🧠 When everyone can build a bank. Who runs it?

Whop says you can now “launch your own neobank in one click.” I find that both exciting and a little terrifying. Whop is a creator of “template businesses” for entrepreneurs to build online stores and run gyms. So why not add a Neobank built on stablecoin rails?

And yes, building a little Brainfood neobank where I get to really nerd out on features is tempting, but 20 years in this industry have taught me that whenever I hear “build a bank faster and cheaper,” you’re heartbeats away from a trainwreck. I’m not saying that will happen here. I’m just saying, I’m old, and pattern recognition is hard to shake.

There's a monumental opportunity here to build a global, 24/7 financial service that is better, faster, and cheaper for customers built on stablecoins. The next Chime, Revolut, or Nubank could well be built on stablecoins.

But the path to success is usually paved by companies that get compliance and growth right, holding those two ideas in tension.

That's why the companies underneath these new apps interest me. Some are applying to become federally supervised institutions themselves, taking on more responsibility for holding and moving customers' money. Community bankers are challenging whether the regulator has the power to let them.

I want that door to be open. But if we're going to argue that this wave can be better than the last one, we need to explain what changes when something goes wrong.

This week's Rant:

The banking-as-a-service (BaaS) boom promised that somebody else had taken care of the bank bit.

You built an app. An intermediary connected it to banks. Consumers saw an account, a balance and reassuring language about deposit insurance. Behind the scenes, somebody had to maintain the records connecting each customer to their money.

So you had three layers

(Keep those three roles in mind, we’ll come back to them later).

Synapse maintained a record, or ledger, on behalf of the Neobanks. The banks held the money in “omnibus” accounts, pooling funds from many customers. The ledger was supposed to identify each customer's share.

With Synapse, those records became the disaster.

Synapse filed for bankruptcy in April 2024. In its 2025 enforcement case, the CFPB described a $60m to $90m gap between the funds partner banks held and the customer balances in Synapse's records. Consumers lost access to money, and many still hadn't received their full balance when the agency published its account in September 2025.

Their app said there was money. The institutions underneath couldn't agree on how much belonged where. Synapse said the banks messed up, the banks said Synapse did. The brands and customers just wanted the situation resolved. This is the kind of arrangement I illustrated back in March 2023:

Remember, FDIC insurance covers an insured bank failing. It doesn't cover every possible way a financial app can stop returning your savings. In this case, the company between the app and the banks had failed. Having insured banks somewhere underneath the product didn't resolve the missing records or return the missing money.

Ledgering is something you can't get wrong. The banks and everyone involved in the chain are responsible for getting that record right, even if the company goes bankrupt. People's ability to pay rent is at the other end of this chain of suppliers. They shouldn't have to wait for a bankruptcy court to work out what their balance means.

So the lesson from Synapse isn't simply that launching a fintech quickly is dangerous. It's that making the product easy to buy did not make the arrangement underneath it easy to operate, or to untangle when it broke.

Can stablecoins improve that arrangement?

Indulge me in the Brainfood neobank idea for a minute.

I have an audience. Some of you run businesses, some invoice clients overseas, and a worrying number of you would probably sign up just to see what I'd put in the app.

I'd want dollar balances, cheap international payments, a card, and a way to get paid without the money spending a long weekend considering its options. Maybe a business account for customers in five countries, without having to explain the business to five different banks.

Sort of like if Wise and Ramp had a baby that ran entirely on stablecoins.

An issuer supplies a dollar stablecoin, a token intended to be worth one dollar. A wallet lets the customer hold and use it. Payments providers connect it to bank accounts and cards. I assemble the experience around the customer, without building every ingredient myself.

That sounds a lot like BaaS. Except on stablecoins.

There are three changes underneath it.

First, the record of a transfer can be shared. If I send you a stablecoin on the same blockchain, we can both inspect the same transaction and the resulting wallet balances. We don't need my bank and your bank to exchange messages before either can see that token move.

Second, you can take your wallet out of Whop. Whop's wallet terms let customers export their private key, the credential that controls their tokens, and use it in another wallet. Once they've done that, access need not depend on Whop's app continuing to work. It doesn't remove their dependence on the token issuer when they want dollars back.

Third, the payments company can take responsibility for more of the work. Instead of selling software that sits between a brand and a bank, it can operate the payment service and, with the right permission, hold customer assets itself.

That just leaves a few messy questions

But this list of new third parties could recreate the maze.

This is where national trust charters come in.

They let an institution perform specified trust and custody activities under the Office of the Comptroller of the Currency, or OCC, the federal regulator that supervises national banks. Custody means holding assets for customers. The permissions depend on the application; these are not all-purpose licenses to do everything a bank does. (See Not all Charters are Created Equal.)

PSPs and non banks are now taking the trust charter route to simplify the customer experience and potentially reduce the overall multiple supplier risk.

Modern Treasury* starts with the ledger. It built software to track payments across banks, then bought stablecoin company Beam and launched a payment service provider to move the money too.

Now it has applied for a national trust bank to hold digital assets and provide related fiat services alongside its payments business. If approved and authorized to open, it would add custody, not stablecoin issuance or lending.

Rain starts with card payments. It connects stablecoin balances to card spending and is a principal member of Visa and Mastercard. Its proposed trust bank would add custody, management of stablecoin reserves, and the ability to issue and redeem the coins.

Stripe* is assembling the stack. It acquired Bridge and announced the Privy wallet deal, bringing stablecoin services and wallets into the same group. Bridge has conditional approval for a trust bank; it still has to meet the conditions to open.

