Source: BlockBeats

American payment giant PayPal announced last night that it will launch a compliant digital stablecoin PYUSD, issued by Paxos Trust (the former issuer of BUSD), which is fully backed by US dollar deposits, short-term government bonds, and similar cash equivalents. It will gradually be made available to PayPal's customers in the US over the next few weeks. Eligible US customers will be able to buy and sell PYUSD directly through PayPal at a price of $1.

In addition to supporting the transfer of PYUSD between PayPal and compatible external wallets, it also supports exchanges with any cryptocurrency. Furthermore, PayPal provides users with available payment scenarios, including allowing users to choose PYUSD for purchases at checkout and for person-to-person payments.

PYUSD will eventually support the mobile payment service Venmo. Considering that Venmo processes nearly $10 billion in transactions monthly and PayPal already has 430 million users, it is easy to imagine that when retailers start using PYUSD as a payment method, there will be a massive adoption of cryptocurrency.

Related reading: 《PayPal launches stablecoin, a compliant entry point for 430 million people into crypto》

The compliant inflow and outflow channels are expected to bring more liquidity to the crypto ecosystem, and the payment scenarios around real use cases give crypto stablecoins their first applications connected to traditional finance and the real economy. For the crypto bear market in a downturn, these are positive market signals.

As the traditional financial system moves closer to digital currencies, crypto-native projects are also striving to reach the real world, actively seeking their real users. They are "crypto debit cards that can buy coffee," "peer-to-peer self-custody payment systems," "crypto-native wallets," and "cross-border withdrawal services for enterprise users."

Regardless of their specific implementation methods, they share a common feature: "bridging on-chain and off-chain," which shows us another possibility for the crypto industry to connect with reality beyond RWA.

Low fees, compliance, crypto-native but as smooth to use as WeChat Pay non-custodial crypto wallets are beginning to embrace more real users, perhaps starting with everyday actions like buying coffee with cryptocurrency.

Non-Custodial P2P Payment System Beam

Beam is a self-custodial payment wallet that supports stablecoins and ECO tokens. It looks no different from Web2 P2P applications and is very smooth to use, supporting users in making peer-to-peer payments, hoping to become the on-chain version of Venmo.

Beam's key advantage lies in providing a sufficiently smooth crypto-native payment experience while reducing payment fees to negligible levels.

Crypto-native means that the wallet is non-custodial, and centralized entities like banks or exchanges cannot access users' funds. However, non-custodial wallets currently face the challenge of "complex user experience." Beam's goal is to make decentralized wallets intuitive enough that even those new to cryptocurrency can get started in minutes.

By adopting the ERC-4337 account abstraction standard, Beam removes a series of complex concepts such as wallet addresses, blockchains, keys, mnemonics, and ETH gas fees, allowing even users who have never interacted with cryptocurrency to use it for remittances without worry. New users can visit the official website to create a wallet and then link their Twitter accounts to save wallet login and access permissions.

Related reading: 《Understanding the newly launched "ERC-4337": No more need for mnemonics, is mass adoption of Web3 coming?》

Additionally, Beam allows users to pay fees by sending tokens. For example, if transferring USDC, the transfer fee is paid in USDC (no ETH required). Built using the Optimism and Base networks, Beam's transaction fees are also quite low.

In its early stages, Beam targets peer-to-peer payment scenarios, hoping to create a global on-chain version of Venmo, especially in dollar regions outside the US. The ultimate goal is to become a global version of Visa.

The application "can be used immediately worldwide," whereas traditional financial products "need to be launched country by country because you must engage with each country's banking rails."

Beam is launched by the crypto payment startup Eco, which is backed by a16z and has raised a total of $95 million, with other investors including Coinbase Ventures, Founders Fund, Lightspeed Venture Partners, and Pantera Capital.

Gnosis Card: Visa Debit Card Linked to Wallet

Gnosis Card is a crypto debit card issued by Gnosis, directly linked to users' on-chain accounts, allowing users to spend digital assets in any store that accepts Visa cards. It meets the needs of Web3 users to use stablecoins for everyday purchases, aiming to achieve the goal of using cryptocurrency like fiat currency.

