Neobanks has been on the rise. Not just in the traditional fintech market but also in the crypto space. A lot of players are in the motion to compete in the crypto market for the Neobanks services.
In United States, Singapore, India and United Kingdom many such small banks that have purely digital footprint are popping up. And mind you they are not illegal. They are legal and follow every rule in the book.
They offer basic financial services and the savings options which kind of make it easy for anyone to have an account with them.
Imagine such banks would have crypto support along with the FIAT services. This could change the way global finance works. Neobanks can change the future in the crypto space.
Now what are Neobanks? What problems are they solving?
Let's talk about Neobanks in Crypto Space.
What are Neobanks?
Remember the time when banks used to question you why you want an account? What are your earning sources? Today those days are gone. They want your money. And they are ready to even give you mini account which is purely for digital payment use.
Such type of account which is digital only and has no paperwork and offline footprint would be called Neobank. You can use the app to pay for the offline bills in the POS, you can pay online and you get all the online services. No need to go to the bank.
Such banks being purely digital footprint are called - Neobanks. A lot of such banks are making it easy for small city people and the people with limited funds to have an account and deal in financial terms easily.
How does Neobank works in Crypto Space?
Just like Binance allowing you to hold the crypto. Such banks would be allowing you crypto holding and also various FIAT to crypto and vice versa can be done here. You would use it for accepting and sending the crypto to the other accounts.
Celsius and NEXO were moving towards becoming the Neobank but they have no real bank license from the govt. Nor do they have any international banking licenses. So they failed to become the Neobank.
In crypto space, there are lot of opportunities for blockchain based NeoBanks to change the banking sector. They can get rid of a lot of FOREX related issues taken care of and also it'd be profitable for licenses banks and the govt to benefit in this space with global transactions.
What use case does it have?
Most of the Neobanks are aimed at people who want to avoid the exposure to the big accounts with money. And this way they can keep the scam and the manipulators away from the secure accounts.
Many NeoBanks have the use case of handling the digital bank accounts for the urban areas and the areas in the rural places too where establishing the bank premise is hard in most cases.
As long as there is an internet access, Neobanks serve the customer with the financial limit on their hold and limits. A lot of normal banks use case applies within certain conditions and it can turn out to be a good future for everyday usage in consumer space.
What does the future hold?
Imagine if CDBC comes into the picture. Such banks would be dealing with the blockchain based transactions. And you would be able to track the other person. So the scams can be reduced. So such type of the Neobanks in crypto space has a strong future.
As long as Govt, SWIFT and international banks happen to agree on the common protocol for such banks, they have a strong future ahead.
What do you think?