Crypto Neobanks and the Rebuilding of the Financial Stack

In October 2024, Stripe agreed to acquire Bridge for $1.1 billion, the company's largest acquisition to date. In 2024, stablecoin transaction volume reached $15.6 trillion, exceeding Visa's total payment volume by 19%. By the end of 2025, that figure had grown again: reported stablecoin volume hit $33 trillion, a 72% year-on-year increase that substantially exceeded Visa's $16.7 trillion fiscal year results.

The Bridge acquisition is one of many recent deals reshaping the boundary between payments, financial infrastructure, and blockchains. Mastercard agreed to acquire BVNK for up to $1.8 billion, while Ripple acquired Rail for $200 million. In parallel, Société Générale launched a dollar-pegged stablecoin, BBVA confirmed it would launch its own euro-pegged stablecoin in 2026, and the Hong Kong Monetary Authority issued its first stablecoin licenses to HSBC and Anchorpoint Financial (a Standard Chartered joint venture) in April 2026. Coinbase, PayPal, Revolut, and Kraken have all moved to obtain banking or trust licenses.

On the regulatory side, the GENIUS Act was signed into law in July 2025, establishing the US federal framework for payment stablecoin issuance with rules covering reserves, redemption, and supervision of issuers. The broader Digital Asset Market Clarity Act passed the House in July 2025 and is currently working its way through the Senate.

All this is clear evidence that the financial stack is being rebuilt with stablecoins as the settlement layer. What's more, this is happening from two directions at once: crypto-native firms are moving up into consumer and business banking, while traditional banks and fintechs are adopting onchain rails.

There are several reasons why both legacy financial companies and crypto-native upstarts are moving into this space. Stablecoins have several advantages over traditional payments and banking infrastructure, with users and companies able to move them at low cost and high speed, enabling them to transact across borders cheaply and quickly. They also present efficiency gains over legacy infrastructure, and can settle near-instantly and directly without the need for intermediaries.

While there are various different models and use cases here, one key trend is the creation of what might be termed "crypto neobanks": financial institutions that are fulfilling many of the roles of banks, but are doing so with stablecoins as the settlement layer.

In this piece, we'll dive into what this term means in greater detail before covering some of the key use cases, infrastructural architectures, and the necessary steps still needed to make this model the default for consumer and business financial operations.

What Is a Crypto Neobank?

A crypto neobank is a financial institution that offers consumer or business banking services with stablecoins as the settlement layer, either built natively on onchain rails or through stablecoin features layered onto existing fintech products.

The term covers at least three distinct kinds of company. Let's look at each in turn.

Crypto-Native Neobanks

These solutions are native to stablecoin rails, offering dollar accounts, debit cards, and global payouts to retail users. RedotPay, KAST, DolarApp, Mode, and Lava sit here. RedotPay alone reached over 6 million registered users in more than 100 markets by November 2025, with $10 billion in annualized payment volume and $150 million in annualized revenue. KAST, founded in July 2024 by a former Circle executive, serves more than one million users and processes nearly $5 billion in annualized transaction volume. Companies like Dakota are building dollar accounts and treasury products for businesses that operate across borders or hold reserves in stablecoins.

Stablecoin Infrastructure Providers

Solutions like Bridge (now Stripe), Reap, and, BVNK offer onchain-native payment rails that enable both crypto-native and legacy companies to provide stablecoin-based services, like virtual account systems, payout APIs, FX corridors, and stablecoin issuance platforms.

Traditional Fintechs and Banks Offering Stablecoin Features

Revolut, Cash App, Nubank, Mercado Pago, Standard Chartered, BBVA, and JPMorgan are increasingly offering services based on stablecoin settlement. These run alongside their standard services, giving users another option with the same UX, or are otherwise obscured under the hood.

The Stablecoin Stack

The stablecoin stack consists of four layers: settlement, infrastructure, product, and privacy.