Perhaps the adoption in the offline physical world is still far from reality, but through this real-time conversion of fiat to physical world assets, ordinary users can also achieve freedom of consumption with crypto assets in the real world.

Underlying Technology Network Gnosis Pay

Gnosis Card is supported by Gnosis Pay, a decentralized payment network developed by Gnosis itself, based on Polygon's zk EVM. As a layer two chain, it supports any EVM-compatible layer one network, enabling faster and cheaper transactions compared to layer one chains.

Whether it's off-chain banking systems, Visa, MasterCard, or Alipay, they can all interact directly with this L2 payment network, and users' Safe contract payment wallets run on this L2.

Notably, as one of Gnosis Card's important partners, the euro stablecoin EURe issued by Monerium will be used by Gnosis Pay for on-chain and off-chain payments to reduce bridging risks. Meanwhile, Monerium allows users to link their crypto wallets with international bank accounts or IBANs, corresponding to which each Gnosis card will be linked to a Safe wallet account.

When users remit from their bank accounts to the IBAN associated with the wallet, EURe stablecoins will be automatically minted on blockchains like Ethereum and Gnosis and displayed in the wallet. Conversely, when users spend from their wallets, the stablecoin EURe will be destroyed, and euros will be sent to the user's bank account.

Although there is such a complex operational process behind it, connecting the "on-chain" and "off-chain," "fiat" and "physical" worlds, involving both layer one and layer two settlement payments, the experience for consumer users is as smooth and convenient as using traditional credit cards and WeChat Pay. According to the team's demonstration at the EthCC event, transfers can be completed in about one to two seconds, with gas fee costs of less than $0.1.

How to Solve DeFi Compliance Issues?

Non-custodial does not mean non-compliant or a violation of any current regulations. On the contrary, adopting compliant methods to achieve decentralized financial payments is forming a trend, indicating that DeFi is moving in the right direction, which is a positive for the entire industry.

Fractal provides KYC process-related service support for Gnosis Pay. Specifically, when users apply for a Gnosis Card using a Monerium bank account, Fractal's system allows users to share verified identities with Gnosis through on-chain message signing.

Compliance focuses on meeting data privacy regulations. This requires developing a solution that "distributes data across private but permissionless node alliances (meaning no entity can control the blockchain)." Unlike distributed file storage protocols like IPFS, this requires Fractal to "ensure data coverage to comply with the right to be forgotten."

The right to be forgotten, also known as the right to deletion, is a key provision of the General Data Protection Regulation (GDPR), which gives individuals the right to request organizations to delete their personal data and requires organizations to comply with these requests within a specified timeframe.

In other words, the solution provided by Fractal allows users to control their own data while providing access to obligated entities within a specified timeframe as required by law. Obligated entities are subject to scrutiny by financial regulators, so financial regulators may require them to provide information about the parties behind the IBAN numbers.

Additionally, Gnosis Pay will also screen for fraudulent activities in collaboration with partners.

Each user has a Safe account on the Gnosis layer one chain, and correspondingly, there is another account on zkEVM (the second layer Ethereum scaling solution built on Polygon), similar to savings and spending accounts.

Gnosis Pay's compliance partners will conduct anti-money laundering (AML) and counter-terrorism financing (CFT) screening on funds entering the L2 account. This means that all funds entering L2 are screened and can be immediately spent through the Visa network. Users have complete control over both Safe accounts and can transfer back to L1 at any time. In other words, the role of L2 is to ensure compliance while allowing the network to handle a large volume of payments, which is the fundamental purpose of the L2 solution.

Integration with Existing Financial Systems

Gnosis Pay provides users with a smooth crypto-native payment experience, but behind it lies a series of very complex processes. In fact, Gnosis Pay needs to integrate with existing financial systems to truly enable transactions, such as becoming a member of Visa and MasterCard.

Notably, as one of Gnosis Card's important partners, the euro stablecoin EURe issued by Monerium will be used by Gnosis Pay for on-chain and off-chain payments to reduce bridging risks. Meanwhile, Monerium allows users to link their crypto wallets with international bank accounts or IBANs. After linking their wallet addresses, users can obtain an IBAN account that can "be used to send and receive euros in the SEPA system (including CEX)."

