How SEPA Transfers Facilitate the Adoption of Crypto in Europe

The growing adoption of crypto in the world is evident - the world’s largest banks (Morgan Stanley, Goldman Sachs, and others) open trading desks to meet the needs of crypto-oriented clients. Some banks launch CBDC (Central Bank Digital Currency), which is centralized and controlled by the central bank. Examples include the Bahamas' Sand Dollar and China's Digital Yuan (e-CNY).

Payment processors like PayPal integrate crypto for easy, cheap, and quick money transfers, meeting the requirements of crypto-savvy clients. The analytic software company MicroStrategy is the largest Bitcoin holder, owning 226,500 Bitcoins (as of mid-summer 2024).

The crypto adoption by financial giants, banks, and tech companies drives the overall acceptance of digital assets among individuals. Headlines and social media posts by large companies buying cryptocurrencies propel the crypto adoption, motivating small investors to join in. With the buzz around digital assets, there is a need for an accessible, straightforward, and cheap way to enter the market. This method exists, and it is called SEPA (Single Euro Payments Area).

SEPA Explained

SEPA is a system operating in the EU and some other countries, aimed at simplifying money transfers between individuals living in the EU zone. The system is available in 36 countries, including the Eurozone (Austria, Germany, etc.), non-EU participants (Iceland, Norway, etc.), and EU members that do not use euros in their settlements (Croatia, Bulgaria, Poland, Sweden, etc). These countries' residents can freely transfer money across Europe as if they were making domestic payments.

The advantages of SEPA include:

●      easy to handle even for a beginner user;

●      cheap transactions;

●      no need to wait long;

●      cross-border transfers with no barriers;

●      reliability and security;

●      complete compliance;

●      available for buying crypto;

●      suitable for regular payments and lightning-fast transactions.

Below, we will consider these advantages in more detail and see how they form the broader crypto adoption in Europe. Now, let’s see how SEPA transfers work when buying crypto.

SEPA transfers for Buying Cryptocurrency

Here is a step-by-step guide on how to buy crypto with SEPA:

1. First of all, you need to make sure you have a euro bank account in a European bank that supports SEPA payments. If you have an account but use another currency, consider additional fees for conversion to euros.
2. Find a crypto exchange that supports SEPA transfers.
3. Register with the chosen exchange. It will also include passing a KYC verification to confirm your identity.
4. Link your bank account to the exchange account. In the deposit settings, add your IBAN; the platform may ask you to confirm your account by conducting a verification transfer (as a test).
5. Enter your crypto account and initiate the transfer. Use SEPA as a deposit method and include the reference code provided by the crypto platform.
6. Next, enter the amount of euros you want to transfer. 
7. Review details and confirm the transfer. Depending on your SEPA type, it may take a few seconds to a few days.
8. Once euros arrive in your exchange account, go to the trading section and choose the crypto asset you want to buy. Find the pair BTC/EUR, ETH/EUR, or other.
9. Enter the amount of crypto coins you wish to buy, and see the current rate and the fees associated with the purchase.
10. Double-check and confirm the order.

Types of SEPA Transfers

When filling out the application, you will be asked to choose among three payment types:

●      Direct debit transaction - typically used for recurring payments, such as subscriptions, etc. This payment comes in two types: Core Direct Debit (between individuals) and B2B (for business). It takes 2-3 days to complete such transactions.

●      Credit SEPA transfer takes one business day to complete and usually requires IBAN and BIC codes.

●      Instant SEPA payment - the fastest - takes a few seconds to complete and is available 24/7. Unlike the two previous SEPA types, Instant transfer is not affected by national holidays or weekends.

The Role of SEPA in Facilitating Cryptocurrency Investing in Europe

Let’s see how SEPA facilitates the cryptocurrency investments in the EU:

●      SEPA makes cross-border transactions as easy as ever before. European residents may register with a crypto exchange, attach their bank account, and use their money for investing in crypto with no delays or barriers, which typically come with international money transfers.

●      Initially, SEPA transfers come with low fees, making crypto investments available and cost-efficient.

●      Security is the main concern for crypto investors. SEPA ensures a high level of client protection and security. The system operates with regulated crypto exchanges and traditional banks, leaving no chance for fraud or unauthorized access. That is a transparent and reliable system for bank clients and crypto investors.

●      Having instant transfer, SEPA ensures the money is delivered in a matter of seconds, which is crucial for crypto investors or traders who need to capitalize on the market opportunity here and now with no delay.

Ensuring secure, fast, and cost-efficient payments, SEPA attracts more and more users in the Eurozone, spurring the adoption of crypto assets in the region. What makes it especially attractive is the ease of use, which is highly valued by beginner investors entering the world of crypto.