If you have made some profits on your crypto investments and would like to “cash out”, you might be wondering which is the best way to do so to incur the least transaction fees. Here are a few ways that you can off-ramp your crypto to fiat money.
Spending Your Crypto
This might sound counter intuitive but it is true — certain companies/shops out there accept payment for their goods via the tokens you own.
For example, Tesla is currently accepting payment in $DOGE and countries such as El Salvador do accept cryptocurrency as its legal tender. Some other companies that accept cryptocurrency payments are Microsoft, Paypal and Rakuten.
Off-ramp via an exchange
Just like how you on-ramp your fiat currency into the CEXs, most centralized exchanges allow you to off-ramp as well.
Before you go ahead and choose the CEX you might want to on-ramp to, make sure the exchange supports the fiat currency you would like to off-ramp to.
Most conversions include an exchange fee, so it really boils down to which exchange you choose to use.
This can be as simple as selling the cryptocurrency you own and have the corresponding fiat equivalent paid to your bank account.
One exchange that does this well is Crypto.com. They offer a Visa prepaid card that you can use in off ramping your funds and is one of the most seamless process out there.
Take note, the off-ramp process might take a few days, and it is not as liquid as the money you have in your traditional banks.
In the P2P system, you are able to on-ramp fiat currencies with individuals who plan to off-ramp.
Make a bank transfer of the amount you wish to on-ramp, and the other party will transfer you the equivalent amount in a stablecoin.
This is the fastest way to on-ramp and off-ramp, and the process would take less than 5 minutes to complete. You do not have to wait for days in receiving your funds.
However, there comes a risk, and a loophole in this system which is being exploited. This system gave birth to money laundering acts where syndicates utilize the P2P system to remove trace of illegal funds.
In Singapore, big centralized exchanges like Binance and Huobi have had to stop operations in Singapore when their P2P systems were flagged as a breach to monetary laws.
Users of the platforms then had to shift their crypto funds out of one CEX to another to continue trading, so take note on the approved exchanges available in your country.