The underlying architecture across crypto-native neobanks, infrastructure providers, and fintech adopters is consistent and can be broken down into four layers: a settlement layer (the blockchains and stablecoins themselves), an infrastructure layer (the rails, ramps, custody, and tooling that make stablecoins usable in real products), a privacy layer (still the least mature part of the stack), and a product layer (the consumer or business surface that end users actually touch).

The Settlement Layer

This is the foundation: the public blockchains that settle transactions, and the stablecoins that move across them.

On the chain side, Ethereum hosts approximately 70% of all stablecoin supply, but the activity has increasingly fragmented across faster, lower-cost networks. Base, Solana, Arbitrum, Polygon, and Optimism have all become significant venues for stablecoin payments, while Tron remains the dominant chain for USDT in emerging markets. New stablecoin-specific chains like Tempo (Stripe/Paradigm), Plasma, and Stable are emerging with stablecoin payments as their core use case.

On the stablecoin side, USDT (~$187B) and USDC (~$75B) together account for over 80% of supply, but the issuer landscape has broadened significantly: PayPal's PYUSD, Ripple's RLUSD, Societe Generale's USD CoinVertible, and a long tail of fintech- and bank-issued stablecoins have entered the market. A parallel category of yield-bearing stablecoins, including BlackRock's BUIDL, Ondo's USDY, and Ethena's sUSDe and USDe, makes it possible to hold dollar reserves onchain that earn Treasury-equivalent yields without leaving the rails.

The properties of this layer are the reason the rest of the stack exists at all: 24/7 availability, near-instant settlement, programmability, and global reach at a small fraction of legacy costs.

The Infrastructure Layer

This is the layer that has consolidated the fastest and where most of the recent M&A activity has happened. It covers everything needed to turn raw onchain settlement into something usable as a complete financial product.

Custody. Institutional custody is dominated by Anchorage Digital (a federally chartered digital asset bank), BitGo, Fireblocks, Coinbase Custody, and Copper. Most crypto neobanks and infra providers rely on one or more of these rather than self-custodying customer funds.

Onramps and offramps. MoonPay, Transak, Ramp, and Banxa handle the bulk of consumer fiat-to-stablecoin conversion. For business and emerging-market flows, regional exchanges like Bitso (Latin America), Coins.ph (Philippines), and Luno (Africa) act as the offramp into local currency.

Virtual accounts and stablecoin issuance APIs. Bridge (now Stripe), Conduit, BVNK, Reap, Iron (now MoonPay), Beam (now Modern Treasury), and M0 sit here. 

They provide virtual IBANs, USD virtual accounts, payout APIs, and stablecoin issuance infrastructure, often abstracting the choice of underlying chain and stablecoin entirely. This is the category that powers most "crypto-friendly bank account" products on the market.

Wallet infrastructure. Privy, Dynamic, Turnkey, Magic, and Para handle wallet creation, key management, and authentication for end users. Crypto neobanks increasingly use these to abstract away seed phrases and make wallet creation feel like a normal signup flow.

Card issuance and BIN sponsorship. Rain has emerged as a dominant provider, powering cards for KAST, RedotPay, ether.fi Cash, and dozens of other crypto neobanks. Reap, Stripe Issuing, and traditional providers like Marqeta also operate in this space, with Rain reported to hold a majority share of crypto card volumes globally.

Compliance and identity. Chainalysis, Elliptic, and TRM Labs handle blockchain analytics and Travel Rule compliance, while Sumsub, Persona, Veriff, and Alloy handle KYC, AML, and identity orchestration. Compliance tooling is increasingly bundled into the larger infrastructure providers rather than purchased separately.

The Privacy Layer

This is the least mature layer of the stack, and the one that most directly limits adoption beyond crypto-native users. Most stablecoin activity today sits on public blockchains by default, which is a non-starter for any serious financial operation that involves payroll data, supplier relationships, treasury positions, or consumer balances.

Three architectural approaches have emerged to address this: permissioned or private ledgers (Canton Network with Circle's USDCx), stablecoin-specific chains with private execution environments (Tempo Zones), and confidentiality at the smart contract level on existing public chains (the category Inco sits in). We cover these in more detail below.

The Product Layer

This is the surface that end users interact with.

