What will be the ideal crypto wallet experience of the future? The embrace of Web3 by traditional finance is an unstoppable trend.

At Binance Blockchain Week, guests from leading wallet and payment companies such as WalletConnect, Trust Wallet, and Mastercard focused on the ease of use of Web3, and discussed topics such as user experience optimization, stablecoin applications, and security challenges. Christian Rau, Senior Vice President of Mastercard, stated that traditional finance will coexist with Web3, bringing new progress to the financial industry.

The two-day Binance Blockchain Week Dubai 2024  was held in Dubai from October 30th to 31st. The conference, themed “Momentum,” focused on the rapid progress the blockchain industry has made in addressing challenges and achieving major milestones since the last conference in Istanbul. 

During the “Web3 Usability” dialogue session on the second day, several guests from the wallet and payment industries engaged in in-depth discussions on Web3 user experience optimization, stablecoins, and security, providing new perspectives for the future popularization and application of blockchain technology.

Guest list:

• Reown (formerly WalletConnect) CEO  Jess Houlgrave
• Trust Wallet CEO Eowyn Chen
• Mastercard Senior Vice President Christian Rau
• Joseph Cleetus, Assistant Vice President of Business Transformation at LuLu Financial Holdings

User experience challenges

The host first asked the guests whether the current user experience is user-friendly enough for newcomers to the Web3 field, and what the main challenges they face. In response, the guests shared their views on the current Web3 user experience and their needs for improvement.

Jess Houlgrave : I think we’ve really made a lot of progress; everyone no longer needs to memorize a mnemonic phrase and then go somewhere to top up their wallet. But even now, there are still too many complexities, such as managing different on-chain assets and understanding gas fees. She points out:

The Web3 industry needs to raise standards and improve the user experience to at least the level of Web 2.0, or even higher.

Eowyn Chen : In February of this year, we launched a smart contract wallet called SWIFT Wallet, which simplifies gas payments and private key management (using a passkey). She stated:

Users can create a wallet with just one click and facial recognition, without needing to worry about the technical details. Currently, more than 1 million wallets are in use, with a retention rate of over 50%.

Eowyn added that the wallet is particularly popular among some older groups in Europe who convert their cash savings into stablecoins for safekeeping because they distrust traditional banks. She stated:

This is practical, isn’t it? Self-management, owning your own assets. Although many people don’t know this, I believe the future is already here, it just hasn’t been widely understood yet.

Traditional finance combined with Web3 provides users with more choices

As a representative of traditional financial giants, Christian Rau, Senior Vice President of Mastercard, shared their exploration in the Web3 field and their vision for the future.

Christian  stated: “We want to make Bitcoin a secure, simple, and easy-to-use platform where users can transfer fiat currency into the Web3 world via Mastercard. Furthermore, we hope users will not only use Web3 wallets for on-chain spending but also for real-world applications.”

Providing practicality is key. The traditional financial system has many shortcomings, but I will not overlook its advantages.

For example, your card can already be used with Apple Pay or Google Pay, which is a very attractive feature.

We are working with many companies in the Web3 space to recreate this user experience and bring it to Web3, because that’s the future. Christian emphasized:

We will not push anyone towards Web3 or Web2.

Instead, we hope to provide the freedom of choice.

That is our goal.

Despite some concerns that the entry of traditional finance or Web2 into Web3 will undermine the essence of Web3, I believe that the two can actually develop in a win-win direction, because many models that work well in traditional finance can be applied to Web3, and Web3 innovations also have their unique value.

This isn’t an “either/or” relationship, but rather a state of “coexistence .” Fintech hasn’t replaced traditional banks, but it has raised the standard of user experience across the entire industry, and Web3 will do the same. I believe these two worlds will merge and raise the bar for traditional industries. Whether it’s media consumption, work patterns, or any other aspect, Web3 can bring innovation and complement and drive the progress of the financial industry.

Benefits of using stablecoins

Regarding the role of stablecoins in financial services, Joseph Cleetus, Assistant Vice President of Business Transformation at LuLu Financial Holdings, shared their experience using stablecoins in cross-border payments, noting that the traditional correspondent banking model is expensive, time-consuming, and requires substantial capital.

Joseph Cleetus stated that they have therefore switched to using stablecoins for settlement in some regions:

The advantage of this approach is that settlements are almost instantaneous, reducing the large amount of capital that needs to be reserved, and it can operate 24/7. We pass on the savings to our customers, thereby enabling us to offer the most competitive exchange rates in the market.

Joseph Cleetus added that they are trying to promote cryptocurrency payments and are currently piloting a program that allows hotels to accept stablecoin payments, hoping to bring Web3 to the masses, not just people in the tech industry.

Continuous optimization from technology to user experience

The host then asked the guest what the ideal user experience should look like.

Eowyn : The ideal experience should be seamless , with users creating a wallet with a single click, without needing to click multiple times. The next challenge is “how to acquire assets.” We currently offer one-click asset deposits from Binance and Coinbase, but this isn’t ideal. Our ultimate goal is for users to be able to directly convert fiat currency to cryptocurrency within the wallet interface.

Switching from fiat currency to cryptocurrency is extremely difficult, not only because of the technology, but also because of the supporting ecosystem, banking infrastructure, financial services, and local regulations in each region. However, we continue to work on this to ultimately provide users with a seamless experience, much like Apple Pay in Web 2.0, which is the ideal experience we hope to provide for getting started with cryptocurrency.

Jess shared the importance of developers in improving user experience. She explained:

We built three things: we established the Wallet Connect network and provided tools for applications and wallets.

As more and more mobile apps launch, we’ve started developing on other platforms, and recently we even launched the Unity SDK for game companies. We’re seeing a wider variety of applications and more demand. Regarding wallets, data shows that over time, the demand for different types of wallets has become more diverse, not less so. For example, I might use one wallet to spend USDC to buy coffee, and another wallet to store assets.

Safety challenges and risk education

When discussing security issues in the Web3 world, the guests mentioned that protecting digital assets and the risk of fraud remain major obstacles for new users.

Eowyn : Security can never be 100%. Even in traditional banks, there are risks of bankruptcy or database breaches.  Web3 security needs to be achieved through industry standards, and user education should be strengthened to teach them how to protect themselves in the digital world, such as identifying fraudulent addresses and high-risk transactions.

Security and self-custody are a spectrum, and we should educate users to choose when to use self-custody and when to use a custodial solution based on their own needs. Furthermore, we can provide tools to help users learn how to protect themselves, such as displaying red warnings when users interact with high-risk wallet addresses. While this cannot prevent users from taking action, it at least alerts them to the risks.

Developers should also set higher standards for themselves, ensuring the security of their code and improving their ability to detect potential scams. This will help users make more informed decisions.