Neobank introduces soulbound NFTs for wallet holders’ KYC information

The small New York-based neobank is seeking to improve crypto users’ experience by melding Web3 features and digital banking.

The neobank Cogni has announced that it is rolling out soulbound nonfungible tokens 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, which has United States Federal Deposit Insurance Corporation coverage through a traditional New York bank, introduced its noncustodial multichain crypto wallet in January. Users can send, receive and hold cryptocurrencies and NFTs in the wallet. Users can optionally mint the nontransferable 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. Cogni founder and CEO Archie Ravishankar told Cointelegraph:

“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.”

“Everybody knows how to use digital banking,” however, Ravishankar added. The crypto wallet is available “in the course of the normal banking experience.”

Related: Vitalik Buterin suggests making NFTs ‘soulbound’ like World of Warcraft items

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.

Cogni: The challenger bank supported by Barclays wants to disrupt financial services 2020 https://t.co/fkVVab7W77 pic.twitter.com/yMaSFwdQj9

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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. The Cogni soulbound NFT will initially be available to select users and is expected to be open to the public in the summer.

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