How ‘Neobanks’ are Bridging the Gap Between Traditional Finance and Web3

The emergence of cryptocurrency and the world of Web3 has given rise to a host of crypto-specific platforms and exchanges which provide familiar banking services for those holding crypto.

These platforms provide storage, transaction and even investment services for crypto-asset holders, but using them in concurrence with the traditional fiat banking system has proven to be a stumbling block.

Many banks limit or prohibit transactions to crypto platforms like Coinbase, Binance and others, making the cross-over from fiat to crypto difficult, or in many cases, impossible.

Now, a new breed of financial platforms known as 'neobanks' are helping bridge this divide between traditional banking and crypto. These neobanks seek to combine the best of both worlds under a single roof, and remove the friction that comes with navigating from one financial realm to the other. 

Combining Fiat and Crypto Services

In the past few years, several household names in the personal banking space have made the decision to integrate cryptocurrency services into their platforms. Examples of this can be seen in apps like the Cash App, Revolut, PayPal, and numerous others.

These apps typically allow for the native purchase and storage of cryptocurrencies, making it easier for the average investor to access crypto without going through a separate platform. 

However, such apps rarely go the full distance to integrate the all-encompassing Web3 experience. They do a successful job at enabling access to cryptocurrencies in the first instance, but this is usually where their utility stops.

Introducing Neobanks

Neobanks on the other hand look to combine the full length and breadth of the Web3 experience with traditional finance, representing a true one-stop-shop for interchangeably using cryptocurrency and fiat at the same time.

The latest breed of Neobanks not only combine the potential to transact in fiat and crypto on the same platform, but also allow for the management of savings accounts, membership cards, and cryptocurrencies all from a single app.

This holistic approach to bridging the Web3 divide allows for simple management of one's finances without incurring any extra cost, and without signing up for additional services.

One example can be seen in enfineo, which offers the features noted above alongside a range of Web3-specific services such as integrated token loyalty programs, decentralized finance (DeFi) tools, and more. Upon signing up to enfineo, users not only get their own multi-currency crypto wallet, but also an IBAN number, a Mastercard debit card that can be used with fiat or crypto, and more. 

"One of the main obstacles to the growth of the Web3 space is bringing new users on board. By offering a simplified, all-in-one user experience where we take care of all the complicated stuff behind the scenes, we aim to make using crypto less ominous for the average investor," said enfineo CEO, Alin George Luca.

Luca's words echo one of the main prerogatives of startups in the cryptocurrency space – namely, simplifying the onboarding process for new users. Examples of this strain of thought can be seen in the actions of the likes of Coinbase and other major exchanges, which are now enabling simplified one-click logins using passkeys from Google, Apple and Microsoft. 

Bringing familiar methods and processes to the Web3 space is becoming all the more common in the quest to attract new users, and neobanks are now embracing this approach.

Neobanks like enfineo are also ensuring peace of mind by embracing the latest crypto MiCa regulations, alongside traditional finance regulations, creating platforms where the entire fiat-to-crypto process can be accessed without fear or hesitation.

As cryptocurrency continues to rearrange the financial landscape, neobanks are emerging to bridge the gaps between the old and the new.