Can you buy crypto with cash on a centralized exchange?

Cryptocurrency exchanges often utilize liquidity pools to facilitate trading. These pools are comprised of cryptocurrency funds contributed by users, which are then used to match buy and sell orders.

Among the popular Automated Market Makers (AMMs) that employ liquidity pools, users can find a variety of options. However, it's important to note that while AMMs do not require identity verification, traders must already possess a funded crypto wallet to participate.

The lack of direct cash-to-crypto transactions on these platforms is a key distinction. Users are unable to purchase cryptocurrency using fiat currency directly on AMMs. Instead, they must first acquire crypto funds through other means.

One common approach is to buy cryptocurrency with cash on a centralized exchange. Centralized exchanges often provide more traditional payment methods, such as bank transfers or credit/debit card payments, to facilitate the purchase of crypto.

After acquiring crypto on a centralized exchange, users can then transfer the funds to their crypto wallet and utilize it for trading on AMMs or other decentralized platforms. This process allows users to take advantage of the benefits of decentralized trading while still being able to access crypto funds initially purchased with fiat currency.