Neobanks and the next big shift in banking

Open your banking app today and it probably looks nothing like the one your parents used. Your salary lands in an app. FX is a swipe. Investments sit next to your current account. For millions, “the bank” is already just an icon on their phone.

But a second shift is now underway. Instead of balances sitting in a bank’s internal ledger, they’re sitting on public blockchains. Instead of waiting days for cross-border transfers, people swipe a Visa or Mastercard that spends directly from a stablecoin balance. And instead of deposits earning close to zero, yield comes from on-chain treasuries and staking protocols. This is the promise of crypto neobanks like Ready, Krak and EtherFi.

To see why this matters, we need to zoom out: what came before neobanks, what neobanks actually are, and what crypto-native versions are trying to fix.

From branches to apps: the road to neobanks

For most of the 20th century, banking was built around physical branches, batch processing, and paper. If you wanted to open an account, wire money, or dispute a charge, you went to a branch, queued, and filled out forms.

In the 1990s and 2000s, we added online banking portals and card networks. You could finally see balances and pay bills online, but the core experience was still clunky and slow, and cross-border transfers remained expensive and opaque.

The real break came with mobile-first fintech:

• “Challenger banks” like Revolut, Monzo, Chime and N26 wrapped a modern app around banking infrastructure, offering instant onboarding, slick UX and real-time notifications. 

• Many of these are “neobanks”: digital-only financial companies offering accounts and cards with no branches, operating on top of licensed banks and payment schemes.

By the early 2020s, neobanks had gone mainstream. According to Grand View Research, the global neobanking market was worth about $66.8 billion in 2022 and is projected to reach $2.0 trillion by 2030, a compound annual growth rate of around 54–55%. Bankrate notes that global neobank users are set to grow from roughly 150 million in 2021 to around 350 million by 2026. 

So what is a neobank, really? A neobank is a digital-first financial company that offers services like checking accounts and debit cards, but operates without physical branches. Key features are:

• Digital-only distribution

  Everything happens via mobile app or web – account opening, KYC, payments, support.

• Banking-as-a-service under the hood

  Many neobanks partner with licensed banks rather than holding a full banking charter themselves. The partner bank holds deposits and connects to payment networks.

• Typical revenue model

  • Card interchange fees on every transaction

  • Subscription tiers for “Metal”/premium plans

  • Lending and credit products when they have access to a charter or regulated partner

• Product bundle

  Current accounts, cards, FX, sometimes investing and even retail crypto (e.g. Revolut’s in-app crypto trades and stock trading). 

In other words: the first revolution has already happened. We’ve moved from branches and paper to banking as an app. But the rails underneath (how money actually moves and who controls it) remained largely unchanged.

The limits of Web2 neobanks

The first generation of neobanks solved UX, but they run into structural constraints.

Same rails, slightly better experience

Payments still run through legacy schemes: ACH, SEPA, Faster Payments, card networks. International transfers are quicker and cheaper than before, but they often remain slow, expensive, or both.

Neobanks rely heavily on data aggregators like Plaid to connect siloed financial data across apps. Plaid describes itself as the “fabric” that links bank accounts to apps, so fintechs can show balances and initiate payments without becoming banks themselves.

That’s a clever patch on top of closed infrastructure – but it is still a patch.

Who earns the yield?

When you hold dollars or euros at a neobank:

• The bank or its partner can invest those deposits (e.g. in money markets or government securities).

• The customer usually sees only a small fraction of that yield, especially in low-rate or opaque markets.

  
  

The user experience is smoother, but the economics haven’t shifted much: the financial institution still captures most of the value created by your “money at rest”.

Platform and custody risk

Neobanks are still custodial:

• Your account is ultimately an IOU on the bank’s ledger.

• Accounts can be frozen, closed, or de-risked due to compliance rules, internal policies, or mistakes.

For most people that’s an acceptable trade-off. But it stands in sharp contrast to crypto’s promise of self-custody, where you control your keys and funds can’t be arbitrarily seized by a platform (within the limits of law).

Crypto Neobanks enter the fray

Crypto has quietly become mainstream. Triple-A’s 2024 crypto ownership report estimates that around 562 million people – roughly 6.8% of the global population – own cryptocurrency, up from 420 million in 2023. A parallel analysis from CoinLedger lands in a similar range. This isn’t just about speculative trading. Stablecoins and tokenized cash are now treated by consultancies like McKinsey as serious payment infrastructure, with 2025 framed as an inflection point for cross-border settlement and institutional use.

A crypto neobank is a digital-first financial app that offers bank-like features (accounts, cards, transfers) while your underlying money sits on-chain in crypto assets or stablecoins, often under your own custody.

Compared to a traditional neobank:

• Base layer

  • Neobank: fiat deposits in partner bank accounts, booked on closed ledgers.

  • Crypto neobank: stablecoins and tokens (USDC, eUSD, eETH, etc.) living on public blockchains.

