Onchain banking: The next-gen Revolut

Introduction

The recent Fabric Ventures Summit explored onchain banking and its potential to revolutionize financial services, paralleling fintech disruptors like Revolut and Wise. Moderated by Anil Hansjee, General Partner at Fabric Ventures, the panel featured industry experts Robert Sargsian, Co-Founder and CEO of Due Network, Axel Cateland, Founder and CEO of Kulipa, Saumitra Dubey, Head of Product at Fiat Republic, and Marcos Nunes, Founder and CEO of ValoX.Hansjee opened by highlighting the transformative potential, stating, "My eyes went open around the possibilities of just being your own bank and sort of being in control of your own financials."

Why onchain banking?

Traditional banking relies heavily on legacy infrastructure, restricting scalability and inflating consumer costs. Nunes emphasized the inefficiency of layering costs onto consumers, advocating for blockchain to minimize costs and eliminate geographical boundaries. Nunes argued, "There is no way to reset. Let's just throw all the systems in the trash," highlighting blockchain's potential to "lose this boundary of the country problem."However, the panel acknowledged existing limitations, including regulatory complexities and the need for effective bridges between old and new financial systems.

Real-world adoption and integration

Cateland described real-world adoption scenarios, noting that traditional fintech companies are now leveraging blockchain and stablecoins. He illustrated practical applications, stating that fintechs now "just use the blockchain and stablecoin as the backbone of their use case," mentioning examples like spend management solutions expanding into new geographies via blockchain.Still, Cateland noted user experience challenges and emphasized the necessity of bridging onchain solutions with established fiat systems.

Bridging traditional and onchain worlds

Dubey stressed compliance’s critical role: "A bridge between the old world and the new one is essential." Dubey described Fiat Republic’s bridging approach: "We provide banking rails and compliance information on behalf of our clients… acting almost like a translator."Yet, Dubey acknowledged the complexity and costs associated with maintaining regulatory compliance across jurisdictions.

Technological foundations and emerging innovations

Sargsian detailed the technology stack underpinning onchain banking, emphasizing open-source blockchains and advanced AML solutions. Sargsian noted, "The ledger is open-source…today we can use Ethereum, Darknet, Nir as the source of truth."However, Sargsian highlighted ongoing challenges, particularly around identity verification, privacy, and uncollateralized credit risks, noting, "Identity is somewhat there…but the privacy piece…haven't seen anybody solve yet."

Liquidity management: Lessons and risks

Dubey discussed Fiat Republic’s EagleNet liquidity management, inspired by Silvergate’s SEN, explaining that participants are incentivized to retain liquidity internally. "More liquidity on our platform essentially means more of our members' use cases can be met," Dubey explained.However, Hansjee and Dubey cautioned about operational and systemic risks, referencing historical liquidity challenges faced by similar models.

Credit onchain: Opportunities and limitations

The panel recognized blockchain’s strength in collateralized lending. Cateland mentioned, "We are working on credit cards backed by lending protocols." However, Sargsian noted unresolved issues in uncollateralized lending: "You need regulatory frameworks…you need governments to ensure institutions can collect payments."Nunes pointed out successful models like Nubank’s small-ticket lending and the potential for stablecoins to facilitate cross-border credit leveraging international partnerships.

Conclusion: Navigating practical realities

The panel emphasized that onchain banking fundamentally reshapes financial services rather than replicating them. Hansjee concluded, "The future looks interesting," reinforcing the importance of practical implementation and addressing complexities.The future envisioned by Due Network, Kulipa, Fiat Republic, and ValoX holds promise, but success hinges on addressing real-world complexities and fostering effective integration between traditional finance and blockchain innovation.Watch more great talks from Fabric Summit 2025, covering topics like self-sovereign AI agents, decentralized infrastructure, and the future of AI.