As the world's first Web3 IBAN, Monerium is a licensed and regulated electronic money institution (EMI). Its authorized and regulated Web3 euro token "EURe" supports use on Ethereum, Polygon, and Gnosis, as well as sending and receiving euros between any bank account and Web3 wallets (Metamask, Safe, and Argent).

IBAN is a standardized system widely used in Europe for cross-border identification of bank accounts. When users remit from their bank accounts to the IBAN associated with the wallet, EURe stablecoins will be automatically minted on blockchains like Ethereum and Gnosis and displayed in the wallet. Conversely, when users spend from their wallets, the stablecoin EURe will be destroyed, and euros will be sent to the user's bank account.

Holyheld: Web3 Debit Card

Holyheld is a Web3 debit card supported by Polygon zkEVM. Users can register on the official website (http://holyheld.com) to obtain a crypto payment card with an international bank account number (IBAN), providing exchange services between virtual currencies and fiat currencies, as well as virtual currency wallet services, supporting stablecoin USDC and most mainstream crypto wallets. Future plans include launching Android and iOS applications, with physical cards yet to be released.

Holyheld can connect to multiple non-custodial wallets, including Argent, Coinbase Wallet, MetaMask, and Rainbow, supporting multiple networks such as Arbitrum, Gnosis Chain, Optimism, and Polygon, without the need for bridging and centralized compromises.

Holyheld allows users to access http://holyheld.com or the app to order cards, with the accompanying virtual card available immediately. Users can also add it to Google Pay (Apple Pay is coming soon) and start using Holyheld without a physical card.

Virtual Credit Card OneKey Card

OneKey Card is a virtual VISA card service launched by the globally renowned digital hardware wallet OneKey, allowing users to pay for daily expenses using cryptocurrency. Users can recharge using USDT/USDC, and once the recharge is successful, they can use it on various domestic and international e-commerce platforms both online and offline. OneKey Card is a prepaid card that supports KYC with mainland Chinese ID cards and can be linked to electronic payment platforms such as Alipay, WeChat Pay, and PayPay for consumption, supporting most domestic consumption scenarios.

The consumption scenarios supported by OneKey Card include: overseas shopping (supporting purchases on platforms like Amazon, Walmart, eBay, Shopee, Lazada, etc.), currency conversion (allowing conversion of cryptocurrencies to USD, HKD, etc.), software subscriptions (for services like OpenAI/ChatGPT Plus API), and daily expenses (can be linked to Meituan for payment of takeout, dining, travel, etc.).

However, OneKey Card will stop accepting new user applications from mainland China, Russia, and other regions starting September 30. On August 8, the hardware wallet OneKey tweeted that OneKey Card will stop accepting new user applications from the following countries or regions starting September 30, 2023: Iran, North Korea, Syria, Russia, North Macedonia, mainland China, Sudan, Venezuela, and Zimbabwe. Users who have already activated their cards will not be affected and can continue to use them normally. This move is to strictly comply with local laws and regulatory requirements and to support more scenarios like Apple Pay in the future, with physical cards also in the planning.

Utopia Labs: USDC Withdrawal Service for Enterprise Users

Previously focused on becoming a DAO payroll payment system, Utopia Labs has recently transformed to provide USDC stablecoin bank transfer services for enterprise users, aiming to accelerate the adoption of crypto payments.

This product supports corporate entities worldwide to send USDC to US bank accounts, bridging the gap between fiat and cryptocurrency, and improving transaction speed and convenience by avoiding centralized exchanges.

This is particularly suitable for companies that receive salary income and fundraising in cryptocurrency, such as paying service providers with USDC who have US bank accounts, like office rent. Other potential use cases include venture funds paying invested projects or crypto projects processing on-chain revenue withdrawals.

How to Apply?

Enterprise users can submit KYB and KYC verification applications to Utopia Labs and will receive approval within two working days. Once approved, enterprise users can exchange USDC for USD at a 1:1 rate, with Utopia Labs charging a fee of 0.3%. USDC transfers are unique to the Ethereum blockchain, with no restrictions, and comply with ACH (Automated Clearing House) transfers, generally received within three working days.

