Custody and cash · 21 / 86 · 2 min
Fiat on-ramps and off-ramps
An on-ramp turns dollars into coins. An off-ramp turns coins back into dollars. Both ends are usually companies, with bank accounts, checks, and the power to stop.
Each box is a company that can stop the transfer. The chart price is not the price you get.
A worked case
A person buys at the price on a chart. The card payment is declined after the coins were promised, or the spread is three percent and never shown next to the chart. Getting back to dollars takes a second company, with its own right to hold the payment.
Where it stops
The bank can refuse the transfer. The ramp can hold the coins for a review. The exchange can ask for more documents after you have already sent money.
The cost
The headline rate is not the only cost. There is a spread, a card fee, and sometimes a worse price than the chart you were looking at.
If you cannot get back to dollars, you do not control the exit. Know the exit before you need it.
The chart price is not the card price
An on-ramp turns dollars into coins. An off-ramp turns them back. Both ends are usually companies with bank accounts. The price you were looking at on a chart is a market. The price the card charges includes a spread, sometimes a cash-advance style fee, and a worse rate than the mid price. People notice on the way out, when the dollars that return are smaller than the dollars that left, even though the coin went nowhere dramatic.
Banks also stop transfers. A payment to a crypto firm can be declined, held, or reversed. In Britain and elsewhere, card schemes and banks have turned crypto purchases on and off. The FCA's consumer research is useful here for a different reason: most people who hold any crypto did not get it by running a node. They bought it through an app. That app can refuse the return trip.
Name the company at each end before you send dollars. If you cannot get back to dollars, you do not control the exit. Know the exit while you still have one.
Read it yourself
These links are the record. They are not a recommendation, and they are not instructions. A news story or a court paper can still be wrong about a detail. The check does not change because a famous name is in the story.
Apply the check
Open a question. The line is about this topic. It is not a verdict that anything is safe.
The ramp, the card network, and the exchange.
Those companies, and your bank.
Any of them, by refusing the transfer or the withdrawal.
Check yourself
Is the chart price the price the on-ramp will give you?
Often no. Spread and fees sit on top.
After this you can name the company at each end, and the fee, before you send dollars.