Neobank Current Uses Crypto To Build Bridge Between The Haves And The Have Nots

Current is an Andreessen Horowitz-backed disruptor looking to fix the way people bank.

“On one hand, there’s currency debasement and its inflationary impacts," the firm's CTO, Trevor Marshall, says. "On the other hand, you have technology which is a deflationary force putting people out of work.”

In light of this, asset owners are better off and able to acquire more assets while those with little to no assets continue to fall behind. Further adding to the impacts of these forces are regulatory structures put in place following crises. People that do not make banks much money are subject to higher financial services costs, in short.

See Also: EXCLUSIVE - 'Banking Without Banks': Current CTO On Motivations And Vision At Money20/20

To tackle these issues, as Marshall explained to Benzinga in 2021, Current built a core banking engine and ledger — the integration points for a bridge between decentralized finance (DeFi) and traditional finance (TradFi). In this month's follow-up, Benzinga learned the firm was leveraging partnerships to further build trust and avoid "skipping over the fundamentals."

Consequently, in working with organizations like Visa Inc V and Zero Hash, Current is making rewards, spending, saving, and investing far more secure and convenient.

“You need to have these bridges and relationships with the likes of Zero Hash, in the interim, to make sure you’re delivering an approachable experience,” Marshall added. Current’s core banking has integrations like a trading engine, and firms like Zero Hash help it increase liquidity across the thirty or so coins offered.

Cutting Fees And Third Parties

In late 2022, Current migrated to the Visa DPS Forward digital issuer processing platform built with REST APIs for creating unique payment and credit products.

“They’ve been an amazing partner,” Marshall said. “We’re actually the first partner to launch with them in the US and the first, globally, to migrate an existing program onto that platform.”

As part of the development, Current gains access to Visa’s fraud detection and account updating tools, which were siloed for many years. There's also a shift in business models and fee removal; due to the transition, in-house processing creates cost savings passed on to customers via dropped subscription fees — good news for customers using Current to manage their finances.

“We used to charge customers $5 per month to access our features because that was the only way for us to monetize and serve them properly in the long term,” Marshall said. “By making a transition, we were able to cut our subscription fee.”

Boosting Financial Independence

Current’s long-term vision is to merge true digital asset ownership with traditional banking and remove the harsh experiences “associated with wallet storage.”

“Our platform provides us the ability to generate new financial products that have never existed before,” Marshall said in a nod to Current’s business model which removes their reliance on vendors who provide the same core banking tech and products to competing banks.

In no way should Current’s features look similar to that provided by competitors.

For example, customers can deposit cash at tens of thousands of locations including the likes of CVS Health Corp CVS stores. The money is available for immediate use since there are not that many providers and intermediaries involved in the process.

Adding, through the ledger technology and partnerships with firms like Visa, instead of having separate checking, savings, investing, and credit accounts, Current ties everything together.

As a result, when a user buys Bitcoin BTC/USD, which is commonly viewed as a hedge against monetary policies and debasement, the cash comes from the user’s debit card balance. Users have instant liquidity, too; proceeds from crypto sales can be spent immediately or moved to Current’s Savings Pods to earn nearly 4% APY.

“There are no fees, ACH transfers, and waiting. This is true product differentiation that enables users better control over their money due to it being in one place,” Marshall said.

As for what will attract and keep users in their ecosystem, Marshall cites "paid acquisition; the company's collaboration with YouTuber Jimmy Donaldson (aka MrBeast); and "organic referrals bring and educate users on who we are."

"It is this unique product that drives retention,” he says.