Understanding Web3 Banking Protocol in One Article Fiat24

Forwarded Title:Web3 banking protocol Fiat24 is opening up the infinite reverie of DeFi Lego games

Cointelegraph recently reported on the strategic collaboration between the Web3 banking protocol Fiat24 and Safepal DApp wallet: Fiat24 has introduced an in-DApp Web3 banking gateway and virtual encrypted payment Visa card for Safepal DApp wallet to enhance its usability, further bridging the interaction with the real world.

Combining this with our previous research article “Fiat24: Web3 Banking Built on Blockchain,” we can see that the Fiat Layer Protocol, built on the Web3 banking protocol, is playing an active role in the Blockchain Network:

1. After moving banking logic onto the blockchain, the protocol layer can seamlessly integrate with DApps/DeFi; 2. It brings users Web3 on-chain banking services based on U-centrality; 3. It introduces innovative logic for fiat currency transactions in DApps/DeFi.

This article will first introduce the strategic collaboration between Fiat24 and Safepal, followed by further elaboration on how the Web3 banking protocol opens up boundless imagination in the DeFi Lego game.

（Singaporean fintech launches USDC-powered Visa card with Swiss bank Fiat24）

1. Seamlessly Integrating with Safepal DApp Wallet

On March 8th, Safepal DApp wallet, strategically invested by Binance Labs, integrated Fiat24 as its default fiat currency protocol layer. Users of Safepal wallet can now create Fiat24 on-chain bank accounts on Arbitrum through the in-DApp Web3 banking gateway, enabling:

1. On-chain banking services based on U-centrality, with self-custodied accounts and all related transactions securely and transparently recorded on the blockchain; 2. Deposits and withdrawals of encrypted assets (Crypto) and fiat currency (Fiat) within the wallet; 3. Fiat currency transfers between Fiat24 on-chain bank accounts and physical bank accounts, including currency exchange between Euro and USD; 4. With the integration of virtual encrypted payment Visa cards, seamless spending of encrypted assets in the real world.

（https://www.safepal.com/en/bank）

Veronica Wong, the founder & CEO of SafePal, stated: “After creating a Fiat24 on-chain bank account within the SafePal wallet, users can convert any encrypted assets in the wallet into USDC and deposit them into the Fiat24 on-chain bank account. The virtual encrypted payment Visa card can also be linked to third-party payments such as PayPal, Google Pay, Apple Pay, Samsung Pay, enhancing the convenience of user payments.”

2. Web3 Banking Protocol Fiat24

Fiat24 is a financial technology company licensed by the Swiss Financial Market Supervisory Authority (FINMA). It has launched the first Web3 banking protocol entirely built on a public blockchain (Arbitrum), driven entirely by smart contracts. This protocol enables users to create an on-chain bank account and provides a range of Web3 banking services including deposits, withdrawals, encrypted payment transactions, savings, transfers, currency exchange, and more.

（Temperature Check - [Issue a Visa Card with Uniswap Logo ]）

Fiat24 can be envisioned as an Additional Fiat Layer for DApps/DeFi. In this fiat currency protocol layer, Fiat24 allows KYC-verified users to create on-chain bank accounts (Cash Accounts). These accounts integrate various Web3 payment services, enabling users to conduct deposits, withdrawals, and encrypted transactions directly through their on-chain bank accounts. Leveraging its financial technology license, these on-chain bank accounts can also directly connect with the Swiss National Bank, the European Central Bank, and the VISA payment network, enabling traditional banking services such as savings, currency exchange, and merchant settlements.

Fiat24 moves the core banking operations logic (Core Banking System) onto the blockchain, representing a perfect example of fintech innovation on the blockchain. This approach maximizes the integration of blockchain’s decentralized ledger technology, enhancing convenience while strengthening security and mitigating the risks of single-point failures.

Moreover, this innovative approach has gained recognition from Swiss regulators. Swiss regulation, based on the Technology Neutral principle, ensures that fintech companies can boldly innovate with technology while meeting basic business functionality requirements. As a result, Fiat24 achieves bank ledger accounting through blockchain while utilizing NFTs for on-chain user identity verification, meeting anti-money laundering requirements.

Fiat24’s blockchain banking architecture seamlessly integrates traditional banking services with Web3 blockchain innovation. It has garnered favor from top-tier capital and has been honored with the 2022 Best Emerging Bank (Neobanks & Specialized Players) award by Qorus and Accenture.

