The first Onchain Money Tokenised Deposit System that mirrors fiat currencies between banks and on-chain.
The blockchain industry has seen its fair share of innovation, and stablecoins have been a big part of that story. But with their fluctuations and sometimes uncertain backing, is there a better way to bridge the gap between TradFI and the potential of DeFi?
From the uncertainty of stablecoins to solid ground, we introduce Onchain Money, a tokenised deposit system that mirrors traditional fiat currencies on-chain. What this means in layman’s terms, is that while Onchain Money is essentially a set of smart contracts on the blockchain, it can be integrated into the infrastructure of traditional banking systems from banks, financial institutions and more. Think of Onchain Money as a digital representation of familiar currencies like the British pound (GBP) or euro (EUR). This form retains its value 1:1 with the fiat currency it mirrors on supported banks, stored securely within the traditional banking system.
How does Onchain Money Differentiate?
Let’s break down the benefits:
- Stability: None of the rollercoaster price swings that plague many crypto stablecoins. Onchain Money’s value stays on par with the value of GBP/EUR/USD, just like in your bank account.
- ‘’Actual Backing:’’ It’s not just a promise or an algorithm that is pegged to fiat currencies (much like USDT, USDC etc). Onchain Money is directly linked to actual GBP or EUR held in regulated, traditional bank accounts.
Onchain Money brings the familiarity and ease-to-use of how we interact daily with our bank accounts to receive, send or store our money, and at the same time, removes the middlemen (therefore the extra fees), long processing times when sending money abroad, and bureaucracy.
Example 1: An individual (let’s name him Alan) in the US wants to send some EUR to his family member (let’s name her Eva) due to an emergency. Yes, he could use any other stablecoin, send it to a CEX or directly to the self-custody wallet of Eva. Then, Eva would have to send it to her CEX or cash out from her CEX of choice.
‘’The pain point here is that both Alan and Eva would have to pay transaction, and network fees and be subject to conversion rates (usually set by the exchange).’’
Onchain Money solution: If Alan uses Onchain EUR instead to send the equivalent amount he wants to Eva, no matter if Eva has a self-custody wallet or has an account in a CEX, she would be able to receive the EUR directly to her bank account through Alan using the ReDeFi network, not only mitigating fees (as the only fee he’d pay is the one to cover our network fees) but achieve the transfer near-instantaneously.
Who and What is Onchain Money Good for?
Imagine paying your bills, buying groceries, or even sending money to friends, all with the convenience of crypto but the reliability of your everyday currency. Onchain Money has the potential to streamline everyday transactions between any individual while tapping into the innovation of blockchain technology.
On the other hand, it can eliminate unnecessary costs for B2B transactions, e-commerce, remittances, etc. The potential is untapped.
Coming Up…
In our next post, we’ll dive deeper: Onchain Money vs. Stablecoins — a side-by-side comparison to see why Onchain Money is superior.
Let’s Connect!
Do you have questions about ReDeFi and Onchain Money and how Onchain Money Tokenised Deposit System works? Share your thoughts in the comments, and let’s start the conversation! Make sure to DYOR!
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About BABB and ReDeFi
ReDeFi is a Financial Market Infrastructure (FMI) platform that integrates blockchain technology with traditional financial systems. It prioritises empowering various businesses and banks through a decentralised framework conducive to various financial operations, from cross-border B2B transactions to e-commerce and boosting government fiscal procedures. With the Onchain Money model, ReDeFi maintains the singleness of money principle, while expanding the ‘financial inclusivity’ and ‘banking the unbanked’ vision of BABB.
