3 - 4 minute read
Cogni, a neobank with United States Federal Deposit Insurance Corporation coverage through a traditional New York bank, has announced that it is rolling out soulbound non-fungible tokens (NFTs) containing Know Your Customer (KYC) information to holders of its crypto wallet. The Polygon-based NFT will transfer customers’ “Web2” KYC verification done by the bank at account opening into a Web3 environment.
Cogni introduced its non-custodial multichain crypto wallet in January, where users can send, receive, and hold cryptocurrencies and NFTs in the wallet. Users can optionally mint the non-transferable soulbound NFT, which decentralized apps (DApps) can then decrypt with the owner’s permission. The bank’s intention is to create an improved user experience by making it easier for users to jump on the decentralization bandwagon while building trust in the ecosystem.
“The reason why the crypto-curious have not really been able to jump on the decentralization bandwagon is, one, obviously, the user experience. The second is trust in the ecosystem,” said Cogni founder and CEO Archie Ravishankar. “Everybody knows how to use digital banking,” Ravishankar added. The crypto wallet is available “in the course of the normal banking experience.”
The “bank-level” KYC information contained on the NFT satisfies KYC requirements in the United States and will be available to partnering DApps with no further action necessary. Cogni foresees creating a marketplace of DApps that can be connected to, including KYC verification, with only a few clicks. The use of non-custodial wallets has been rising after the bankruptcies of major crypto firms during the crypto winter trapped customers’ money in their custodial wallets.
Cogni: The challenger bank supported by Barclays wants to disrupt financial services 2020 https://t.co/fkVVab7W77 pic.twitter.com/yMaSFwdQj9— CoinnewsBest (@CoinnewsB) March 11, 2020
The Cogni soulbound NFT will initially be available to select users and is expected to be open to the public in the summer. The neobank supported by Barclays wants to disrupt financial services in 2020.
The Bottom Line
Cogni’s decision to integrate KYC verification into non-fungible tokens is a significant development that streamlines the process and simplifies the user experience. As more exchanges and wallet providers start to integrate NFTs into their platforms, this development could become a standard in the industry. The use of soulbound NFTs provides an enhanced layer of security and privacy, protecting the user’s personal information. However, traders should remain cautious and stay informed of any new developments in the industry.