  
  

• Custody model

  • Neobank: fully custodial – the institution holds client funds.

  • Crypto neobank: often self-custodial or hybrid; the app is a UX layer over wallets you control, or over fully reserved, on-chain balances.

  
  

• Yield & portfolio

  • Neobank: deposit rates are tied to traditional products.

  • Crypto neobank: yield comes from DeFi strategies, staking, and yield-bearing stablecoins – with higher upside but protocol and smart-contract risk.

  
  

• Payment rails

  • Neobank: card networks and domestic rails (ACH, SEPA, etc.).

  • Crypto neobank: card networks plus 24/7 blockchain rails for peer-to-peer and cross-border transfers.

From the user’s point of view, a typical flow looks like this: you deposit fiat or crypto into the app, it’s held or converted into on-chain assets, you earn yield by default, and you get a Visa or Mastercard that spends from that same on-chain balance.

This architecture is explored in detail in the DL News piece “Why crypto’s biggest firms are jumping on the neobank trend” (syndicated via Yahoo Finance), which shows how firms are bundling on-chain yield, cards and basic everyday banking features.

What crypto neobanks actually solve

Strip away branding and there are four core problems crypto neobanks are trying to address.

1) Making yield liquid and spendable

In traditional banking, savings and spending are split into different products, and interest is modest.

In the crypto neobank model:

• Your default balance can be a yield-bearing asset (staked ETH, DeFi stablecoin vaults, tokenized Treasuries).

• The card and current-account experience sit directly on top of that yield-earning layer.

The architecture often involves two buckets:

• “Payment stablecoins” optimized for merchant acceptance

• “Yield stablecoins” optimized for returns

Crypto neobanks blur that line and present it as one balance that still “just works” at point-of-sale.

2) Self-custody with real-world usability

Historically you had to choose between:

• Self-custody wallets: maximum control, poor UX for everyday payments

• Centralized exchanges / custodial apps: great UX, but full platform and counterparty risk

Apps like Ready try to close that gap:

• Smart-contract wallets with social recovery and no seed phrases, described in their original Argent documentation and visible in the Ready app experience

• Tight integration with cards and fiat on/off-ramps, so you don’t feel like you’re juggling an exchange and a separate wallet

At the institutional level, SPDI banks like Kraken offer a regulated way to hold digital assets with bank-grade legal protections, but in a structure explicitly built around crypto custody.

The common thread: stop forcing users to choose between control and usability.

3) Truly global, 24/7 money

Because balances live on public blockchains:

• Cross-border transfers can be near-instant and 24/7, with lower fees than many correspondent-banking chains.

• The same rails can serve Latin America, Africa, Europe, Southeast Asia – you don’t rebuild the system per region; you adapt compliance and UX.

This is particularly attractive in regions where local currencies are volatile or banking access is limited. Analyses like Advapay’s overview of launching a neobank in Latin America underline how high smartphone penetration + weak local banking creates fertile ground for these hybrid models.

At the same time, card networks themselves are moving. Visa’s stablecoin work, covered in multiple releases and commentary (for example in the DL News article above), and Mastercard’s similar experiments suggest that “card + stablecoin balance” will not remain a niche combination.

4) Composability with DeFi and Web3

Traditional neobanks can integrate investing, but they are limited by licensed products and closed APIs.

Crypto neobanks are natively programmable:

• They can tap DeFi lending protocols, tokenized T-bills, on-chain treasuries, NFTs, DAO treasuries – all via public smart contracts.

• Rewards can be tokens, governance rights, protocol fee shares, or more complex incentive structures.

Where this goes next

Zooming out, the rise of crypto neobanks is really about erasing the last big gap between:

• Money that is programmable, global and self-custodied; and

• Money that is usable for rent, payroll, grocery stores and Netflix.

A few trajectories seem likely over the next 5–10 years:

1. Traditional neobanks quietly move onto crypto rails

   Many will integrate stablecoins and tokenized deposits under the hood – for treasury, cross-border settlement and even retail payments – without necessarily branding it as “crypto” in the UI.

2. Crypto neobanks either become banks or become infra

   Some, like Kraken Financial, will double down on charters and heavy regulation. Others will lean into being infrastructure providers: wallets, cards, yield modules and compliance rails that other apps embed.

3. Users will care less about labels and more about outcomes

   For most people, the winning experience will look like:

   “My money, in one app, working for me, available anywhere, without nasty surprises.”

Whether the stack beneath that is a chartered bank, a ZK-rollup, or a hybrid SPDI + L2 arrangement may become as invisible as TCP/IP is for the web.

For now, crypto neobanks are still experimental. Some will fail, others may become the Revoluts and Nubanks of the on-chain era. But if both neobanking and crypto are here to stay, their intersection (programmable, self-custodied money with bank-grade UX) is where a lot of the interesting work will happen.