface or a decentralised exchange.

How to become a Rocket Pool node operator

For those with technical expertise and a desire to become more actively involved in Ethereum's consensus mechanism, becoming a Rocket Pool node operator offers an opportunity to run validators with reduced capital requirements while earning additional rewards.

Prerequisites:

• 8 ETH for each minipool (validator) you wish to create
• At least 10% of your ETH value in RPL tokens as collateral (for maximum rewards, up to 150%)
• A computer or server that meets the minimum requirements:
  
  • 4+ CPU cores
  • 8+ GB RAM
  • 100+ GB SSD storage
  • Stable internet connection
• Basic command line knowledge
• Understanding of Ethereum staking principles

Step-by-step process:

1. Set up your hardware and operating system: Either use a dedicated machine or a cloud service provider. Most node operators use Linux-based systems.
2. Install Ethereum clients: Set up an execution client (Geth, Nethermind, etc.) and a consensus client (Prysm, Lighthouse, etc.).
3. Install Rocket Pool Smart Node software: Follow the detailed instructions on the Rocket Pool documentation site to install the node software.
4. Configure your node: Set up network settings, client preferences, and MEV-boost options if desired.
5. Deposit ETH and RPL: Use the node software to deposit your 8 ETH and the required RPL collateral.
6. Create your minipool: Once your deposits are confirmed, create a minipool which will be matched with 24 ETH from the deposit pool.
7. Monitor and maintain your node: Keep your system updated, monitor performance, and participate in protocol governance if desired.

The future of Rocket Pool

As Ethereum continues to evolve, Rocket Pool is positioning itself for sustained growth and adaptation. In coming years, several key developments and trends will likely shape its trajectory.

Protocol upgrades:

The Rocket Pool development team has outlined an ambitious roadmap with several major upgrades:

• Saturn upgrade series: A comprehensive set of improvements focusing on scalability, capital efficiency, and user experience. The Saturn upgrade is a multi-phase initiative, with Saturn 0 completed and further phases underway.
• Distributed Validator Technology (DVT): Implementation of validator key distribution across multiple operators, enhancing security and reducing single points of failure.
• Greater MEV optimisation: Advanced strategies for maximising Maximal Extractable Value for stakers while maintaining ethical standards.
• Cross-chain expansion: Potential expansion to other proof-of-stake networks or layer-2 solutions that require validation services.

Scaling with Ethereum:

As Ethereum implements its scaling roadmap, Rocket Pool will adapt to support:

• Danksharding and proto-danksharding implementations
• Increasing validator requirements as Ethereum grows
• Adjustments to staking economics as Ethereum's monetary policy evolves
• Supporting specialised validation roles that might emerge in Ethereum's future

Market position and growth:

While Rocket Pool currently holds a smaller market share than some competitors, its emphasis on decentralisation potentially positions it well for sustainable growth. Here are key aspects worth keeping an eye on:

• Increasing regulatory scrutiny may favour more decentralised staking solutions
• Growing community awareness of centralisation risks could drive users toward Rocket Pool
• The protocol's conservative approach to security and upgrades builds long-term trust

How to buy Rocket Pool (RPL)

If you’re looking to accumulate RPL, you can do so securely and easily through the Tap app. Simply download the app, create an account and complete the identity verification process. Once verified, you can buy RPL with a wide range of supported cryptocurrencies or fiat currencies (through debit card or bank transfer). Ready to dive into the world of staking, or just go along for the ride? Tap’s ready for you. 

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Euro Tether (EURT) is a euro-pegged stablecoin created by Tether Operations Limited, designed to maintain a 1:1 value with the euro. Think of it as the European cousin of the more famous USDT (Tether USD) - it's a digital token that aims to hold steady at one euro per token, making it useful for businesses, or just people who want to use crypto without worrying about wild price swings.

Built primarily on the Ethereum blockchain, EURT was developed to give European users and businesses a stable digital asset that mirrors the euro's value. However, there's an important twist to this story: Tether announced in November 2024 that EURT would be discontinued, with a redemption deadline of 27 November 2025, due to regulatory challenges in Europe and the implementation of the EU's MiCA regulations.

Who created EURT and why?

EURT comes from Tether Operations Limited, the same company behind USDT, which is currently the world's largest stablecoin by market cap, and a major player in the stablecoin space since 2014.

