Monerium: The Hero Behind the Scenes, Issuing IBANs for Web3 Wallets and Powering Gnosis Cards
#575
GM,
Today, there are four things I'd like to announce.
Firstly, this Saturday (11/25) is the winter gathering for Blocktrend members! Last week, I've been sending out confirmation and supplementary notices. Members who have received the emails, please make sure to set aside the time. The office area of Taipei 101 has access control, so I recommend arriving around 13:30. You can find Blocktrend staff on the first floor for check-in. In case of late arrival or unable to find staff, I've also activated the Chat function on Substack. Feel free to reach out there for assistance.
The second event is the ongoing Gitcoin Grants 19 public goods fundraising. Blocktrend will allocate a portion of the funds raised to compensate all podcast guests from this past season based on the fundraising results. This might be the first instance globally where media distributes compensation to podcast guests using Web3 public funds. We invite everyone to participate in this groundbreaking initiative. You can refer to the process guide in this article or the voting guide I've created for more information.
The third and fourth events are the international forum "Funding the Commons" in December (discount code BLOCKTREND) and the Taipei Blockchain Week (discount code blocktrend50). Both of these events come highly recommended! At "Funding the Commons," I will share Blocktrend's participation in public goods fundraising over the past year and the challenges encountered. Taipei Blockchain Week features a strong lineup, with Ethereum's Vitalik Buterin and Coinbase's CEO Brian Armstrong among the participants. Registration links and discount codes are provided above, feel free to use them. Now, let's get to the main topic!
Last week, Blocktrend discussed the Gnosis card, a Visa financial card1 that can directly deduct funds from personal wallets. The article received much praise from readers and quickly climbed the popularity rankings on the site. At that time, I skipped the introduction to the Safe multi-signature wallet and hadn't yet figured out why Web3 wallets could obtain the International Bank Account Number (IBAN), typically accessible only through traditional bank accounts.
After a complete investigation, I discovered that the key lies in the partnership with Monerium, the business of which is quite unique. Monerium specializes in issuing IBANs for Web3 wallets, allowing them not only to receive cryptocurrencies but also to receive Euro transfers from traditional banks. This article will first explain what Monerium does and then discuss its potential impact on the development of cryptocurrency payments.
The Hero Behind the Scenes
I'll use the diagram below to illustrate the innovation of the Gnosis card.
In the past, if people wanted to use the cryptocurrencies in their wallets for daily expenses, the process was quite cumbersome. They had to convert the cryptocurrencies into fiat currency and deposit them into a bank account before being able to spend using a financial card. It wasn't until 2016 when the Crypto.com exchange pioneered the simplification of this process by issuing a Visa card, allowing users to spend their cryptocurrencies without leaving the exchange app. Moreover, each transaction earned users the cryptocurrency CRO as cashback, sparking a global trend of card issuance.
Since the closure of FTX at the end of 2022, people have come to realize that centralized exchanges are not as reliable as they once thought. In the event of an exchange closure, financial cards are likely to be affected. Recently, Gnosis has proposed a new mechanism and issued the Gnosis card to address centralized risks.
Gnosis has decentralized the debit account of the financial card from the exchange to individual wallets. With funds stored in personal wallets, users are no longer affected in the case of exchange hacks or closures. In other words, the decentralization of the debit account for the financial card, coupled with the use of a cryptocurrency (Euro stablecoin EUR.e), represents the major innovation of the Gnosis card. Strictly speaking, the innovation of the Gnosis card is built upon the achievements of another company — Monerium — making it appropriate to consider Monerium as a significant planner behind the scenes.
Euro Stablecoin
Founded in 2015, Monerium is an electronic payment company headquartered in Iceland. If compared to a Taiwanese company, Monerium can be likened to the European equivalent of an electronic payment service like iPASS or EasyCard, legally issuing electronic currency. While iPASS and EasyCard issue electronic currency based on the balance stored in their respective cards, Monerium issues electronic currency in the form of EURe, a Euro stablecoin, stored in people's cryptocurrency wallets.
According to Monerium:
EURe is the first fully regulated Euro stablecoin and the only on-chain legal tender that can be transferred directly between bank accounts and Web3 wallets. EURe can be used on Ethereum, Gnosis, and Polygon, with cross-chain interoperability, providing autonomy and security. EURe is not only a fully reserved liquid asset at a 1:1 ratio, but holders can also redeem it at any time. Unlike banks, electronic payment institutions like us can only hold customer funds and cannot engage in lending activities.