Utopia's roadmap includes withdrawal services for any tokens (not just USDC) and plans to support other blockchain networks and provide fiat deposit services. This service supports most countries/regions globally except for Cuba, North Korea, Iran, Syria, Belarus, and Russia. In addition to crypto payments, Utopia Labs also provides treasury management for Safe (formerly Gnosis Safe) users, offering token swap services through integration with the 0x protocol, with liquidity spanning over 100 decentralized exchanges.

Previously, Utopia Labs focused on creating a DAO payroll payment system and raised $23 million in Series A funding led by Paradigm, with participation from Circle Ventures and Coinbase Ventures, achieving a valuation of $115 million.

Trends and Features Summary

Although the implementation methods of the above products vary, we can see certain consistencies presented by non-custodial payment consumer products at this stage, summarized as follows:

1) Account abstraction brings a smooth user experience, providing users with a seamless experience of using cryptocurrency like traditional credit cards.

Without exception, these products have put significant effort into user experience. Although they are crypto-native and non-custodial wallets, their experience is as smooth as traditional payment tools, mainly thanks to the application of the ERC-4337 account abstraction standard, which abstracts away the complexity of the underlying technology, removing a series of complex concepts such as wallet addresses, blockchains, keys, mnemonics, and ETH gas fees, allowing novice users to use cryptocurrency for payments and transfers without worry.

2) Additionally, as David Hoffman from Bankless felt at ETHCC, "the underlying performance optimization is ready, waiting for the bull market and users to arrive," the optimization and improvement of these underlying solutions will significantly reduce payment costs.

3) Non-custodial wallets mean that centralized entities like banks or exchanges cannot access users' funds. For consumers, this is an increasingly attractive practical demand, especially after the FTX incident. Non-custodial does not mean non-compliant; on the contrary, to gain adoption, compliance is necessary, moving in the right direction. This is also a trend we observe. Fractal provides KYC identity verification services to ensure compliance with "data privacy" laws. Additionally, Gnosis Pay's partners will conduct anti-money laundering (AML) and counter-terrorism financing (CFT) screening on funds entering the L2 account. For Gnosis Pay, the L2 solution built on Polygon zkEVM not only processes a large volume of payments at low cost but also ensures final compliance.

4) The freely combinable underlying technology stack is equivalent to developing products while standing on the shoulders of giants.

One of the benefits of blockchain technology is "permissionless openness and composability," meaning that most of the time, creating an application does not require starting from scratch but can make full use of existing foundational components.

This is a typical feature of most Web3 products. The Web3 social graph protocol Lens Protocol is a representative case, forming a thriving ecosystem based on multiple technology stacks, where they are mutually compatible and can be freely combined, using existing components while also being willing to be used by others. This approach can greatly enhance productivity.

As a type of consumer product, non-custodial wallets are no exception. To reduce transaction fees, they generally use layer two scaling solutions, and to optimize user experience, they need to use account abstraction standards, as well as very important standardized compliance services provided for decentralized finance.

Taking Gnosis Pay as an example, the founder shared the underlying technology stack diagram of Gnosis Pay, which includes: Safe for implementing account abstraction, Gelato for gasless transactions, the layer two chain developed using Polygon zkEVM, and Monerium for providing withdrawal and deposit solutions.

EthCC made us feel that "the underlying performance optimization is ready, waiting for users to arrive." As the underlying blockchain infrastructure gradually matures and improves, along with the rise of various protocol layers and middleware, this approach of developing products while standing on the shoulders of giants may change the current scarcity of consumer products.

5) Integration with existing financial systems.

The smooth crypto-native payment experience is backed by a series of very complex processes, including integration with traditional financial systems such as Visa and MasterCard.

Additionally, regulated electronic money institutions (EMIs) like Monerium also play a bridging role. As the world's first Web3 IBAN, Monerium allows users to obtain an IBAN account that can "be used to send and receive euros in the SEPA system (including CEX)" after linking their wallet addresses. It supports users in using its authorized and regulated Web3 euro token "EURe" on Ethereum, Polygon, and Gnosis, as well as sending and receiving euros between any bank account and Web3 wallets (Metamask, Safe, and Argent).