Crypto Wallets

Crypto wallets are components for managing and transacting with digital currencies on the Fuze platform. They serve as digital addresses where cryptocurrencies can be stored, received, or sent from. Fuze distinguishes between two primary types of crypto wallets: Internal Wallets (hosted by Fuze) and External Wallets (references to wallets outside Fuze).

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Internal vs. External: The Core Distinction
Internal Wallets are created and managed within the Fuze platform, providing custody for your End-Customers' crypto assets.
External Wallets are records of crypto addresses that exist outside Fuze, registered for interacting with the Fuze ecosystem.

This "Wallets" section refers to cryptocurrency wallets. Fiat currency holdings are managed through Accounts.

Internal Crypto Wallets

Purpose: Internal Crypto Wallets are Fuze-hosted digital wallets designed to hold your End-Customers' cryptocurrency assets directly within the Fuze platform.

These wallets enable your customers to participate in the crypto economy through your services.

Key Characteristics:

Hosted by Fuze: Fuze manages the blockchain infrastructure, private keys, and security for these wallets.
Customer-Linked: Each Internal Wallet is associated with a specific End-Customer record in your Fuze integration.
Currency and Network Specific: An Internal Wallet is created for a particular cryptocurrency (e.g., Bitcoin, Ethereum, USDC) and its corresponding blockchain network (e.g., Bitcoin Mainnet, Ethereum Mainnet, Polygon).
Unique Deposit Address: Upon creation, each Internal Wallet is assigned a unique deposit address (and a memo/tag if required by the blockchain, like for XRP, XLM) where funds can be sent to credit the wallet.
Balance Management: Fuze tracks and updates the balances of these wallets as transactions occur.

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Secure Custody and Simplified Management
Internal Wallets abstract the complexities of direct blockchain interaction and key management for your End-Customers, offering a method to store and manage their crypto assets.

Primary Uses:

Receiving Crypto Deposits: End-Customers can receive cryptocurrency from external sources into their Internal Wallets using the provided deposit addresses. You can create separate wallet for each counterparty to make reconciliation easy
Holding Crypto Assets: Storing various cryptocurrencies on behalf of your End-Customers.
Funding Transactions: Serving as the source for:
- Trades (e.g., converting Bitcoin to USDC).
- Withdrawals to External Crypto Wallets.
- Internal transfers to other Fuze users (if this feature is supported by your specific Fuze integration).

Lifecycle & Interaction:

An Internal Wallet is typically created for an End-Customer after they have completed KYC/KYB.
A unique deposit address is generated and made available.
The End-Customer (or an external party) sends cryptocurrency to this address.
Fuze detects the deposit on the blockchain, and after necessary confirmations, the End-Customer's Internal Wallet balance is updated.
The balance can then be used for platform activities.

External Crypto Wallets

Purpose: External Crypto Wallets are records within the Fuze system that point to specific cryptocurrency wallet addresses existing outside the Fuze platform. Fuze does not host or control these wallets but allows you to register them for transactional purposes.

These are primarily linked to Counterparties (either SELF—the End-Customer's own external wallet—or THIRD_PARTY).

Key Characteristics:

References to External Addresses: They represent an address on a public blockchain not managed by Fuze.
Counterparty-Linked: Associated with a registered Counterparty to ensure funds are directed to or recognized from known entities.
Currency and Network Specific: Defined by the cryptocurrency, blockchain network, and any required destination tag or memo.

Primary Uses:

Withdrawal Destinations: Their most common use. End-Customers can withdraw funds from their Fuze Internal Wallet to a registered External Wallet. Pre-registering these helps ensure accuracy and can be part of whitelisting or approval workflows.
Recognized Sources for Deposits: While Internal Wallets have their own deposit addresses, registering an expected External Wallet source can aid in tracking, reconciliation, and compliance for incoming funds from known Counterparties.

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Accuracy is Critical for External Wallets
When registering and using External Crypto Wallets, ensure the accuracy of the address, blockchain network, and any required memo/tag. Transactions sent to incorrect external addresses are typically irreversible.

Lifecycle & Interaction:

An External Wallet address is registered within Fuze and linked to a specific Counterparty (SELF or THIRD_PARTY).
The address might undergo validation checks (e.g., format validation) or internal approval/whitelisting processes within your organization's compliance framework.
When an End-Customer initiates a withdrawal from their Internal Wallet, they can select a pre-registered External Wallet as the destination.
For incoming funds, if an External Wallet is registered as a known source for a Counterparty, this information can be used to attribute the deposit upon its arrival in an Internal Wallet.

API Interaction (General)

The Fuze API provides endpoints that allow your application to:

Create Internal Crypto Wallets for your End-Customers.
Retrieve details and deposit addresses for Internal Crypto Wallets.
Register (add), manage, and list External Crypto Wallets linked to Counterparties.
Query balances of Internal Crypto Wallets.

Effectively using both Internal and External Wallet functionalities enables you to offer a complete cryptocurrency service to your users, covering secure storage, deposits, and flexible withdrawals.