A revolution is unfolding in the world of global payments, spearheaded by the transformative power of layer-2 technology and serving traditional banking infrastructure such as financial messaging and card payment networks. By working together, there is a shift in the fundamentals of financial interaction, using breakthrough technical architecture to improve security, efficiency and unrestricted access to the global financial network.
E-banking has been a catalyst for the digital development of traditional finance, but it still faces several shortcomings that can be improved using blockchain technology. Users access their bank accounts using outdated practices of usernames and passwords, while transaction confirmation codes are usually obtained via SMS. This cumbersome process makes the system susceptible to human error and manipulation, compromising security. In addition, transaction records and processing logic are often managed in banks’ back-end systems, creating a single point of failure and exposing sensitive information.
When blockchain meets banking
Fiat24, a Swiss fintech company governed by Swiss banking law, has introduced a decentralized application (DApp) to address these challenges. Operating under a Swiss fintech license, the platform integrates the benefits of layer-2 rollup blockchain Arbitrum to revolutionize the global payments landscape.
The architecture used creates a seamless blend of financial services and blockchain innovation, strengthening security and increasing convenience. Through Fiat24’s DApp (accessed through the signature NFT), customers can use the crypto assets stored in their MetaMask or other non-custodial crypto wallet to purchase Starbucks coffee, making their tokens readily available for spending anywhere where Visa is accepted. This revolutionary ability to turn crypto wallets into a payment solution is a unique game-changer for users looking to use their digital assets on a daily basis.
Using Arbitrum, an Ethereum layer-2 network, Fiat24 enables instant money transfers, pioneering a new way to pay, get paid and convert money. As a DApp, it bypasses the need for additional downloads and can be accessed through any browser or favorite crypto wallet. This further democratizes access to financial transactions and redefines what it means to be a global payment app.
Fiat24 allows clients to hold crypto assets in-house until they are ready to convert to fiat money, further emphasizing user empowerment. In addition, this is the only fully regulated financial institution that allows customers to cash out crypto directly through their non-custodial wallet.
The platform already recorded the very first card transaction booked on Arbitrum, which was performed using a Visa debit card to buy an apple.
Fiat24 Chief Technology Officer Nico Buechel commented: “I believe Arbitrum has achieved great things over the past few years and it is very inspiring to see the growth that the Offchain Labs team has achieved. Arbitrum offers several benefits and there are many reasons why we chose to build on that over one of the other chains available.” He continued: “Overall, the scalability, low costs, fast transaction times and decentralization are all part of what makes Arbitrum an attractive solution for Fiat24 as a versatile and cost-effective option to provide the best service to our customers.”
By the end of this year (after the Cancun upgrade), even more mature Layer-2 solutions for industrialized use will become available, making transactions much cheaper in terms of gas costs – a huge benefit for users everywhere.
Next stop: Join the payment networks
On the roadmap for September 2023, another groundbreaking feature is the linking of Fiat24 account NFTs with a Swiss IBAN (International Bank Account Number), further integrating blockchain technology into the traditional financial system.
To enable this feature, Fiat24 has been approved to participate in the Swiss Interbank Clearing (SIC) payment system along with a clearing account within the Swiss National Bank (Swiss Central Bank). Once the system is live, the movement of fiat currencies will also be posted on the Arbitrum blockchain in real time. Crypto wallets will no longer be just a tool for digital assets like Bitcoin (BTC) or Ether (ETH), but also a comprehensive mobile banking app for fiat money.
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