（Qorusand Accenture Announce Winners of 2022 Banking Innovation Awards）

3. Bringing Innovative Logic for Fiat Currency Business to DApps/DeFi

Fiat24’s previous innovation lies in bringing banking logic onto the blockchain and gaining approval from Swiss regulators. Following this, Fiat24’s innovation lies in opening up new fiat currency business logic for DApps/DeFi.

Due to limitations imposed by fintech licenses, Fiat24 cannot engage in lending activities and can only offer deposit and payment services. However, these limitations actually bring significant advantages to Fiat24 adopting a Web3 banking architecture:

A. Global issuance of debit cards. Credit cards inherently involve lending, and due to Fiat24’s licensing restrictions and the immense pressure of default collection, they are generally confined to specific regions. On the other hand, rechargeable debit cards can facilitate global issuance and payment networks without the risk of default. For users looking to integrate cryptocurrency into their daily usage, Fiat24’s revolutionary ability to provide deposit, withdrawal, and encrypted payment solutions for DApps/DeFi represents an innovation in the traditional payment system.

B. Seamless integration with DApps/DeFi. Despite restrictions on lending activities, Fiat24’s banking protocol itself (Fiat Layer Protocol) can freely integrate with DApps/DeFi, enabling on-chain lending activities through DeFi smart contracts.

The key here is that the protocol can bring fiat currency business logic to DeFi. Taking the most common financial activities as examples:

1. Collateralized lending: Bob provides encrypted assets like ETH as collateral to borrow stablecoins on a DeFi platform. The DeFi protocol can directly utilize the Fiat24 banking protocol to facilitate lending in USD fiat currency.

2. Investment/staking: Alice provides encrypted assets like ETH for staking rewards. The DeFi protocol can directly utilize the Fiat24 banking protocol to distribute fiat currency-based staking rewards. Isn’t this truly passive income?

3. Investment management: Will invests encrypted assets like ETH directly into tokenized securities on a DeFi protocol like Coinbase. The DeFi protocol can directly utilize the Fiat24 banking protocol to use fiat currency to purchase stocks on Nasdaq.

（X@Fiat24）

Adding fiat currency logic to the imagination space of DeFi can be groundbreaking! Similarly, the ability of the protocol itself (Fiat Layer Protocol) to seamlessly integrate with DApps/DeFi can help Fiat24 smoothly integrate into the Blockchain Network and bring significant ecosystem value.

Imagine this: for a centralized wallet like Metamask to integrate with a centralized fiat on/off-ramp like Moonpay, how many contracts need to be signed, how many departments need to discuss, and how many executives need to sign off? Now, imagine how a centralized fiat on/off-ramp like Moonpay can sign contracts with decentralized DeFi protocols. DeFi protocols don’t even have legal entities, let alone official seals.

However, there are no barriers or friction between the Fiat24 banking protocol and DeFi protocols. Just one click, and they’re integrated seamlessly!

No one is legally bound, but they’re all playing Lego games together through smart contracts. This is the essence of Web3.

4. Conclusion

Nowadays, there are two waves of people engaging in Web3 Banking/Payment businesses. One wave consists of traditional cross-border payment practitioners who still adhere to traditional cross-border payment methods, with cryptocurrency simply adding another currency. They earn money through channel fees, membership fees, and subscription fees, focusing on cash flow businesses.

The other wave consists of Web3 Native individuals who are less inclined to engage in cash flow businesses. Instead, they prefer to directly use blockchain to transform the old system, unleash new vitality, and embrace community ecosystems. They focus on activities within the Blockchain Network, engaging in ecosystem businesses.

Who will ultimately emerge victorious remains uncertain, but I am willing to believe in, participate in, and contribute to the transformative power of the Blockchain Network!

Statement:

1. This article is reproduced from [Web3 small rules], original title “Web3 banking protocol Fiat24 is opening up the infinite reverie of DeFi Lego games”, the copyright belongs to the original author [ Will Awang], if you have any objection to the reprint, please contact Gate Learn Team, the team will handle it as soon as possible according to relevant procedures.

2. Disclaimer: The views and opinions expressed in this article represent only the author’s personal views and do not constitute any investment advice.

3. Other language versions of the article are translated by the Gate Learn team, not mentioned in Gate.io), the translated article may not be reproduced, distributed or plagiarized.