Crypto exchange Bitstamp is expanding its white-label service, which enables institutions to fast-track their digital assets offerings to customers.
Known as “Bitstamp-as-a-Service,” the white-label offering officially launched in 2021 and rolled out in the US earlier this year. The service enables institutions to develop a retail offering without needing to build out technology and compliance infrastructure or acquire specific licenses.
One of Bitstamp’s first partners for this service was Revolut back in 2017.
“In addition to Revolut, in 2020 and 2021 we added a fair number of European financial institutions, including banks, many of whom we were not really allowed to use their name because it's a true white label offering,” said Bobby Zagotta, CEO of Bitstamp Americas and Bitstamp’s chief commercial officer.
Bitstamp formally packaged the service when they started to receive a significant number of inbound requests from companies looking to roll out crypto services to clients.
A new tiered system
Now Bitstamp has expanded its offering, providing clients with three tiers to choose from: exchange, exchange plus and exchange complete.
The exchange tier offers clients the core building blocks of Bitstamp-as-a-Service while the exchange complete tier provides an end-to-end solution that includes know-your-customer and anti-money laundering operations as well as a global license network for servicing customers in multiple jurisdictions.
“We're able to plug into either a very scaled organization or an earlier stage organization in a fairly turnkey way,” Zagotta said.
Positioning for urgency
Using the tier system is new partner IRA Financial, a provider of self-directed retirement plans, that oversees $3.2 billion in alternative assets.
“Our clients did over $420 million in crypto trading last year and we expect that figure to accelerate with the Bitstamp-as-a-Service integration,” said Adam Bergman, founder of IRA Financial, in a company release. “It offers the enterprise security and infrastructure to support that growth.”
In the past partners used to view integrating with crypto services as just upside and an opportunity to expand customer relationships, Zagotta said.
“Now they see downside if they don't offer these crypto services,” Zagotta said. “They're going to start haemorrhaging clients, [they] are going to go-to some all-in-one platform and do their banking or their payments or whatever else, somewhere else.”
“There's tremendous urgency and they want to move quickly,” he added.
Playbook for market cycles
As other crypto exchanges publicly clamour for deals and acquisitions surrounding distressed assets, Bitstamp is taking a different tack focusing on product development.
“We've been at this a long time, so we have a playbook for these market cycles,” Zagotta said. “And we're running our playbook and basically, that playbook is manage our cost base with discipline, but then invest in the product basically. Continue to perfect the client experience and this is a moment where we can do that.”
The exchange has recently been brought on to assist Mount Gox creditors in the rehabilitation of assets and has also integrated with Apple Pay, Google Pay and PayPal to provide alternate funding methods on the exchange.
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