Zap, a Lightning Network payments startup backed by Visa, announced the rollout of Strike Global, a payments and remittances app using the Bitcoin layer-two technology.
It has been reported that an announcement by Jack Mallers, the CEO of Zap, goes in-depth into the differences between standard fiat transfer mechanisms and the Lightning-powered mechanism in Strike Global.
However, Mallers focused on remittances, a multibillion-dollar business that is still largely passed through expensive middlemen.
The report said that Strike Global is not too unlike traditional fintech apps, but it uses the Lightning Network for settlement, which means that payments can be essentially instantaneous and at a fraction of the cost of traditional payment rails.
A world where sending #Bitcoin payments instantaneously on Layer-2 solutions is becoming a reality thanks to @JackMallers. His app, Strike Global, will power a new generation of cross-border payments. https://t.co/SySV88pxaS — Cointelegraph (@Cointelegraph) January 8, 2021
It has been analyzed that Strike Global has two types of transfers, depending on the recipient’s location. For countries with a developed banking system, Strike allows users to send payments without going through Bitcoin (BTC) themselves.
Likewise, Strike will automatically withdraw money from the user’s bank account, exchange it into BTC, and then exchange it back into the recipient’s fiat currency and banking system.
The system largely piggybacks off the existing Bitcoin exchange infrastructure, which already allows for much cheaper, simpler remittances if users are willing to go through them manually.
Since national exchanges are usually integrated with the local banking system by using Bitcoin or other cryptocurrencies allows much cheaper conversion rates compared with cross-border banking.
According to the report, Strike allows users to hold their money either in Bitcoin or Tether (USDT). The cryptocurrency can then be exchanged into local cash or fiat through ad-hoc solutions like Bitcoin ATMs, LocalBitcoins, and others. Strike simplifies many of the exchange processes in the back end to make the experience similar to other fintech apps.
It has also been analyzed that Zap partnered with Bittrex to onboard the exchange’s users on Strike and the Lightning Network, as in the first quarter of 2021, it expects to complete private and public beta tests, as well as issue Strike Visa cards in the United States. In the second quarter, it expects to launch cards in the European Union and the United Kingdom.
Thus, the rollout comes as businesses begin increasing the adoption of newer Bitcoin technologies.
Source: Cointelegraph