Crypto-to-Fiat Bridge Reconciliation
Reconciling crypto bridges. Matching on-chain events (etherscan) with off-chain bank settlements. Handling volatility and mint/burn cycles.
A Crypto-to-Fiat bridge (On-ramp/Off-ramp) sits between two incompatible ledgers: The Blockchain (Ethereum, Solana) and the Banking System (SWIFT/ACH). Reconciliation here is determining that TxHash_0x123 (sending USDC) corresponds to Bank_Wire_Ref_ABC (receiving USD). The speed mismatch (Seconds vs Days) creates massive volatility risk.
The Three-Legged Recon
On-Chain Leg: The user sends crypto to the Bridge Wallet. The "Watcher Service" detects Confirms > 12.
Internal Leg: The system locks a rate and records a Pending_Payout.
Fiat Leg: The system instructs the bank to wire USD.
The Challenge: The bank wire might fail 2 days later. The crypto is already gone. The ledger must hold the crypto in a "quarantine" state until the Fiat leg reaches a terminal state, or accept the credit risk.
Mint and Burn Management
For Stablecoin issuers:
Minting: Fiat deposit received -> Mint Token. Bank_Asset increases, Token_Liability increases.
Burning: Token redeemed -> Burn Token -> Send Fiat.
Proof of Reserves: The automated reconciliation job must prove Total_Fiat_In_Bank >= Total_Tokens_On_Chain. This query is published often via Oracle for transparency.
Frequently Asked Questions
Common questions about this topic
QHow do you handle gas fees?
Gas is a variable expense. The platform usually estimates it and deducts it from the payout. The ledger must track Actual_Gas_Paid vs Estimated_Gas_Charged to monitor margin leakage.
QWhat is "Slippage" in reconciliation?
The difference in crypto price between the time the user quotes the trade and the time the transaction confirms. The ledger must record this variance to the P&L.
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