From what it is understood, banking modules are expected to move beyond digital to neobanks through decentralised and online-based transactions without any kind of physical intervention. Without the need for value chains, complex administrative structures and regulatory requirements, neobanking might make banking much easy to use. The global neobanking market was valued at $66.82 billion in 2022 and is expected to clock at a compound annual growth rate (CAGR) of 54.8% from 2023 to 2030, as per insights from Grand View Research, a research platform.
In a conversation with FE Blockchain, Rahul Tandon, chief product officer, Safexpay, a global payments and banking solutions platform, talks about how the addition of cryptocurrencies in neobanking can impact the cryptocurrency market. (Edited Excerpts)
What can we expect from the addition of cryptocurrencies in neobanking?
I think the only thing neobanks lack is the addition of crypto-based exchanges. If we move over this people can trade cryptocurrencies without the need for any form of third-party intervention, globally. As neobank are low-cost models they can execute cryptocurrency exchanges in a cost-friendly manner, without the need for exchange-based fees. Furthermore, it can also provide the creation of multiple accounts on a single platform, thus enabling users to invest and trade in different forms of digital tokens under a single platform.
Can the involvement of digital tokens in neobank create an impact on the cryptocurrency market?
Using neobank and dealing with cryptocurrencies is something that needs to be trusted first, as they are very new and different from traditional financial modules. I think other countries are more adaptive. For example, this January the N26, a German-based Neobank, announced that it was expanding trading platform for cryptocurrency to various European countries. Around the same time, The Union Bank of the Philippines partnered with METACO, a Swiss cryptocurrency firm, to allow trading cryptocurrency via Bitcoin and Ethereum. But India still lacks proper regulations and education around trading of cryptocurrency and other digital assets, which contributes to the present uneven status of the cryptocurrency market.
What future does cryptocurrency in neobanking hold?
The cryptocurrency banking market is expected to reach $2.52 billion by 2029, as per insights from Data Bridge Market Research, a market research platform. I think if India starts to adopt the developments that are expected to happen around cryptocurrencies the uneven status of the cryptocurrency market can be solved. But as cryptocurrency is volatile and depends more on human interest, nothing much can be predicted about this collaboration. I think it’s more of a symbiotic relationship between neobanking and cryptocurrency.
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