Web3 banking protocol Fiat24 is unlocking infinite possibilities for the DeFi Lego game
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Web3 banking protocol Fiat24 is unlocking infinite possibilities for the DeFi Lego game
The imagination space of integrating fiat logic into DeFi can be huge!
Navigating Web3 tides with focused insightsAuthor: Will Wang
Cointelegraph recently reported on the strategic partnership between Web3 banking protocol Fiat24 and Safepal's DApp wallet: Fiat24 has launched an in-DApp Web3 banking gateway and virtual crypto-linked Visa card for the Safepal DApp wallet, enhancing its usability and further bridging interaction with the real world.
Combined with our previous research article "Fiat24: A Web3 Bank Built on Blockchain", we can see that the fiat layer protocol (Fiat Layer Protocol), constructed by Web3 banking protocols, is playing an active role within the Blockchain Network:
1. After moving banking logic onto the blockchain, the protocol layer can seamlessly connect with DApps/DeFi;
2. Delivering U-denominated Web3 on-chain banking services to users;
3. Bringing innovative fiat-based business logic to DApps/DeFi.
This article will first introduce the strategic collaboration between Fiat24 and Safepal, then further explain how Web3 banking protocols unlock infinite possibilities in the DeFi Lego game.
(Singaporean fintech launches USDC-powered Visa card with Swiss bank Fiat24)
I. Seamless Integration with Safepal DApp Wallet
On March 8, Safepal DApp Wallet—strategically invested by Binance Labs—integrated Fiat24 as its default fiat protocol layer. Users of the Safepal wallet can now create a Fiat24 on-chain bank account via an in-DApp Web3 banking portal on Arbitrum, enabling:
1. U-denominated on-chain banking services, self-custodied accounts, with all related transactions securely and transparently recorded on-chain;
2. On- and off-ramping between crypto assets within the wallet and fiat currencies;
3. Fiat transfers and汇款 between the Fiat24 on-chain bank account and traditional bank accounts, including USD/EUR currency exchange;
4. After linking the virtual crypto-linked Visa card, seamless real-world spending using crypto assets.
(https://www.safepal.com/en/bank)
Safepal’s Founder & CEO Veronica Wong said: "After creating a Fiat24 on-chain bank account within SafePal's wallet, users can convert any crypto asset in their wallet into USDC and deposit it into the Fiat24 on-chain bank account. The virtual crypto-linked Visa card can also be linked with third-party payment platforms such as PayPal, Google Pay, Apple Pay, and Samsung Pay, significantly enhancing user payment convenience."
II. Web3 Banking Protocol: Fiat24
Fiat24 is a fintech company licensed by the Swiss Financial Market Supervisory Authority (FINMA). It has launched the first Web3 banking protocol that fully implements banking logic on a public blockchain (Arbitrum), entirely driven by smart contracts. This protocol allows users to create on-chain bank accounts and access a full suite of Web3 banking services including on/off-ramping, crypto-enabled payments, savings, transfers, and foreign exchange.
(Temperature Check - [Issue a Visa Card with Uniswap Logo])
You can think of Fiat24 as a fiat layer protocol (Additional Fiat Layer for DApps) for DApps/DeFi. On this fiat protocol layer, Fiat24 creates on-chain bank accounts (Cash Accounts) for KYC-verified users. These accounts integrate Web3 payment services—allowing direct on/off-ramping and crypto payments—while also connecting directly via its fintech license to the Swiss National Bank, European Central Bank, and the VISA payment network, enabling traditional banking functions such as fiat savings, currency exchange, and merchant settlements.
By moving the core banking system onto the blockchain, Fiat24 represents a perfect example of fintech innovation on blockchain, maximizing the use of decentralized ledger technology to enhance both convenience and security while eliminating single points of failure.
Even more impressively, this innovative approach has gained recognition from Swiss regulators. Guided by the principle of Technology Neutrality, Swiss regulation enables fintech companies to boldly innovate as long as they meet fundamental operational requirements. As such, Fiat24 leverages blockchain for its banking ledger and uses NFTs to represent KYC-verified user identities on-chain, satisfying anti-money laundering (AML) regulations.
Fiat24’s blockchain-based banking architecture seamlessly merges traditional financial services with Web3 innovation, attracting top-tier capital and earning the 2022 Best Emerging Bank (Neobanks & Specialized Players) award from Qorus and Accenture.
(Qorus and Accenture Announce Winners of 2022 Banking Innovation Awards)
III. Introducing Innovative Fiat Logic to DApps/DeFi
Fiat24’s earlier innovation was bringing banking logic on-chain with regulatory approval from Switzerland. Its next frontier is introducing new fiat-based business logic to DApps/DeFi.
Due to licensing restrictions, Fiat24 cannot offer lending services and is limited to deposits and payments. However, these constraints have ironically become significant advantages for Fiat24 under its Web3 banking architecture:
A. Global Debit Card Issuance and Payments. Credit cards involve lending, which Fiat24 cannot provide due to licensing limitations. They also carry high risks of default and collection, typically limiting operations to specific regions. In contrast, prepaid debit cards enable global issuance without credit risk.
For users wanting to use crypto assets in daily life, Fiat24’s revolutionary ability to provide on/off-ramping and crypto payment solutions represents a true innovation over traditional payment systems.
B. Seamless Integration with DApps/DeFi. While licensing prevents Fiat24 from offering loans directly, it does not hinder the Fiat24 banking protocol (Fiat Layer Protocol) from being freely integrated into DApps/DeFi, where lending can be executed through DeFi smart contracts.
The key point is: as a protocol, it brings fiat-based business logic to DeFi. Consider common financial activities:
1. Collateralized Lending: Bob provides ETH as collateral on a DeFi platform to borrow stablecoins. The DeFi protocol can directly call the Fiat24 banking protocol to issue USD fiat loans;
2. Staking for Yield: Alice stakes her ETH to earn yield. The DeFi protocol can directly invoke the Fiat24 banking protocol to distribute interest-bearing fiat assets—can you really lie back and earn?
3. Investment & Wealth Management: Will uses his ETH to invest directly in tokenized securities like Coinbase via a DeFi protocol. The DeFi protocol can then use the Fiat24 banking protocol to purchase stocks on NASDAQ using fiat currency.
(X@Fiat24)
The potential of integrating fiat logic into DeFi is vast! Moreover, the ability of the protocol itself (Fiat Layer Protocol) to freely plug into DApps/DeFi helps Fiat24 smoothly integrate into the Blockchain Network and generate immense ecosystem value.
Imagine how many contracts need to be signed, how many departments consulted, and how many executives must approve before a centralized wallet like MetaMask integrates with a centralized on/off-ramp provider like MoonPay. Now imagine how a centralized service like MoonPay could possibly sign a contract with a decentralized DeFi protocol—DeFi protocols don’t even have legal entities or official seals.
But there is absolutely no friction between the Fiat24 banking protocol and a DeFi protocol—zero barriers, just one click!
There is no legal binding—only smart contracts enabling collaborative Lego-like building. That is the essence of Web3.
IV. Final Thoughts
There are currently two groups building Web3 banking/payment solutions. One group comes from traditional cross-border payments—they stick to old models, treating crypto merely as another currency. They profit from channel fees, subscriptions, and membership charges, running cash-flow businesses. The other group consists of Web3 natives who avoid cash-flow thinking altogether. Instead, they use blockchain to transform legacy systems, unleash new vitality, embrace community ecosystems, and build things for the Blockchain Network—running ecosystem businesses.
We don’t know who will ultimately prevail, but I choose to believe in, participate in, and help create the transformative power of the Blockchain Network!
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