Author: Tom White, partner at Benzinga
Once, neobanks promised a revolution: they were supposed to simplify finance and make it accessible, engaging those who were overlooked by traditional banks. However, over the years, the centralization of neobanks and their reliance on outdated systems limited their impact.
The evolution continues with Deobank — a decentralized on-chain bank that transfers the elegant mobile design of neobanks onto the blockchain rails. Paperless KYC, instant global payments, and secure self-custody of funds become accessible to all, making a leap in financial inclusion.
From Neobanks to DeFi
When neobanks emerged, it was a breath of fresh air. Traditional banks with their overcrowded offices, cumbersome money transfers, and paperwork became a thing of the past. New solutions like Revolut and Chime shook up the market: they eliminated physical branches and introduced user-friendly apps with real-time analytics.
Digital transformation has been gaining momentum; however, neobanks have failed to move away from traditional banking infrastructure, leaving its core issues unresolved.
1.4 billion people worldwide remain unbanked. Approximately 29% of the population in developing countries do not have a bank account — mainly due to a lack of money, the remoteness of the nearest financial institutions, and insufficient documentation. Structures relied upon by neobanks require people to have sufficient paper identification to open an account — which they often do not have. Traditional KYC practices create barriers that are insurmountable for millions of people.
Banking policies regarding anti-money laundering allow for sudden account freezes without prior notice, making customers vulnerable to arbitrary decisions by institutions. Finally, outdated systems suffer from slow interbank transactions and offer low transparency: users remain unaware of how their funds are stored and managed.
Neobanks have done significant work to simplify banking services, but their underlying infrastructure has hindered efficiency and financial inclusion. This is where blockchain offers an alternative.
Decentralized Finance (DeFi), a blockchain-based financial ecosystem, emerged as a response to inaccessible centralized solutions. Their vision was simple: to create a trustless, inclusive environment where anyone could participate regardless of their location, citizenship, credit history, and wealth. Anyone with just a mobile phone and an internet connection could access financial services such as lending, borrowing, earning interest, and instant cross-border transactions.
This vision has resonated with many: the total market capitalization of DeFi has grown from $600 million in 2020 to $98 billion in 2025. Broader factors support this trend: the number of monthly active crypto users last year was 220 million, while the usage of mobile wallets reached record highs.
DeFi has harnessed the best opportunities of blockchain technology. Users store cryptocurrency in their own wallets, meaning they have full control over their funds: no central organization can arbitrarily block them due to the slightest suspicion. Money transfers occur in seconds rather than days, and costs drop to a few cents. Anyone can join any service they wish without any permissions. For example, you don’t need a credit check to borrow cryptocurrency from a decentralized lending protocol: if you already have some coins, they will serve as collateral.
Despite their advantages, DeFi has mainly gained popularity only among tech-savvy audiences. Wallets and platforms are often complex and lack intuitive interfaces, making them confusing for the average consumer. Poor integration with traditional finance limits real use cases — for instance, the ability to spend cryptocurrency on everyday needs.
Deobanking returns to the original vision of DeFi: inclusive finance for all and a convenient alternative to restrictive traditional tools.
Deobank: Banking on the Rails of DeFi
Deobank is a term first used by WeFi — a banking platform launched by former executives of Tether, Wise, Exflow, and Tradeleaf. It takes the elegant interface of neobanks and combines it with the financial freedom of DeFi. The main goal of Deobank is to make DeFi simple: to wrap decentralized tools in familiar banking functions, simplifying onboarding for the masses.
1.4 billion unbanked users are in need of this simplicity. One part of this population wants to join the financial system but cannot — banks often require paper identification and stable employment in a corporation, leaving those without these privileges behind. The first-of-its-kind Deobank ecosystem will gradually implement paperless AI-based KYC with behavioral identification, opening doors for everyone who needs access to financial services.
Another part of the unbanked population does not trust centralized institutions and prefers to store money themselves. For those who want to maintain full control over their finances, WeFi offers non-custodial accounts. Users store their funds on-chain and own the private keys, making it impossible to impose withdrawal limits or block their accounts.
At the core of Deobanking are stablecoins. They enable almost instant transactions with minor fees — something the blockchain infrastructure can boast of since all intermediaries are removed. Stablecoins are easy to use and allow users to maintain control over their funds. They also support many other DeFi functions: clients can make deposits and earn interest, take loans, stake, and provide liquidity to grow their portfolio. Early users and miners of WFI tokens can receive exclusive rewards, contrasting with the low user engagement rates of neobanks.
WeFi's vision for the future encompasses two directions: empowering DeFi and strengthening the platform's use cases. In the first case, WeFi integrates with the Omnichain LayerZero protocol, connecting to other blockchains. In the second case, virtual VISA cards will be introduced so that users can spend their cryptocurrency anywhere in the world with a single touch (through Google Pay and Apple Pay); withdrawing cash at ATMs and swapping cash for stablecoins are also on the agenda.
WeFi's strategic bet on stablecoins is made when their total market capitalization reaches a record high of $230 billion. Meanwhile, traders are increasingly migrating from centralized platforms to decentralized exchanges. This signals high demand for self-controlled and borderless money, paving the way for a new generation of financial services.
