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Imagine, your project’s initial coin offering was a huge success. Your crypto-wallets are brimming with Bitcoins, Ethers and other cryptocurrencies. It is indeed a time for celebration and for utilising the collected funds.

However, a significant pitfall is irrespective of how much you raised in cryptocurrencies, a lot of settlements would require fiat currencies like the US dollar or euro. Whether there are legal settlements, PR-campaigns, rent, bills you would require to cash out your cryptocurrencies.

While some advertising agencies and legal firms might accept crypto-payments, most third parties, as well as your own employees, will require payments in local currencies. The conversion of cryptocurrencies to fiat, when it comes to large amounts, is a painstaking process.

Complication involved in the Process

A lot of banks globally are exploring and utilising Blockchain technology, but a majority of banks are still sceptical about adopting Blockchain, as they don’t like anything involved with cryptocurrencies. Head of the world’s biggest banks ( J. P Morgan and Co,Jamie Damon)   have labelled cryptocurrencies a fraud. If you are lucky to find a bank, that would agree with your business proposal, it would require months of paperwork and legal deliberations.

Banks would require your projects to be compliant with Anti Money Laundering (AML) and Know Your Customer(KYC) policies. The bank’s representatives can knock your door for finding how clean are your funds and can inquire about the source of wealth. Each contribution however small will be required to verify virtually.

The process of cashing out on an exchange is equally complicated too.It requires a bank account linked to your profile , to withdraw funds from an exchange. After a long verification period a new barrier is to find a suitable and trusted exchange. The exchange should be operating in your local fiat currency.There are perils to keeping your funds in a wallet provided by an exchange. There have been several instances of exchanges being hacked and people losing money stored on them.

Cashing out small amounts

Trying to cash out the entire $12 million you have raised, will be a nightmare, it will build a lot of suspicion and will result in your project being investigated by authorities. An appropriate strategy would be cashing out the required amounts the project needs every month.

There are a few ways of going about it:

  1. You can sell the required amount of crypto on a suitable exchange and even withdraw the fiat equivalent to a bank account.
  2. Utilise  peer-to-peer exchanges such as LocalBitcoins and LocalEthereum
  3. Use payment processors that enable cryptocurrency to bank account payments for legal fees, rent and income and skip the process of opening a bank account altogether. For instance: SpectroCoin, SpicePay, and many others.
  4. Get a prepaid Visa or MasterCard for yourself or your employees that can be topped-up with cryptocurrencies and utilise it to settle online and offline payments at bricks-and-mortar stores using any Point Of Sale (POS). You can acquire one of those via  TenX, Monaco, Bitwala and others.
  5. Your employees and service providers can be paid in cryptocurrencies and instructions can be provided to them regarding the withdrawal of funds, with a mutual pre-agreement.

Cashing out big amounts

There is no one-stop solution for cashing out significant amounts of funds raised through an ICO. Although Bitwala is currently creating a platform that is supposed to offer ‘a banking experience which will merge the crypto and fiat worlds’.

Here is a rather  small list of countries with a positive attitude to ICOs which will be ready to open a bank account for your project’s needs:

  • Singapore
  • Switzerland
  • Cayman Islands

Supriya holds a masters degree in Applied Physics. She has a keen interest in exploring new technologies and expresses her curiosity by writing for various technology platforms. She is an avid follower of Blockchain technology. She strongly believes that blockchain will bring lasting transformations in people's lives in the years to come.

Supriya holds a masters degree in Applied Physics. She has a keen interest in exploring new technologies and expresses her curiosity by writing for various technology platforms. She is an avid follower of Blockchain technology. She strongly believes that blockchain will bring lasting transformations in people's lives in the years to come.

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