How is layer-2 technology transforming international payments by offering secure, instantaneous transactions?

There’s an ongoing revolution in the global payment sector led by the transformative potential of layer-2 technology. This tech, along with traditional banking infrastructures such as financial messaging and card payment systems, is shifting the financial interaction fundamentals. The resultant new tech structure increases security, optimizes efficiency, and democratizes access to the global financial network.

While e-banking has accelerated the digital progression of traditional finance, it still grapples with limitations that blockchain technology could address. Current user access protocols, involving usernames, passwords, and SMS-based transaction codes, are outdated and susceptible to human errors and manipulation. These flaws risk security and expose sensitive information due to the bank systems’ dependence on a single failure point.

Layer-2 Technology Meets Banking

Fiat24, a Swiss fintech company operating under Swiss banking laws, offers a solution to these challenges with a decentralized application (DApp). This platform leverages the advantages of Arbitrum, a layer-2 rollup blockchain, to reshape the global payments landscape.

The platform combines financial services and blockchain innovations, fortifying security while improving convenience. Via Fiat24’s DApp, customers can now utilize the crypto assets stored in their MetaMask or other noncustodial crypto wallets for everyday transactions, like buying a Starbucks coffee. This breakthrough transforms crypto wallets into payment solutions, enabling digital assets to be put to use in day-to-day life.

Fiat24 leverages Arbitrum, an Ethereum layer-2 network, to allow for instantaneous money transfers. This introduces a new payment, payee, and money conversion method, bypassing the need for extra downloads. Users can access the DApp via any browser or preferred crypto wallet, making financial transactions more accessible to all, truly redefining the concept of a global payment app.

Fiat24 ensures clients maintain self-custody of their crypto assets until they decide to convert them into fiat money, emphasizing user autonomy. Moreover, it’s the only fully regulated financial institution that lets clients cash out crypto directly through their noncustodial wallets.

Fiat24 recently made history with the first-ever card transaction booked on Arbitrum, executed using a Visa debit card to buy an apple.

Fiat24’s Chief Technology Officer, Nico Buechel, commended Arbitrum and the team at Offchain Labs for their impressive progress. He stated that the scalability, low fees, quick transaction times, and decentralization made Arbitrum an appealing solution for Fiat24. This layer-2 technology allows them to offer a versatile, cost-effective service to their clients.

Following the upcoming Cancun upgrade, more mature layer-2 solutions will be available for industrial usage, reducing gas fees for transactions, thereby benefiting users worldwide.

The Road Ahead: Connecting with Payment Networks

Scheduled for September 2023, Fiat24 plans to introduce another groundbreaking feature: linking Fiat24 account NFTs with a Swiss IBAN. This development will further intertwine blockchain technology with traditional financial systems.

Fiat24 has gained approval to join the Swiss Interbank Clearing (SIC) payment system and establish a settlement account within the Swiss National Bank. Once this system is operational, fiat currency movements will be recorded on the Arbitrum blockchain in real-time. Crypto wallets will then extend beyond managing digital assets like Bitcoin and Ether to become mobile banking apps for fiat money.