Monerium's core business is the issuance of EURe, the Euro stablecoin, following a model similar to Tether and Circle — individuals can mint EURe by depositing Euros into their bank accounts, and conversely, they can redeem Euros by destroying EURe. However, unlike Tether and Circle, which restrict stablecoin issuance and redemption to major clients, Monerium opens participation to retail users and simplifies the process significantly.
Users can apply for an International Bank Account Number (IBAN) from Monerium using their personal cryptocurrency wallets, such as MetaMask, Argent, or Safe. Once obtained, your cryptocurrency wallet becomes akin to having a unique code understood by traditional financial networks. In the future, any Euro transferred to this bank account will automatically be exchanged by Monerium at a 1:1 ratio into EURe, the Euro stablecoin, and transferred to the corresponding cryptocurrency wallet.
In the reverse process, withdrawing EURe from the wallet to convert it back to Euros for deposit is also straightforward. The ideal process would involve users simply opening their wallets, entering the bank account as the receiving address, but MetaMask wallets are unable to interpret the IBAN codes used by banks. Therefore, users currently need to open the Monerium website to connect their wallets to transfer EURe to another bank account. Within seconds, the recipient's bank account will receive a Euro transfer.
Recently, a Dutch citizen successfully followed this procedure to pay taxes to the government using EURe, the Euro stablecoin.
This user, driven by an experimental spirit, decided to test whether the Monerium process was indeed feasible. During tax filing, the user chose bank transfer as the payment method and entered the bank account of the Dutch tax authorities in the receiving address field. Subsequently, they transferred Euro stablecoins from their wallet. As expected, not long after, the user received confirmation from the Dutch government. Monerium successfully completed the task, facilitating the transfer of Euro stablecoins to the bank account.
For most people, this process seems magical — can Web3 wallets really transfer Euros? Can the Dutch government accept cryptocurrencies? The answer is neither. The wallet still transfers cryptocurrencies, while the Dutch government receives Euros in the bank account. Monerium has bridged the gap between banks and wallets by issuing EURe, and the innovation of the Gnosis card is built upon this achievement. When people use the Gnosis card to make payments, the EURe in their wallet is similarly converted into Euros and paid to the merchant.
Monerium has significantly simplified the cryptocurrency payment process, and its level of innovation can even be compared to Visa's support for cryptocurrency payments2.
Payment Innovation
Imagine you own a coffee shop, and customers can choose to pay with a card. Now, not only can you receive bank transfers from Visa, but you can also provide a cryptocurrency wallet address to Visa, asking them to transfer USDC stablecoins to you. From the consumer's perspective, if you have a cryptocurrency financial card issued by an exchange, Visa is now willing to let you directly use USDC from your exchange account as cash to pay your card bills. Almost as if, in Visa's eyes, USDC has become a "legal tender."
While Visa is willing to deal directly with cryptocurrencies, the banking system is more conservative. Even if there are banks willing to directly accept cryptocurrencies, the payment networks between banks do not yet support it. As a result, if people want to convert cryptocurrencies into bank deposits, they still need to go through centralized exchanges. Monerium breaks this limitation with stablecoins, allowing bank accounts and Web3 wallets to interoperate in specific situations.
If someone were to issue a TWD stablecoin in the future, emphasizing that users can apply for a virtual bank account for their Web3 wallet, any new TWD transferred to this account would automatically become TWD stablecoins. Conversely, people could also transfer TWD stablecoins to other bank accounts. At this point, people would naturally start thinking about how to convert TWD stablecoins into other digital assets on the blockchain. This could be a new opportunity to introduce TWD into the Web3 world.
Previously, I couldn't imagine why someone would issue a TWD stablecoin, and there were no successful cases in the market. It wasn't until I saw Monerium that I realized it could not only reduce people's reliance on centralized exchanges but also potentially enable us to use Web3 TWD in a decentralized world one day.
Blocktrend is an independent media platform sustained by reader-paid subscriptions. If you think the articles from Blocktrend are good, feel free to share this article, join the member-created Discord for discussion, or add this article to your Web3 records by collecting the Writing NFT.
In addition, please recommend Blocktrend to your friends and family. If you want to review past content published by Blocktrend, you can refer to the article list. As many readers often ask for my referral codes, I have compiled them into a single page for everyone's convenience. You are welcome to use them.