FinTech company Kima is teaming up with Mastercard’s FinSec Innovation Lab, with support from the Israel Innovation Authority, to launch a project integrating decentralized finance (DeFi) with traditional banking services. 

Mastercard and Kima Develop “DeFi Credit Cards”

Kima, a decentralized peer-to-peer money transfer protocol, received a grant from the Israel Innovation Authority (IIA) and joined Mastercard’s FinSec Innovation Lab initiative. The collaboration aims to develop a “DeFi credit card,” a tool linking traditional financial services with DeFi protocols.

FinSec Innovation Lab is a joint initiative between Mastercard, the Israel Innovation Authority, the Israel National Cyber Directorate, and Israel’s Ministry of Finance. Founded in 2020, its main goal is to promote innovation in financial technology and cybersecurity for payment systems. FinSec Innovation Lab collaborates with Israeli startups, allowing them to test and develop products, model complex financial processes, and develop solutions under the guidance of professionals.

The collaboration between Kima and FinSec Innovation Lab seeks to expand the capabilities of the Kima payment protocol, which facilitates direct money transfers through blockchain systems and bank accounts without using smart contracts. Mastercard will leverage its infrastructure to explore and develop innovative remittance methods, linking bank accounts and credit cards to various DeFi ecosystem tools.

FinSec Innovation Lab will become a validator of the Kima node and act as a key stakeholder within the network as part of the project. Mastercard’s participation in the project will strengthen the Kima payment protocol in anticipation of the upcoming launch of the mainnet and native tokens, scheduled for Q2 2024. 

According to Eitan Katz, CEO and Co-Founder of Kima, the payment provider’s settlement layer allows it to handle cross-border transfers and cryptocurrency payments, serving a wide range of DeFi apps, including lending protocols, GameFi projects, marketplaces, wallets, and exchanges. Katz believes that the only barrier to mass integration of DeFi and TradFi is having an easily accessible and secure way to combine them.

Kima is a decentralized P2P transfer protocol that doesn’t depend on infrastructure. Kima’s software platform enables the transfer of value within any financial infrastructure, whether or not it utilizes blockchain. The protocol is based on a new financial primitive known as Smart Transaction and a simple and straightforward SDK designed to allow Web3 apps to interact with Web2 ecosystems.

The project enables financial transfers and payments using hybrid and cross-chain transactions. The system allows for the use of any asset class, eliminating regulatory and financial risks while maintaining high security. With this, Kima has the potential to bring together decentralized apps, FinTech companies, banks, and other traditional financial institutions.

Mastercard is actively involved in developing the Web3 ecosystem, collaborating with blockchain companies 1inch, MoonPay, Stables, Immersve, Binance, Paxos, and others. The payments giant is also exploring the prospects of CBDCs and testing the possibilities of tokenized assets.

Author: Nataly Antonenko
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