How Neobanks Are Bridging Traditional Finance and Digital Assets

The Rise of Neobanks in a Digital-First Economy

In an industry long dominated by established institutions with deep-rooted legacy systems, the emergence of neobanks represents one of the most significant financial revolutions of the past decade. These digital-native banks have not only overcome substantial regulatory hurdles but are now outpacing traditional players in critical metrics like app downloads and user adoption. What began as a disruptive force in consumer banking is now transforming how businesses manage both traditional and digital assets through unified platforms.

Pave Bank: A Case Study in Strategic Timing and Vision

Salim Dhanani, co-founder and CEO of Singapore-based Pave Bank, attributes much of his institution’s early success to fortunate timing. “The world was just getting much more comfortable with digital products, and the advent of generative artificial intelligence has helped us to build and scale the bank,” he explains. This strategic positioning has enabled Pave Bank to secure a $39 million Series A funding round while establishing itself as a bridge between conventional banking and the emerging digital asset ecosystem., according to market trends

What distinguishes Pave from many competitors is its deliberate focus on serving organizations that operate across both traditional and digital financial realms. The bank offers commercial banking services across more than 25 fiat currencies and stablecoins, creating a comprehensive solution for businesses navigating this hybrid financial landscape., according to technology insights

The Expanding Digital Asset Infrastructure

With its banking license from Georgia—an increasingly prominent European fintech hub—Pave Bank has established a representative office in London while expanding across Europe, the Middle East, and Asia. This geographical diversification mirrors the growing mainstream acceptance of digital assets within financial services., according to recent research

“Digital assets have become much more mainstream, with a growing proportion of the financial services industry moving on-chain,” Dhanani observes. This shift has translated into tangible business results for Pave, which has attracted approximately 400 corporate and institutional clients who have conducted over $5 billion in transactions through its platform, achieving an eight-fold revenue increase this year alone.

Diverse Applications Across Industries

The bank’s client base reveals the broadening applications of digital asset banking solutions. While some customers are native to digital markets—such as cryptocurrency exchanges requiring seamless fiat-to-crypto conversion services—others represent traditional industries finding innovative uses for blockchain-based financial tools.

One shipping company now uses Pave to accept stablecoin payments from shippers worldwide, demonstrating how even legacy industries are incorporating digital assets into their financial operations. This pattern suggests that the convergence between traditional and digital finance is occurring across the economic spectrum, not just within fintech circles., as detailed analysis

The Competitive Landscape and Market Potential

Pave Bank operates in an increasingly competitive environment where both neobanks and established financial institutions recognize the potential of digital assets. Revolut has expanded its corporate banking division to include stablecoins, while JP Morgan’s launch of Kinexys signals traditional banking’s serious entry into the digital asset space.

Despite this competition, Dhanani believes Pave’s focused approach and early profitability—achieving profitability in seven of the past nine months—positions the bank for sustained growth. “Our next challenge is to broaden our footprint and to deepen our product range,” he states, with the recent Series A funding providing crucial resources for this expansion.

Investor Perspective: Bridging Financial Eras

The funding round, led by venture capital firm Accel with participation from Tether Investments, Quona Capital, and Wintermute, reflects investor confidence in the convergence of traditional and digital finance.

Rachit Parekh, partner at Accel, sees Pave as uniquely positioned at this intersection. “As digital assets become an integral part of the global financial ecosystem, there is a strong need for a well-regulated, full-reserve approach to banking at the intersection of fiat and digital assets,” Parekh explains. “Pave is at the forefront of this fundamental shift in how financial infrastructure operates.”

This sentiment is echoed by Quona Capital’s Ganesh Rengaswamy, who believes Pave “has the potential to catalyze widespread adoption of stablecoins, deepening financial inclusion across markets.”

The Future of Hybrid Banking

Recent analysis from McKinsey research indicates substantial growth potential, with approximately $30 billion in daily stablecoin transactions worldwide—a figure that has doubled over the past year yet represents just 1% of global money flows. This suggests significant runway for expansion as digital assets continue penetrating mainstream finance.

As regulatory frameworks evolve and institutional adoption accelerates, neobanks like Pave are demonstrating that the future of banking may not be a choice between traditional and digital, but rather a sophisticated integration of both. Their success hinges on creating robust, regulated platforms that serve diverse financial needs while navigating the complex transition from legacy systems to blockchain-based infrastructure.

References

• https://pavebank.com/en
• https://www.mckinsey.com/industries/financial-services/our-insights/the-stabl…

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