That can be commercially attractive.

Companies can earn fees on work they previously passed to a partner and have more control over how a payment moves through their product. In return, they have to pay for the people, capital and controls needed to do that work properly.

I like the direction: thoughtful payments nerds taking on more responsibility for problems they understand deeply.

Imagine our Brainfood app displays this:

Beautiful. Three buttons. Very little financial dread.

Now press Earn.

This is quietly becoming the killer app for anyone with wallets and customer balances in stablecoins. Would your customers like to earn 5%? Yes. Would you like some of the spread between that and the underlying 7%? Yes. (My colleagues at Tempo put together a great primer on earn here).

Up to this point, we've been talking about holding money and making payments. Earning a return introduces another question: where does the yield come from?

Whop's optional earn product gives us a concrete example. Veda describes how it works: dollars are converted into USDT0, a version of Tether's dollar token, then placed in a vault on the Plasma blockchain. The vault is software that puts the tokens into Aave, a lending market where borrowers pay interest to use them. Part of that return flows back to the customer.

Whop separates spendable balances from funds allocated to Treasury and discloses the risks.

Which is again, quite good. But there are still risks.

“It's onchain” doesn't answer those questions. Nor does a charter somewhere in the chain turn a lending product into an insured savings account.

I'm not predicting a failure at Whop. I am saying that the product has to explain what changes when the customer presses that button. The change in risk deserves at least as much attention as the advertised return.

Which brings us to who is responsible for doing that work.

“But Simon, Synapse had regulated banks.”

Yes. And customers still ended up between companies disputing the records. Banks already had obligations to oversee their suppliers. The existence of a regulated bank somewhere in the arrangement wasn't enough.

A single throat to choke is useful. The company holding the customer’s assets becomes directly answerable to the OCC for that work. It still has to build reliable systems. But the regulator has an institution to examine and hold accountable when it falls short.

That still leaves limits. A custody bank is responsible for its custody service. It doesn't become responsible for every promise made by every app using it. And when anyone can make an app. Could anyone promise, any, thing?

Most of the new charters aren’t live yet.

But there is one case study that’s instructive.

Anchorage received its charter in 2021. The following year, the OCC found that its anti-money-laundering compliance program did not meet the requirements attached to that charter and issued an enforceable order requiring improvements. The regulator terminated that order in 2025, saying it was no longer needed for the bank's safety, soundness and compliance.

There are two lessons there.

A charter is for life not just for christmas. It is not a hall pass.

The door is open if you get your act together, and somebody keeps checking after you walk through it. And the cop on the beat may not be as open minded as the current administration.

I think bringing these companies under direct supervision is progress. The community bankers are challenging whether the OCC has the authority to do it.

The Independent Community Bankers of America, or ICBA, sued the OCC on October 2. For this essay, three objections matter most:

Those are three different arguments. Better software doesn't answer any of them on its own.

On the legal question, the OCC reads the law differently. It says trust-company operations can include safekeeping assets without taking on the wider duties of a trustee. The dispute is over which activities Congress allowed these institutions to perform. Thinking the new businesses would be useful doesn't settle that question. Ultimately due process will.

On customer protection, I think there’s a real risk some cowboys overplay their hand here. I know the larger stablecoin-linked cards and providers take this seriously. But often it only takes one bad apple to ruin the bunch. Stablecoin-linked cards have risks. And things could go wrong, especially when anyone can be a brand.

On failure, the response needs to be more than “we hold reserves.” Who can return the assets? Who can access the records? What pays for the staff keeping things running while the institution closes?

Of course the community banks would say this.

Customer deposits help fund their lending. If a customer moves a balance to a stablecoin product, the original bank can lose both funding and a relationship. “Don't worry, you can still lend!” is an impressively annoying thing to say to a lender whose cheap funding is leaving.

That commercial interest doesn't make ICBA's legal and safety arguments wrong. Equally, protecting an incumbent's funding is not, by itself, a reason to stop a better payments business from existing.

Finance is an F1 car not a drag race.

The goal is not to go quickly in a straight line. It’s to handle the curves and braking really well too.

Whop promises one-click launches.

Modern Treasury*, Rain and Stripe* promises faster launches too, but they’re applying for charters and trying to put the right guardrails in place.

By the same, ahem, token. Slowness is not proof of virtue. Anyone who has waited six weeks for a bank to lose the same PDF twice knows that.

I still want the ridiculous little Brainfood neobank.

I want the features and the global reach and the ability to build something oddly specific that a bank would never put on its roadmap.

I also want the person underneath it who will ruin my afternoon by explaining why a feature isn't ready, because the money doesn't reconcile or the recovery process hasn't been tested.

That person is part of the product.

If the company doing that work wants to become a federally supervised institution so it can take on more responsibility itself, my first instinct is: good.

Show me you can do it.

ST.

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* Modern Treasury is a Brainfood sponsor. Stripe is a podcast sponsor.

(1) All content and views expressed here are the authors' personal opinions and do not reflect the views of any of their employers or employees.

(2) All companies or assets mentioned by the author in which the author has a personal and/or financial interest are denoted with a *. None of the above constitutes investment advice, and you should seek independent advice before making any investment decisions.

(3) Any companies mentioned are top of mind and used for illustrative purposes only.

(4) A team of researchers has not rigorously fact-checked this. Please don't take it as gospel.

(5) Citations may be missing, and I’ve done my best to cite, but I will always aim to update and correct the live version where possible. If I cited you and got the referencing wrong, please reach out