NFT: The new Swiss bank account for the Web3 era
Swiss fintech company Fiat24 is rebuilding banking infrastructure using Web3 technology, using ERC-721 to represent customers’ on-chain IDs and ERC-20 to represent deposits.
Winning users’ trust and confidence in using new technologies to bank and access their accounts has been a difficult challenge since online banking and the early days of the digital age. As paper customer bookkeeping processes transition to fully online, server-side processes, it will take time for people to adjust to using apps instead of paper and pen.
In the early days of the Web3 era, it will take time for non-fungible tokens (NFTs) to replace existing electronic banking services. However, Swiss fintech Fiat24 is rebuilding banking infrastructure in a pure Web3 way, utilizing ERC-721 to represent customers’ on-chain IDs and ERC-20 to represent their deposits.
ERC-721: NFT is more than just a simple picture
NFT has gone through a long development process, from the initial images of apes, penguins and kittens that were popular in the market to the present day. They have the power to help people reimagine everything from real estate to experiences to ticketing.
As smart contracts (self-executing digital agreements) gradually replace centralized computer programs, the role of NFTs becomes increasingly important because smart contracts can directly interact with parameters stored in the NFT metadata, allowing them to provide different services to different NFT holders.
For Fiat24, NFTs are used to represent customer identities, allowing the platform to understand the identities of users within its ecosystem. However, NFTs can do more than just digital identities, as they can also serve as legal proof of ownership for a customer, proving they are the account holder.
It also serves as the access key to the account, because by storing the NFT in the associated wallet, the customer can effectively log into their account. Finally, NFTs also contain all the logic needed to perform banking operations.
Fiat24 opens Swiss IBAN accounts for clients, with the last digits of the account corresponding to the NFT number, providing functionality beyond a typical Swiss bank account.
ERC-20: Efficient Payment Network
Customer account balances are represented in ERC-20 tokens, and all operational logic is executed through smart contracts. This allows customers to manage online banking accounts directly in their preferred non-custodial wallet, such as MetaMask, and seamlessly exchange digital assets for fiat currency.
The "atomic swap" feature of blockchain technology enables seamless exchange between two assets at the same time without relying on a centralized intermediary. Compared with traditional payment networks such as SWIFT and SEPA, ERC-20 tokens are more efficient and accurate, enabling faster and more accurate transfers.
The programmability of ERC-20 tokens allows them to automate financial processes such as conditional payments and lending, eliminating the need for intermediaries such as banks. Additionally, the decentralized nature of blockchain eliminates central authorities, increases transaction speed and reduces costs. These properties make ERC-20 tokens an ideal solution for cross-border and peer-to-peer transactions.
The power of ERC-721 and ERC-20 combined
By leveraging NFTs for on-chain authentication and storing transaction parameters, while using ERC-20 as the ledger, smart contracts are able to combine the two to replicate all banking functions. The Switzerland-based Fiat24 project aims to rebuild the banking system using Web3 technology.
Fiat24 is connected to traditional payment networks such as SWIFT, SEPA, Visa and Mastercard, synchronizing payment information directly to the blockchain via ERC-20 tokens.
Banking in the Web3 era: Swiss IBAN NFT
Owning a Fiat24 NFT comes with many benefits. The NFT itself represents a Swiss International Bank Account Number (IBAN). Once customer identity verification (KYC) is completed, this IBAN functions the same as any European bank account. But what makes it unique is that you can seamlessly exchange digital currency for fiat currency (EUR, CHF, USD) and get a Visa debit card to access your account balance.
Although Fiat24 NFT is currently available for free, one Fiat24 platform token F24 needs to be destroyed.
This project is built on Arbitrum, the second layer of Ethereum. The Arbitrum DAO has supported the project since the launch of the first Arbinaut-designed Visa debit card and awarded Fiat24 ARB (Arbitrum’s native token) in the latest LTIPP grant, which is expected to be airdropped soon.
The integration of Web3 technology into the banking industry marks a major shift in the financial system towards a more decentralized, efficient and secure direction. As more and more fintech companies adopt blockchain solutions, traditional banking processes are bound to change, bringing greater flexibility and innovation to users around the world.