By Nicholas Larsen, International Banker
For centuries, centralisation was a core pillar of global banking, with intermediaries playing crucial roles in facilitating payments, providing liquidity between savers and borrowers, and guaranteeing transaction settlements. Even as technology, from automated teller machines to mobile applications, has thoroughly disrupted the modern lender’s core business model, centralised entities have remained fundamental to how today’s banking system functions—until now, that is. With the emergence of deobanks, the middleman could eventually become a thing of the past.
A deobank is a blockchain-based financial platform that enables users to store value, transfer money, earn yields and/or access credit without a traditional bank acting as an intermediary.
Short for “decentralised on-chain bank”, a deobank is a blockchain-based financial platform that enables users to store value, transfer money, earn yields and/or access credit without a traditional bank acting as an intermediary. Unlike a conventional bank, moreover, a deobank does not hold customer funds on a centralised balance sheet; rather, transactions and balances are recorded on a public blockchain, while users typically interact with each other through digital wallets that are under their direct control.
“Regular banks are like storage facilities: You give your money to someone else to keep [it] safe. Deobanks, on the other hand, are more like a network of personal safes,” explained Maksym Sakharov, the chief executive officer (CEO) and co-founder of WeFi, a leading entity in the deobank space. “You can still easily send money to others, but you keep the only key to your safe and never lose control of your money, even when using banking services like savings accounts, loans, and payments.”
The deobanking model differs not only from that of traditional banks but also from that of neobanks—digital-only banks such as Revolut or Chime—that still operate within the existing banking system and rely on licensed institutions behind the scenes. Deobanks endeavour to go a step further by removing the institution itself from the centre of the relationship. And thanks to recent advances in blockchain, it would seem the technology is now ready to support the sheer volume of financial-transaction activity at a scale that closely resembles that of “real” banking.
Indeed, while blockchain’s early days witnessed the launch of applications that were slow, expensive and laborious to use, significant progress has been made in improving speed, reliability and security, such that blockchain-based platforms can allow decentralised finance (DeFi) to achieve a more practical, expedited phase of development. Blockchain also enables deobanks to use stablecoins to streamline financial services.
Deobanks are thus no longer viewed purely as conceptual ideas but increasingly as systems with growing real-world relevance. “We’ll be seeing, I think, a growth in more and more cases of people, institutions, and all kinds of users around the world actually using this as their primary bank account,” Ethereum co-founder Vitalik Buterin said in November 2025, noting that DeFi had reached a turning point, one at which on-chain savings are not only viable but beginning to rival traditional banks. “DeFi as a form of savings is finally viable.”
Public confidence in traditional lenders has also been shaken over the last 15 years across many parts of the world, with the likes of full-scale banking crises, capital controls, frozen and debanked accounts, and sudden restrictions on withdrawals eroding the credibility of the global banking system. While such events often remain localised, they have contributed to a broader realisation that access to money is not always guaranteed, even in advanced economies.
Deobanks appeal to users because they reduce reliance on the centralised banking entities responsible for such turbulence. With funds held in self-custodied wallets, they cannot be frozen by a bank, accounts cannot be blocked due to policy changes, and banking services cannot be delayed by operating hours. Of course, this does not mean deobanks are entirely risk-free—far from it—but they do offer a different risk profile, which some users increasingly find attractive.
Then there is the not-insignificant matter of financial inclusion—or, in the case of traditional banking, financial exclusion. Despite decades of progress in extending financial services worldwide, large segments of the global population remain underbanked or excluded from formal financial systems. Although the digital-banking revolution has simplified many processes, opening a traditional bank account in many regions can still require considerable documentation and physical access, and maintaining a minimum balance can prove difficult for many.
Deobanks, in contrast, are typically borderless by design; anyone with internet access and a compatible device can participate, regardless of nationality or location. Everything runs continuously, governed by code rather than employees. Supporters argue that this automation reduces costs, speeds up transactions and increases transparency.
WeFi is pioneering this new deobanking trend, with Sakharov seemingly cognisant of the ongoing shifts in technology, consumer trust and views of financial control. “The strongest early fit is people whose lives are already cross-border, freelancers and remote workers who get paid from other countries, migrant workers sending money home monthly, and entrepreneurs who deal with suppliers and customers across multiple currencies,” the WeFi CEO explained in an interview with Gulf Business in December. “For them, holding stablecoins on-chain while still paying with a card or sending fiat transfers brings real practical value. Another important group lives in economies where inflation, capital controls, or fragile banking systems make it hard to preserve value,” Sakharov also observed, noting that adoption is growing fastest in Nigeria, the Philippines and Argentina.
Described as a sovereign, self-custodial banking system, Cashaa has also launched its own deobank, which integrates non-custodial wallets with regulated payment infrastructure and Visa-powered spending, while ensuring users maintain control over their keys. And LQUID PAY is also recognised as an emerging global deobanking force, focused on leveraging decentralised on-chain solutions for digital finance.
Deobanks’ rise has not gone unnoticed by regulators, who increasingly acknowledge the potential benefits of decentralised systems, but who also largely view this emerging technology through the lens of existing DeFi regulations at this nascent stage. As such, the regulatory challenges facing deobanks are unlikely to be dissimilar to those in the DeFi space at present—namely, how they should be regulated by jurisdictions given their borderless nature, whether they fit existing legal definitions of banks at all and if the removal of human judgment through automation makes deobanks riskier. Issues surrounding consumer protection, taxation and anti-money laundering (AML) compliance are also likely to be on authorities’ agendas.
The security of deobanks represents another key concern for stakeholders. Decentralised platforms have been frequent targets of hacks and nefarious exploitation schemes, while the irreversibility of blockchain-based transactions means that errors or vulnerabilities can result in permanent losses. In deobanking, control comes with considerable user responsibility: losing one’s private keys can mean permanently losing access to funds—for many users, that’s an intimidating trade-off. And as with traditional banking, one wonders whether deobanks will ensure that deposit insurance and/or recourse mechanisms are available to customers.
Sakharov sees trust in WeFi being built through structure, transparency and behaviour, with the company operating through licensed entities in jurisdictions that seek appropriate approvals for fiat, virtual assets and payment flows. “In terms of transparency, using on-chain infrastructure means large parts of our operations are inherently auditable. Wallets, smart contracts, and flows can be reviewed by regulators or independent third parties where appropriate,” he also noted in the Gulf Business interview. “Finally, behaviour: we invest in strong compliance standards—KYC, AML, transaction monitoring, and user education. As regulations evolve, especially in markets like the UAE, serious players must build with that scrutiny in mind.”
While observers mostly agree that deobanks are not an immediate replacement for traditional banks, they do represent an alternative model that will likely coexist alongside existing systems. They may also force banks to innovate further. Even as regulators urge caution with DeFi, large financial institutions are already experimenting with blockchain-based settlement, tokenised deposits and programmable money—technologies that mirror some of the features deobanks already use.
Reports also detail how major banks are exploring the potential of on-chain settlement to reduce costs and accelerate cross-border payments, particularly in wholesale markets. A key difference, however, is that traditional institutions will be integrating such tools within regulated frameworks. Nonetheless, the institutional interest validates the core idea behind deobanks: that the financial infrastructure is irreversibly evolving.