The reasoning behind creating EURT was straightforward: while USDT served dollar-based users well, there was a clear need for a euro-denominated stablecoin. European businesses, traders, and crypto users wanted a way to:

• Hold digital assets without exposure to crypto volatility
• Make fast, borderless payments in euros
• Access decentralised finance (DeFi) applications with euro-based assets
• Trade cryptocurrencies while maintaining euro exposure

Think of it like having a digital euro that could move as quickly as an email, without needing traditional banking infrastructure for every transaction.

How does EURT work?

EURT operates on a relatively simple principle that's common among centralised stablecoins. Here's how the process works:

Minting new EURT: When someone wants to create new EURT tokens, they deposit euros with Tether. In return, Tether mints (creates) an equivalent amount of EURT tokens. It's like exchanging physical euros for digital IOUs that can be used in the crypto world.

Burning EURT: When users want to redeem their EURT for actual euros, they send their tokens back to Tether. The company then "burns" (destroys) those tokens and returns the equivalent euros to the user's bank account.

Maintaining the Peg: Tether claims to hold euro reserves equal to the number of EURT tokens in circulation. This 1:1 backing is what's supposed to keep each EURT worth exactly one euro. If demand increases, more tokens are minted. If demand decreases, tokens are burned.

EURT primarily operates on Ethereum, but it has also been available on other blockchains like Solana and Binance Smart Chain, depending on user demand and technical considerations.

What was EURT used for?

Before its discontinuation announcement, EURT served several practical purposes in the crypto ecosystem:

Trading and avoiding volatility

Traders used EURT as a stable store of value when they wanted to exit volatile crypto positions without converting back to traditional banking systems. It’s like having a safe harbour during crypto storms.

Cross-border payments

EURT enabled fast, relatively cheap international transfers in euros. Instead of using traditional wire transfers, which can take days and incur significant fees, users can send EURT tokens across borders in minutes.

DeFi applications

EURT found a familiar home on DeFi platforms, used for lending, borrowing, and yield farming activities. Users could earn interest on their euro holdings or use EURT as collateral for loans.

Business operations

Some European businesses accepted EURT for payments or used it for treasury management, especially those already comfortable with crypto operations.

Why is EURT being discontinued?

This is where the story takes an interesting turn. On 27 November 2024, Tether announced that EURT would be phased out, with all tokens needing to be redeemed by 27 November 2025.

The primary reason? Europe's Markets in Crypto-Assets (MiCA) regulation, which came into effect in 2024. MiCA requires stablecoin issuers operating in the EU to meet strict compliance standards, including:

• Detailed regulatory reporting
• Specific reserve requirements
• Ongoing supervision by EU authorities
• Substantial compliance infrastructure

For Tether, the cost-benefit analysis didn't add up. EURT had a relatively small market capitalisation of around $27 million at the time of discontinuation, tiny compared to USDT's market cap of over $100 billion. The regulatory compliance costs and operational complexity of meeting MiCA requirements weren't justified by EURT's limited adoption.

It's essentially a business decision: the juice wasn't worth the squeeze for a product that hadn't gained significant market traction.

What's replacing EURT?

Tether isn't completely abandoning the European market. The company has partnered with Quantoz Payments to develop EURQ, a new euro-pegged stablecoin designed from the ground up to comply with MiCA regulations.

EURQ is being built with regulatory compliance as a core feature rather than an afterthought. This means it should be able to operate legally within the European Union's new regulatory framework without the compliance headaches that led to EURT's discontinuation.

However, EURQ is still in development, and there's no confirmed launch date yet. European users looking for euro-denominated stablecoins will need to explore other options in the meantime.

How does EURT compare to other stablecoins?

Understanding EURT's place in the stablecoin landscape helps explain both its purpose and its limitations:

EURT vs USDT (Tether USD)

USDT is EURT's dollar-denominated sibling and is massively more popular. While they work similarly, USDT benefits from the dollar's dominance in global trade and crypto markets. EURT never achieved anywhere near USDT's adoption levels.

EURT vs USDC (USD Coin)

USDC, issued by Circle, is generally considered more transparent and regulated than Tether's offerings. Circle regularly publishes detailed attestations of its reserves. EURT lacked this level of transparency and regulatory clarity.

EURT vs DAI

DAI is a decentralised stablecoin that's not controlled by a single company. While EURT required trusting Tether's reserves and management, DAI is backed by crypto collateral and governed by a decentralised community. However, DAI is primarily dollar-pegged.