Crypto-native consumer products include RedotPay, KAST, DolarApp, Mode, and Lava, alongside business banking products like Dakota. Major crypto wallets are increasingly becoming neobank-like products in their own right: MetaMask uses mUSD as a stablecoin tied to its card product, and Phantom uses CASH as the funding source for its debit card. Both signal a broader shift: wallets are no longer just key managers, they are becoming consumer financial products.

Cards are a major passage of adoption for crypto-native neobanks, with users often opting for a card linked to their crypto holdings as a key step in moving from crypto as a store of value or investment to day-to-day spending. Crypto card designs vary, with some linked directly to a self-hosted wallet, others to a centralized exchange or custodial account, and others operating as standard prepaid cards funded from a stablecoin balance (we cover the full taxonomy here). Despite the variety, the underlying issuance and BIN sponsorship sits with a small group of specialists, and the consolidation has gone far enough that crypto neobanks and wallets now compete almost entirely at the product, stablecoin, and distribution layers. Card capability itself is rented, not built.

Beyond crypto-native players, the product layer also includes fintechs adding stablecoin features to existing products (Revolut, Cash App, Robinhood, Nubank, Mercado Pago) and traditional banks building stablecoin-aware accounts and settlement options (Standard Chartered, BBVA, JPMorgan). The competition at this layer is largely about distribution and user experience, since the underlying settlement and infrastructure are increasingly commoditized.

The maturity of the stack varies sharply by layer. Settlement is solved, infrastructure has consolidated into a recognizable set of providers, many of which have been acquired and added into more mature product offerings. The product layer is where competition is fiercest, and the privacy layer needs the most work to bring the experience up to the level of traditional financial operations.

The rest of this piece looks at what the stack enables today, where it is being adopted, and what the privacy layer needs to look like.

Key Use Cases

With the stack mapped, the next question is what it can be used for and its benefits in each case. The legacy alternative across each of the use cases below can be slow and expensive in ways that matter at scale.

Remittances

Remittances are the most-cited example, and for good reason. A traditional World Bank-tracked remittance corridor costs an average of 6 to 7% in fees plus FX spread; a USDC corridor through a provider like Bitso costs under 1% all-in. Félix, which routes U.S.-to-Mexico transfers through USDC on Stellar, reduced its transaction fee from $4.98 to $2.99, a 40% saving for end customers, while settling near-instantly on nights and weekends. The architecture is straightforward: U.S. dollars come in via ACH or debit, get converted to USDC, move across the chain, and settle into Mexican pesos through SPEI on the receiving end. Bitso processes over $1 billion in monthly stablecoin volume between the U.S. and Mexico.

Stablecoin remittances and P2P payments hit a $19 billion annualized run rate as of August 2025, with average transfers of $47, much smaller and more frequent than the $250 average for traditional remittances.

Dollar Access in High-Inflation Economies

Argentina ran 117.8% annual inflation in 2024 per official INDEC figures, while Venezuela ran 48% by government numbers (independent observers like the Venezuelan Finance Observatory put the real figure closer to 85%). From July 2022 to June 2025, Latin America saw $1.5 trillion in cryptocurrency transaction volume. In Argentina, Colombia, and Brazil, stablecoins make up more than 50% of exchange transactions. The pattern is the same in other parts of the world: South Asia saw stablecoin-driven crypto volumes rise 80% to $300 billion between January and July 2025, and USD-backed stablecoin supply in Asia rose sharply through 2025 as Asia-based firms used USD stablecoins to trade and settle. 

In these economies, neobanks offering stablecoin services enable consumers to bank as normal but hedge against the depreciation of their native currency by giving them easy access to dollar-denominated stablecoins.

Cross-border B2B Payments

A São Paulo manufacturer paying a Shenzhen supplier through traditional rails faces 3% to 5% SWIFT fees and three-day settlement; the same payment through stablecoin rails settles in minutes at a fraction of the cost. Per a joint McKinsey and Artemis Analytics report published in February 2026, real-world stablecoin payments volume reached approximately $390 billion in 2025, 60% of which is B2B. That puts B2B stablecoin payments at roughly $226 billion annualized, still only about 0.01% of the $1.6 quadrillion global B2B market but demonstrating fast growth (B2B stablecoin payments rose 733% year over year in 2025).

