"At its core, PayFi is more than just a technological evolution; it's a movement toward a fairer and more interconnected financial system." - On December 19, PolyFlow, the first modular PayFi infrastructure, held the third "PayFi Spotlight" series of AMA events, delving into the intersection of payment finance (PayFi) and compliance in the evolving world of cryptocurrency. The event brought together leaders of compliant centralized exchanges (CEX) from different regions around the world, including Klickl, Virgo Group, Transak, and OSL. These experts shared their views on PayFi's challenges and opportunities in compliance , opportunities in emerging markets , and a look ahead to the development of compliance policies in 2025 , providing valuable insights into how compliance trends affect the cryptocurrency industry.
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Chuck Zhang (CFO, PolyFlow): With over 15 years of investment banking experience, Chuck leads PolyFlow’s efforts to develop decentralized payment infrastructure, eliminate custodial risks, and drive global adoption of PayFi.
Guests
Michael (CEO, Klickl): Michael founded Klickl, a Web3 open banking platform that integrates the business models of Stripe and Revolut into the blockchain ecosystem. Klickl's goal is to democratize financial services and provide global accessibility and efficiency.
Adam (CEO, Virgo Group): Adam leads Virgo Group, a Canada-based cryptocurrency trading platform that provides retail and OTC trading. Virgo’s Virgo Pay initiative aims to build a stablecoin-based payment network to simplify cross-border transactions.
Max (General Manager, Transak): Max is responsible for partnerships at Transak, the leading crypto payment gateway. Transak specializes in deposit and withdrawal solutions, helping millions of users around the world to seamlessly switch between fiat and crypto.
Sean (Global Head of OTC Business Development, OSL): Sean leads the OTC business development team at OSL, Hong Kong’s first regulated virtual asset exchange. OSL focuses on large-scale liquidity solutions and compliant crypto services.
PayFi's mission: to provide financial interaction for the whole world
PayFi, which bridges the global financial gap, is more than just another buzzword; it represents a profound change in the way the financial system works. As Klickl CEO Michael explains, the term embodies the connection between decentralized systems and the traditional financial world. Klickl's mission of "Click and Connect" summarizes PayFi's goal: to make financial interactions seamless, affordable, and convenient for everyone around the world.
Adam of Virgo Group echoed this sentiment, highlighting the transformative power of stablecoins in facilitating global payments. He described Virgo’s vision for a stablecoin-based network that aims to help individuals easily send money around the world without having to have a deep understanding of blockchain or cryptocurrencies.
Max provided a unique perspective, comparing PayFi’s approach to decentralized banking to the proliferation of smartphones. “We want to ensure that every user in the world has the best bank in their pocket through blockchain and PayFi,” he said. This highlights how PayFi removes barriers for the unbanked and underserved populations around the world.
Compliance Dilemma: A Balanced Approach
A recurring theme in the AMA discussion was the tension between innovation and regulation. Compliance was described as both a necessity and an obstacle, with all speakers acknowledging its key role in legitimizing the crypto space. However, compliance remains a challenging area.
OSL’s Sean stressed the importance of compliance in building trust: “Having regulation creates a ton of trust…it allows our customers and partners to focus on their own innovation.” For centralized exchanges like OSL, early adoption of regulatory standards helps create a stable environment for growth and innovation.
Adam offered a counterpoint, pointing out the restrictive nature of traditional financial institutions. He described how strict regulation tends to slow down innovation, especially for cryptocurrency exchanges. However, he expressed optimism that PayFi will be able to reduce regulatory burdens through a non-custodial model and smart contract settlement.
Max offered a pragmatic perspective, emphasizing the transparency of blockchain. “Today’s crypto industry is already the most compliant industry,” he argued, arguing that blockchain technology can simplify the compliance process in a way that traditional finance cannot.
Emerging markets: fertile ground for PayFi
Africa, Latin America, and parts of Asia are the biggest opportunity markets for blockchain financial solutions due to outdated banking systems and high remittance fees. Sean pointed out that emerging markets have the unique potential to "leapfrog" traditional banking infrastructure and directly adopt blockchain solutions. He emphasized the importance of reducing transaction costs and increasing payment speed in these regions.
Michael shared Klickl’s hyper-growth strategy in Africa, noting that local currency devaluation and underbanked services make cryptocurrency adoption not just a choice, but a necessity. “Holding cryptocurrency is not a choice, it’s a necessity,” he said, highlighting the urgency of advancing financial innovation in underserved regions.
Max further expands on this vision, arguing that PayFi can provide everyone with a stable, transparent currency option. “The most immediate impact is that everyone in the world will have a stable currency bank account,” he said, envisioning a future where cross-border payments are easy, convenient, and affordable.
Standardization: The way forward
The need for global standardization emerged as a key point in the discussion. While compliance is necessary, all speakers agreed that inconsistent regulation across regions makes innovation and adoption more difficult. Max offered a grim prediction that regulation may “get worse before it gets better” as countries prioritize their own rules. However, he also highlighted efforts such as the European Union’s Markets in Crypto-Assets Act (MiCA) as steps toward harmonization.
Adam suggested that PayFi could serve as a unifying framework to connect different players while protecting important banking relationships. He stressed the importance of creating standardized processes, especially when it comes to handling fiat deposits and withdrawals. He believes that this will not only increase trust but also promote global cooperation.
Michael offered an optimistic view that Web3 players can collectively rely on a small number of service providers to create a more coordinated compliance effort. He said this would shorten the KYC (Know Your Customer) and KYB (Know Your Business) processes, thereby accelerating adoption.
Building a World Where Every Deal Counts
The AMA showcased the panelists’ shared optimism about PayFi’s transformative potential. While compliance remains a hurdle, blockchain’s inherent transparency and efficiency provide the tools to address these challenges. Clarification and standardization of global compliance is urgent. Emerging markets, in particular, stand to gain significantly as PayFi unlocks new opportunities for inclusion and growth.
At its core, PayFi is more than just a technological evolution; it’s a movement toward a fairer, more connected financial system.
As Michael aptly summed it up: “Hopefully one day, people won’t need to understand deposits and withdrawals anymore. It will be simple: how to receive money, how to convert currency, how to pay currency.”
Through collaboration, innovation, and a commitment to compliance, PayFi has the potential to redefine global finance. Together, we are building a world where every transaction matters — a future worth fighting for.
