Can crypto fully realize the open banking fintech vision?

“OpenFi” aims to unbundle to take the “account” out of bank account

article-image

WindAwake/Shutterstock and Adobe modified by Blockworks

share

In the early 2010s, banking customers dissatisfied with the fees, complexity and poor service of traditional banks gained some new options.

Neobanks, also called digital or challenger banks, emerged as fintech startups aimed at providing banking services primarily through mobile apps and web platforms, without the need for physical branches.

Fintechs like Simple in the US, N26 in Germany, and Monzo and Revolut in the UK focused on providing an intuitive user experience, often incorporating features such as real-time spending notifications, budgeting tools and easy money transfers.

Yet like their brick and mortar counterparts, there remains an account at the center of a closed loop of services.

Read more from our opinion section: Fintech has hit a wall. Blockchain will break through it.

A new crypto consortium is pitching “Open Finance,” or OpenFi, as an alternative to both neobanks and strictly crypto DeFi.

The key concept lies in starting from a user-controlled account. Rather than having banks as the KYC-enforcing gatekeeper, banking services can be plugged in — and swapped out — like the “money Lego” metaphor we’re so accustomed to in Web3.

In short, OpenFi is a framework for integrating noncustodial blockchain solutions into the traditional financial system.

Source: Safe

The vision of OpenFi

Pitched on the sidelines of EthCC in Brussels, the group envisions a future where banking accounts are replaced by smart wallets, enabling users to manage their finances independent of any one centralized entity.

Instead, like an a la carte menu, specialized providers take on the job of banking services, an approach that removes single points of failure and puts users in control.

A key component of the OpenFi strategy is the development of infrastructure to support apps. As Jasper De Maere, research lead at Outlier Ventures noted, “apps inspire infrastructure [and] infrastructure enables new apps.” In short, it’s time fintechs migrate to a new tech stack, he said.

Unlike embedded wallets offered by centralized players — sometimes referred to as CeDeFi, OpenFi advocates call for the use of smart wallets — Safe and Zeal, which is built on Safe, are two of the group’s initial members.

Smart accounts provide direct access to DeFi applications, allowing users to determine their security setup, while outsourcing payment and banking rails to providers such as Monerium and Gnosis Pay.

Read more: Gnosis uRamp joins suite of on-chain banking products

For OpenFi to realize its full potential, there needs to be a concerted effort to develop more user-friendly applications that can rival those offered by traditional fintech companies, but also further progress on identity and security solutions.

On the identity front, Julian Leitloff of idOS pointed to the need to streamline onboarding and avoid redundant KYC processes. Today, most users need to repeatedly verify their identity when accessing different financial services. OpenFi, which Leitloff called “the killer use case for crypto,” proposes a unified identity solution that simplifies this process.

The idOS system uses an Arbitrum Orbit chain but is chain-agnostic, and provides user-encrypted data to dapps via an SDK.

Institutions still needed

Despite the promise of OpenFi, traditional financial institutions will continue to play a crucial role, according to Julian Grigo from Safe. Merchants and service providers are not yet ready to accept direct crypto payments, which is why hybrid solutions like Stripe, Gnosis Pay and Kulipa are needed to bridge this gap while maintaining regulatory compliance.

But by unbundling accounts from banking services, the OpenFi group hopes to fulfill the promise of an open, user-centric financial ecosystem, with greater choice and more options for generating yield onchain — something the neobanks have failed to deliver.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Fluid's hybrid money market & DEX protocol has grown rapidly since launch in December of 2024.

article-image

Should higher-fidelity graphics be the goal for crypto games — which result in much higher costs and risk?

article-image

From Mel B to Neil deGrasse Tyson, BTC has seen its share of strange celebrity sightings

article-image

Circle’s roadshow will be the real test for the stablecoin issuer

article-image

PitchBook’s Robert Le said crypto projects focused on institutional use cases are the focus

article-image

The decentralized AI firm designed ODS to be owned by the community in an effort to promote more decentralized AI

article-image

The non-profit’s launch and big-name hires aim to grow Solana’s footprint in Washington