EURT vs VNX VEUR

VNX VEUR is another euro-pegged stablecoin that's designed to be MiCA-compliant from the start. Unlike EURT, it was built with European regulations in mind and continues to operate in the EU market.

How to sell or convert EURT (if you still hold it)

If you currently hold EURT tokens, you have until 27 November 2025 to redeem them. A word of warning: try not to wait until the last minute as liquidity for EURT may decrease as the deadline approaches, potentially making it harder to convert at favourable rates.

You can sell or convert EURT on most major platforms. 

The bottom line on EURT

Euro Tether represented an interesting experiment in euro-denominated stablecoins, but it ultimately couldn't overcome the challenges of regulatory compliance and limited adoption. However, not all is lost: its discontinuation highlights the growing importance of regulatory clarity in the crypto space, especially in Europe.

For users who relied on EURT, the transition period provides time to move to alternative solutions. The development of EURQ and other MiCA-compliant euro stablecoins suggests that demand for euro-denominated digital assets remains strong - it's just a matter of building products that can thrive in the new regulatory environment.

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Ready to cut through traditional banking barriers and dive into the world of crypto payments? From buying falafels at your local cafe to luggage from a store in Japan, crypto payments are fast, cost-effective, and easier than you can imagine. 

In this guide, we will walk you through exactly how to pay with crypto - from opening your account to making your first transaction. By the end, you'll have the confidence to make crypto payments anywhere, anytime.

Is paying with crypto legal?

Let's address the elephant in the room first. Paying with crypto is legal in most major markets, including the United States, the European Union, Canada, and the UK. However, some countries, like China and India, have restrictions on crypto transactions.

Here's the global snapshot:

• Fully legal: US, EU, UK, Canada, Australia, Singapore, Switzerland
• Restricted or banned: China, India (limited use), Russia (complex regulations)
• Grey areas: Some developing nations with evolving frameworks

Why does this matter? Operating within legal boundaries protects you from compliance issues and ensures your transactions won't be flagged or reversed. Rest assured, Tap only operates in jurisdictions where crypto payments are fully compliant.

How crypto payments work

Think of crypto payments like sending an email instead of traditional mail. With email, your message goes directly from your computer to the recipient's inbox through the internet. 

Similarly, crypto payments travel directly from your cryptocurrency wallet to the merchant's wallet through a blockchain network - no banks or financial middlemen required.

Here's what happens behind the scenes:

• Your payment gets recorded on a decentralised ledger (blockchain)
• Multiple computers verify the transaction
• Once confirmed, the payment is permanent and irreversible
• The entire process typically takes minutes, not days

This system eliminates the need for banks, reduces fees, and works 24/7 globally.

Common payment methods

There are several ways to pay with crypto, each suited for different situations. Here are the two most popular:

On-chain wallet transfers involve scanning a QR code or copying a wallet address to send payments directly from your wallet to theirs. This method works well for peer-to-peer transactions and in-store payments. As a side note: Tap users can enjoy free transfers between users, anywhere in the world.

Tap’s crypto-backed debit card lets you spend your crypto anywhere Mastercard and Visa are accepted. The card automatically converts your crypto to fiat at the point of sale.

Setting up your Tap account

Here’s how to get started:

1. Download the app and create your account.
   
   
2. Complete the quick identity check.
   Since Tap is licensed and regulated, we ask for some basic verification - just like any trusted fintech app. It only takes a few minutes.
   
   
3. Once you're approved, you're in.
   You’ll be ready to explore the crypto world.

Order your Tap card
Tap the “Card” tab in the app (between Hub and Cash), and follow the steps to order your card. It’ll arrive in a few days, depending on where you are.

Now all you need is crypto.
Topping up your wallet is simple.
To load fiat (USD, EUR, GBP, AUD, CAD, CHF, JPY), tap “Cash” in the top menu and hit the black “Add Money” button. Choose your preferred method and follow the instructions.

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If you already have crypto, select Cryptocurrencies from the top menu, Add Money, and then the last option (Crypto Deposit). It’ll take a few minutes to clear (depending on the network).

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When your card arrives, move funds to the Card section of your wallet, and you’re all set. 

Step-by-step: how to make a crypto payment with Tap

Ready to make your first crypto payment? Let’s get stuck in:

Step 1: Take your Tap card out of your wallet.

Step 2: Swipe or tap at the merchant. 

That’s it. Couldn’t be simpler. 

Making a crypto payment through the app

If you don’t have a card or are waiting for it to arrive, here is the alternative option:

Step 1: Go to the “Cryptocurrencies” section of the app.

