Stablecoins and self-custody are driving the rise of crypto neobanks

For years, crypto’s most ambitious builders focused on the industry’s plumbing: faster blockchains, cleaner smart contracts, better protocol economics. But a growing number of projects are now stepping away from the base layer and into something far more familiar to everyday users: payments, cards and neobank-like services.

The shift reflects a broader realization inside crypto: while protocols matter, adoption tends to follows utility. Projects are now starting to pitch something else: that users can spend, save and borrow with crypto, without needing to understand how the technicalities work underneath it all.

The evolution in messaging comes as stablecoins are positioned as havingan everyday financial usecase. Research from Messari argues the next phase of crypto neobanks won’t simply mirror fintech apps on top of blockchains, but instead will attempt to rebuild core banking functions, like spending and borrowing directly onchain without relying on traditional payment rails.

Ethereum restaking platform ether.fi was among some of those crypto-native projects to make that pivot, moving beyond protocol development toward offering payment and banking-style services built on top of decentralized finance. Since then, the trend has only accelerated. Polygon, long known primarily as a scaling network for Ethereum, recently announced new acquisitions for crypto rails and payments infrastructure for stablecoin use cases.

“It’s accurate to call it a shift,” Polygon CEO Marc Boiron toldCoinDesk in an interview. “It’s just a shift we started 12 months ago and have actually been building toward, not just talking about.”

At the heart of the transition is a desire to simplify crypto’s famously fragmented user experience. Today, businesses that want to accept crypto payments or integrate blockchain tools often need to stitch together multiple providers, such as wallets, on-ramps, custody services and protocol integrations, each with its own technical and regulatory hurdles.

“When we talk to banks, fintechs and merchants, one of their biggest frustrations is having to deal with a blockchain company, a wallet company, an on-ramp company — it’s confusing,” Boiron said. “They just want one API they can plug into. That’s a very big differentiator for us.”

Ether.fi’s founder and CEO Mike Silagadze sees this convergence as a natural evolution for the industry. “That seems to be like a rapidly growing trend, just lots and lots of companies going into [the] space and seeing growth there, which is awesome,” Silagadze told CoinDesk.

His bet is that adoption won’t come from users directly interacting with protocols, but from crypto-native financial products that behave like banks, without giving up the core principles that attracted users to DeFi in the first place.

“I really believe that the adoption is going to come from a lot of these crypto neobank-type players,” Silagadze said.

The appeal, he argues, is in the combination of features that traditional fintech can’t easily replicate. Users retain self-custody of their assets, while still being able to spend or borrow against them. “You get DeFi composability, so you get to actually use your DeFi assets to borrow or to spend,” Silagadze said. “You get self-custody, so you actually control your assets.”

For now, Silagadze believes that the access to DeFi composability could unlock a new wave of user-activity. “I just think that's going to lead to such a large amount of user-activity that in the end, that's just going to lead to a lot of adoption.”

Still, the rush toward crypto-powered payments raises an obvious question: will the market be at risk of becoming saturated before it even proves itself?

Messari’s report notes that the payments race is already showing signs of crowding. Many crypto neobank products today rely on prepaid debit cards that automatically convert assets to fiat and settle on traditional card networks, a model the firm describes as oversaturated and only marginally different from existing fintech offerings.

“Crypto cards are both oversaturated and also incredibly nascent. Today, most crypto cards are identical: you can launch a U.S. virtual account in 150+ countries pretty easily with Bridge or Rain. It’s incredible, but at the same time we have dozens of identical products because the barrier to entry is so low,” said Sam Ruskin, an analyst at Messari.

However, the cost of onchain payments could be significantly less because of less intermediaries, according to Ruskin. “A major cost in finance is settlement risk; the gap between when you think you’ve been paid and when the money is actually yours to spend. But onchain stablecoins can use atomic settlement, so the trade and settlement happen simultaneously, in real time,” he added.

For now, it’s too early to know whether the current crop of crypto neobanks will carve out durable businesses or blur together in a crowded field.

Polygon’s Boiron acknowledges that competition will intensify, but sees that as a sign of success rather than a threat.

“When you get a real product-market fit, the entire market blows up,” he said. “You’ll get a lot of entrants, and the ones that execute best will survive.”

For an industry long focused oninfrastructure, the pivot toward payments suggests a new phase: one where crypto’s success is measured not by how many developers it attracts, but by how easily someone can tap a card, send money or run a business without thinking about the chain beneath it.

For now, there is still some work to be done before it is a seamless experience. “The fiat on/offramps are expensive and immature,” said Ruskin on the unresolved gaps that exist today. “Making it easier to swap from fiat to crypto will bring new users and new use cases onchain.”

Read more: Neobanks will fuel Ethereum's 2026 growth, says ether.fi CEO