A new category of financial institution is beginning to take shape as decentralized banking models, or "deobanks," position themselves between traditional banks and fintech firms.
The shift, industry leaders say, could redefine competition in global finance over the next decade.
"Banks offer trust through strong regulation, and fintechs provide digital convenience. Deobanks deliver user sovereignty without sacrificing accessibility," said Maksym Sakharov, co-founder and Group CEO of WeFi, the first deobank of its kind, in an interview with Benzinga.
"This forces existing players to rethink their value proposition from the ground up,” Sakharov, who pioneered the concept of a Deobank, acquiring a Guiness World Record in the process, said.
The premise behind deobanks is that users should retain ownership of their assets while accessing services as seamlessly as with traditional institutions.
Sakharov argued that this is particularly relevant in emerging markets, where infrastructure gaps and high fees make alternatives more appealing.
Adoption hurdles remain.
Many potential users still associate decentralized finance with technical complexity, despite improvements in interfaces and onboarding.
Trust is another challenge, with public perception often shaped by high-profile failures in the crypto sector.
WeFi and other players are betting that integrating familiar features, such as card payments, Apple Pay, or mobile-first onboarding, will help bridge the gap.
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Regulatory clarity is beginning to create momentum. The GENIUS Act of 2025 and stablecoin rules in other jurisdictions are providing defined compliance pathways.
Sakharov suggested that central bank digital currencies (CBDCs) will normalize digital money, while simultaneously fueling demand for alternatives that preserve financial autonomy.
"CBDCs still carry the same restrictions as traditional fiat—they can be frozen, monitored, or manipulated for policy purposes," he said. "That limitation is likely to drive demand for alternatives."
Security remains another barrier to mainstream adoption.
Hacks and smart contract failures continue to plague decentralized finance, and Sakharov noted that single audits create "false confidence."
He pointed to multi-layered approaches such as formal verification, insurance protections, bug bounties, and time-locked transactions as necessary steps to protect users.
He added that robust insurance and recovery protocols are still underdeveloped, even as transparency in blockchain transactions offers detection tools traditional banking never had.
Beyond current challenges, proponents of deobanking see a transformative horizon.
Real-world asset tokenization, programmable money, and cross-chain interoperability are expected to drive the next phase of decentralized financial services.
The ability to divide a salary into savings, investments, and expenses automatically or to access asset classes previously restricted to institutional investors represents the type of utility Sakharov believes will make deobanks competitive at scale.
For the 1.4 billion adults worldwide who remain unbanked, advocates argue that mobile-first deobanks could provide access faster than traditional banking infrastructure.
Remittances, in particular, are cited as a natural entry point: cheaper, faster, and already widely adopted in countries such as Argentina and Brazil, where stablecoin penetration has surged.
The emergence of deobanks, then, represents more than just another fintech experiment.
With regulatory frameworks hardening, security practices evolving, and user demand shifting toward autonomy, the financial sector may be witnessing the formation of a third pillar, one that traditional banks and fintechs will be forced to reckon with.
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