Traditional banks have long been central to financial systems, yet many individuals remain excluded from their services. According to a World Economic Forum report from last year, nearly 1.4 billion adults worldwide lacked access to traditional banking.
Several factors contribute to this exclusion, including the inefficiency and centralization of the traditional banking system. One of the main problems has been closing branches in underserved areas. In the UK, the number of Bank branches dropped from 21,643 in 1986 to 6,870 in 2024, according to data from the British Banking Association.
Moreover, a portion of the unbanked population does not meet the stringent criteria from centralized firms for holding bank accounts. Individuals with minimal disposable income often find themselves excluded from traditional banking, per an International Monetary Fund report in July 2024.
The Shift from Neobanks to Deobanks
Neobanks, or digital-only banks, emerged to solve this growing problem, but they also had ties to legacy systems with similar limitations. For instance, a 2024 study analyzing 65 European neobanks found they underperformed financially compared to traditional banks while exhibiting similar risk levels.
Notably, neobanks helped the banking sector by eliminating the need for physical branches. They brought digital convenience and streamlined financial services, but their reliance on traditional banking infrastructure created limitations. Account freezes, regulatory constraints, and high transaction fees have been common challenges. Moreover, neobanks still exclude a significant portion of the population, particularly those who lack traditional banking qualifications.
Decentralized finance protocol WeFi is looking to address these issues by introducing a new banking paradigm: a deobank (Decentralized Onchain Bank). It’s the first case of Deobanking, and is backed by Tether co-founder and ex-CEO Reeve Collins, along with other co-founders Maksym Sakharov and Roman Rossov.
Built on DeFi principles, deobanks give users full control over their funds while cutting off intermediaries and reducing transaction costs. Unlike neobanks, deobanks operate entirely on blockchain technology and ensure financial transparency, security, and decentralization. This approach removes the dependency on legacy financial systems and helps users manage their assets without the risk of arbitrary restrictions.
What Makes Deobanks Unique?
Specifically, deobanks are looking to redefine banking by taking advantage of blockchain-based solutions that bolster accessibility, security, and financial freedom. WeFi has pioneered this move with its platform that merges DeFi with real-world usability.
WeFi’s deobank presents multiple features that could enhance user control and streamline financial interactions.
Traditional banks and neobanks have the authority to freeze accounts without explanation. According to a UK government survey in March 2024, 6% of UK charities were blocked out of their accounts by traditional banks.
The new generation of decentralized banks allows self-custody. In simple terms, users would have full control over their funds, and this ensures that their money remains accessible without the risk of arbitrary account freezes while having access to all the banking perks.
Deobanks prioritize digital-first payments. WeFi’s digital bank, for example, supports Apple Pay and Google Pay, minimizing the need for physical cards, which could also help in reducing plastic waste.
The project also takes advantage of artificial intelligence agents to enhance financial infrastructure, as it makes an extra effort to optimize user experiences and operational efficiency.
The deobank model from WeFi embraces regulatory flexibility, taking advantage of AI-powered know-your-customer procedures to simplify onboarding for individuals who lack conventional documentation. In addition, WeFi’s AI agents assist users in making better financial decisions — the platform also allows users to simply manage their accounts via a Telegram bot.
WeFi’s deobank is integrated into the broader DeFi ecosystem. This allows users to earn yields through staking, liquidity pools, and other decentralized platforms. Token holders gain perks like reduced fees and higher spending limits based on the protocol they interact with. With WeFi’s ecosystem, individuals can get competitive, sustainable yields without relying on traditional banking structures.
In November 2024, the FTC took legal action against U.S. neobank Dave for several breaches, including charging undisclosed fees. WeFi, however, uses blockchain technology, which removes reliance on outdated banking infrastructure — this reduces the delays and costs while transaction efficiency increases.
Traditional banks famously operate as black boxes as they reveal little to no information about how they manage customer funds. The International Consortium of Investigative Journalists found last August that the U.S. banking sector lagged behind other developed nations when it came to financial transparency. Unlike traditional banks, the transparent and immutable blockchain technology utilized by WeFi operates without any middlemen, ensuring full operational clarity without compromising user privacy.
Another major component of WeFi’s deobank ecosystem is its native token, WFI. Token holders can benefit from reduced transaction fees, higher spending limits, and access to exclusive financial tools. Unlike traditional banking models where customers have no authority in bank operations, WFI holders can influence the platform’s decisions and share in its success.
The Inevitable Future
Neobanks have digitized banking — and now, deobanks are decentralizing it. No longer do banks decide who gets access to financial services. With WeFi leading the deobank revolution, the future of banking is open, transparent, and truly global.
With the use of blockchain, deobanks remove intermediaries, reduce costs, and ensure users enjoy financial autonomy. As the traditional banking system struggles with inefficiencies and exclusion, deobanks present an alternative that prioritizes security and accessibility.
In the future, WeFi will integrate with LayerZero to enable smooth cross-chain transactions, making it easier for users to transfer assets across multiple blockchain networks and access a wider range of DeFi opportunities. The platform also plans to bridge DeFi with real-world finance through services including yield optimization with flexible and locked savings options; virtual cards supporting payments via Visa, Google Pay, and Apple Pay; instant loans and real-time FX conversion to provide liquidity without requiring users to sell their assets; and WeFi ATMs, which will enable fiat withdrawals and cash-to-stablecoin conversions via QR code, making it easier to transition between digital and traditional finance. By combining these solutions, WeFi is set to redefine financial accessibility and usability in both the crypto and traditional finance worlds.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