Step 2: Tap on “Send”.

Step 3: Choose “Crypto Withdrawal”.

Step 4: Pick the crypto you’d like to use.

Step 5: Tap the blue + New icon in the upper right corner.

Step 6: Choose “External Beneficiary” and carefully enter the wallet address.

Step 7: To complete the transfer, select the Beneficiary you just added and initiate the transfer.

Most payments are confirmed within minutes, though some networks may take longer during high-traffic periods.

Converting crypto to fiat & using crypto cards

Not every merchant accepts crypto directly, but that doesn't limit your spending power. Tap offers seamless conversion options that bridge the gap between crypto and traditional payments.

Our instant conversion feature lets you convert crypto to fiat currencies within your Tap account. Simply select the amount you want to convert, choose your target currency, and confirm the transaction. The converted funds appear in your fiat balance immediately.

The Tap Card takes this further by allowing you to spend crypto anywhere Mastercard and Visa are accepted. When you make a purchase, the card automatically converts the required amount from your crypto balance to fiat at competitive exchange rates. You can use it for online shopping, in-store purchases, or ATM withdrawals globally. Simply load the money onto your card through the app, and we’ll handle the rest.

Conversion happens in real-time, so you always get current market rates. *For real-time FX rates, click on your profile picture on the homepage and scroll down to “FX Calculator". 

Fees, speeds & network choices

Understanding fees helps you make cost-effective payment decisions. There are two types of fees to consider:

Network fees go to blockchain validators who process your transaction. These vary by network and have nothing to do with Tap.

Bitcoin during peak times might cost $10-50, while networks like Polygon often cost under $0.01. Lightning Network Bitcoin payments typically cost less than a penny.

Tap fees are transparent and competitive. We charge a small percentage for conversions and premium features, but basic payments between Tap users are free.

Confirmation times depend on your chosen network:

• Lightning Network: Instant
• Ethereum: 1-5 minutes
• Bitcoin: 10-60 minutes
• Polygon: Under 1 minute

Best practice: For small, everyday purchases, use fast, low-cost networks like Lightning or Polygon. For larger transactions where security is important, Bitcoin's main network offers maximum security despite higher fees.

Security & common pitfalls

Crypto payments are irreversible, making security crucial. Here are the main risks and how to avoid them:

Wrong addresses are the top cause of lost payments. Always double-check recipient addresses and use QR codes when possible. Try to avoid typing wallet addresses manually unless necessary.

Phishing attacks trick users into entering wallet details on fake websites. Always bookmark legitimate sites and verify URLs carefully. Do not follow links from emails or text messages.

Rug pulls and scam projects promise unrealistic returns. Stick to established cryptocurrencies and verified merchants when making payments.

Tap's built-in safeguards include two-factor authentication and automated AML checks that flag suspicious transactions. 

Tax & reporting considerations

Here's something many users overlook: spending crypto is a taxable event in most jurisdictions. When you use crypto to buy goods or services, you're technically selling that crypto, which may trigger capital gains tax.

How it works: If you bought Bitcoin at $30,000 and spent it when Bitcoin was $40,000, you owe tax on the $10,000 gain, even though you used it for a purchase rather than selling for cash.

Record-keeping is essential. To stay on the safe side, keep records of your transactions that include purchase dates, sale dates, amounts, and calculated gains or losses.

Regional differences matter:

• United States: IRS treats crypto spending as taxable events with capital gains implications
• European Union: VAT applies to crypto purchases, but capital gains treatment varies by country
• Other regions: Consult local tax advisors as regulations continue evolving

We recommend consulting with a crypto-savvy accountant to ensure you’re on the right side of your local tax obligations.

Why choose Tap to pay with crypto

We've built Tap specifically to solve the pain points of crypto payments. Here's what sets us apart:

Instant settlement means merchants receive payments immediately, not after blockchain confirmations. This solves the biggest barrier to crypto adoption for businesses.

Multi-chain support lets you use Bitcoin, Ethereum, stablecoins, and 60+ other cryptocurrencies through a single platform. No need to manage multiple wallets or apps.

Built-in compliance handles KYC/AML requirements automatically, so you can focus on payments rather than paperwork. We operate within regulatory frameworks. 

Global reach without the complexity of international banking. Accept payments from anywhere, settle in your preferred currency, and expand your market instantly.

Ready to start paying with crypto? Download the Tap app and join the future of digital payments.

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