Payroll

Payroll is the use case with the steepest current adoption curve. Companies like Deel, Rise, and Toku route stablecoin payouts to contractors and employees across borders, plugging into existing HR systems. Deel and Flywire have adopted stablecoin payouts at scale, and 226 new businesses integrated stablecoins for payroll and other uses in 2025. The global workforce is increasingly distributed, but traditional payroll is still country-by-country. Stablecoin settlement makes payroll to team members distributed globally simpler, more efficient, faster, and cheaper.

Earning Yield

Stablecoin issuers held approximately $155 billion in U.S. Treasury bills by October 2025, making them collectively one of the largest holders of U.S. government debt globally. A growing class of yield-bearing stablecoins (USDY, BUIDL, sUSDe, USDe) is making it possible for businesses to hold dollar reserves that earn Treasury-like yields onchain, settle in seconds, and deploy as collateral or working capital without leaving the rails.

What's Still Missing

As introduced above, the privacy layer is the part of the stack that most participants now openly acknowledge is incomplete. The implications are worth spelling out in more detail.

A traditional bank does not broadcast its customers' statements. A crypto neobank, in its default architecture, does. For consumers this manifests as wallet profiling and MEV on conversions. For B2B and enterprise, it's a non-starter: supplier relationships, payroll structure, vendor invoices, and treasury movements are commercial secrets that no serious finance function will publish to a public ledger.

The three architectural approaches introduced above differ sharply in their tradeoffs.

Permissioned ledgers like Canton Network solve the privacy problem by isolating activity into a separate environment. Canton's partnership with Circle on USDCx, and Toku's execution of the first private, compliant stablecoin payroll on Canton in February 2026 are concrete proof that the model works. The tradeoff is liquidity fragmentation: assets move into isolated environments and lose the composability that made the public stack interesting in the first place.

Stablecoin-specific chains like Tempo (a Stripe- and Paradigm-backed layer-1 whose Zones product is a private execution environment for payroll, treasury, and tokenized deposits) preserve some composability but require neobanks and their users to migrate from the chains where liquidity, ramps, and integrations already live.

Confidentiality at the smart-contract level on existing public chains, the category Inco sits in, keeps the existing rails intact and adds the privacy layer without forcing a migration. The mechanism is encryption-based, with viewing keys that can be issued and revoked at the smart contract level, supporting selective disclosure without isolating liquidity.

There's also a structural consideration that goes beyond pure architecture: permissioned ledgers and stablecoin-specific chains associated with neobanks introduce questions of competition and sovereignty. Deploying a neobank product on a chain operated by another company (or by a competitor) introduces dependencies that do not exist on neutral public chains.

For a crypto neobank in 2026, the practical question is which architecture maps to its product. A consumer wallet routing stablecoin payments through public chains needs confidentiality at the transaction level so balances and flows aren't profile-able. A business banking product needs confidentiality plus selective disclosure for compliance. A treasury platform needs encrypted positions that still settle into the same liquidity that DeFi composability depends on. A payroll provider needs salary amounts encrypted by default but auditable on request.

These considerations are key for any onchain stablecoin operation.

Next-Generation Financial Infrastructure

The next few years are likely to see a convergence of crypto-native neobanks, fintechs, and traditional financial institutions on stablecoin rails. "Crypto neobank" may cease to be a useful term as the dominant fintechs all offer stablecoin features and the dominant crypto consumer apps all look like banks.

What remains is for the stack to fully mature. Settlement is solved. Infrastructure has consolidated and is now competing on integration depth rather than capability. The product layer is where competition is fiercest, and where the relationship between distribution and underlying technology is still being worked out. The privacy layer is the last major piece, and the one that determines whether the model scales to truly meet the mainstream.

For more about how Inco supplies the privacy layer to the stablecoin stack, check out Inco Lightning.