Crypto Exchanges Will Acquire Neobanks To Access Mainstream Finance
Like any tech industry, the crypto sector is awash with takeovers, buyouts, and M&As. When a company spots a promising startup in a strategic vertical, acquisition becomes the natural next step. Over time, the crypto market has increasingly adopted this classic playbook from traditional finance.
From Coinbase’s (COIN) acquisition of Earn.com to Binance’s purchase of CoinMarketCap, the last decade has seen hundreds of industry mergers and acquisitions. If there’s one strand that runs through these deals, it’s a large crypto company — usually an exchange — buying a smaller crypto startup.
This trend is unlikely to let up as blockchain businesses seek to fast-track their path to dominance of emerging on-chain sectors. However, it appears poised to be supplanted by a larger trend that will see crypto exchanges shift their focus outward and begin to eye opportunities within traditional finance. And at the top of their wishlist are those companies that specialize in bridging the fiat and crypto worlds: neobanks.
Crypto Is Coming for Neobanks
Operating entirely online, usually through mobile apps, neobanks don’t have physical branches. This allows them to be leaner and more innovative, without being burdened with the expense of maintaining brick-and-mortar premises. It also makes them a highly attractive target to wealthy businesses that are also accustomed to operating digitally, crypto exchanges.
It helps that many neobanks such as Revolut and Wirex are already in the business of supplying fiat-to-crypto services, forming a valuable conduit for moving funds in and out of the cryptosphere. Many crypto exchanges already offer branded …
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