In a progressive stride towards a seamless customer experience, New York’s Cogni Neobank has incorporated soul-bound Non-Fungible Tokens (NFTs) into its Know Your Customer (KYC) verification mechanism. This innovative move aligns with the recent introduction of its cryptocurrency wallet, where customers’ KYC data will be securely stored within the framework of a Web3 ecosystem.
The NFT-powered verification system comes on the heels of Cogni’s noncustodial, multichain cryptocurrency wallet, launched four months ago. This advanced wallet facilitates the sending, receiving, and storing of cryptocurrencies and NFTs. Importantly, it will also mint the soul-bound NFTs – nontransferable tokens designed to securely encapsulate users’ KYC details. These details can then be shared with decentralized applications (dApps) at the discretion of the token holder.
The benefit is simple: facilitating mass adoption by bringing KYC compliance from Web2 👉🏾 Web3.
— Polygon (Labs) (@0xPolygonLabs) April 27, 2023
Cogni’s Founder and CEO, Archie Raviskankar, highlighted the twin objectives behind this initiative. Firstly, to significantly enhance the user experience for those exploring the crypto space. Secondly, to instill trust in the decentralized ecosystem.
The Rationale Behind Choosing Soul-bound NFTs Soul-bound NFTs, blockchain assets that confirm ownership of an item, either physical or digital, are unique in that they are nontransferable. This feature renders them ideal for maintaining perpetual records.
For Cogni, these NFTs will contain “bank-level” KYC information compliant with US regulations. This stored information will expedite the access to partnered dApps, eliminating the need for repeated KYC processes. In its future roadmap, Cogni envisions a marketplace of dApps that can effortlessly access these soul-bound NFTs for user KYC data with just a few clicks.
This innovative use of soul-bound tokens will initially be available to a select group of members, with a broader rollout expected by summer.