MELD Neobank

MELD defines a new era with an introduction of the MELD Neobank

Stuart

Published in

MELD

5 min readSep 28, 2022

Introducing MELD Neobank! The next step in helping you be your own bank.

A Neobank is the first step for the fiat component of the MELD ecosystem and will have the ability to integrate blockchain technology and all the composability of DeFi tools and services.

MELD is positioned to be a “next generation” Neobank, providing an alternative to traditional banking services, which exclude normal people around the world and limit their access to financial services.

By leveraging both traditional & decentralized finance, the MELD ecosystem will offer a full suite of banking services including payment transfers, lending and over-collateralized borrowing, currency exchange, and insurance. Many of these services will be utilizing blockchain technology and will make use of smart contracts to automate processes. This will allow MELD to offer its services to a global audience, reducing the need for traditional banking infrastructure expenses.

Neobanks vs Banks
MELD X
MELD Neobank — Electronic Money Institution
MELD Debit Card

Neobanks vs Banks

In addition to our focus on digital banking, a Neobank has a number of advantages over traditional banks. These include:

lower costs of overhead
customer acquisition
more innovative products for customers
ability to adapt to customer needs faster
banking from your mobile vs. IRL

It is important to note that a Neobank is not without its potential disadvantages. These include:

no physical branches (i.e. no face-to-face contact with customers)
no tellers (i.e. customers must use ATMs or online banking)
no cheques (i.e. customers must use electronic payments)
no safety deposit boxes

With the goal of giving equal access to banking tools to all, the flexibility of a Neobank structure empowered through DeFi greatly outweighs the disadvantages when compared to a traditional bank.

MELD X

MELD X is a separate legal entity in the ecosystem. MELD X has one job (for now) — to exchange stable coins (MUSD, USDT, USDC) for fiat currency.

Since MELD X will be the intersection of crypto and fiat, An MLRO (Money Laundering Reporting Officer) will play a critical role in operating the service.

MELD Neobank — Electronic Money Institution

An EMI is not technically a banking license. As such, MELD will NOT operate as a bank directly. The key difference between an EMI and a Bank is that an EMI cannot do fractional reserve banking, or create/issue debt.

Meaning that MELD cannot leverage your money to create risky loans. Instead, MELD gives users complete control over their assets and enables them the tools to leverage those assets and build their lives.

Note: Fractional reserve banking is a system in which only a fraction of bank deposits are backed by actual cash on hand and available for withdrawal. This is done to theoretically expand the economy by freeing capital for lending. Today, most economies’ financial systems use fractional reserve banking.

With MELD X and the integration of an EMI, we will be providing our users with a simple and hassle-free solution to the current problem they face when dealing with digital currency — access to fiat and the ability to
Be Your Own Bank.

MELD Debit Card

An EMI is a service we require in order to release debit cards to our users. MELD protocol users will be able to use their cryptocurrencies to purchase goods or services without having to cash out to fiat currency.

The goal of the MELD debit card is to give customers financial control over their lives by unlocking the value of their cryptocurrencies. For example, through over-collateralized loans created in MELD DeFi protocol which are then sent as fiat to the customer's Neobank account and then allowing them to spend it anywhere major debit and credit cards are accepted*.
*Note: There is a KYC/AML process for MELD Neobank

MELD — Be Your Own Bank

We think it’s essential for everyone to gain control of their financial lives and have equal access to financial instruments used by professionals, not just centralized institutions, governments, or the 1%. We want to provide financial freedom and control to the masses, including the unbanked.

We have a long-term goal to enable the $15 trillion that is currently locked out of the global economy, including 2 billion individuals worldwide that are either underbanked or have no access to banking services whatsoever, access to these tools. These are the people that are paying the highest fees, and getting the worst customer service, and they are the ones that are having the most problems.

Our vision is to create an ecosystem that empowers individuals to regain financial control by providing them with the tools and services they need to manage their money on their terms. Whether that be creating a collateralized debt position (CDP) with cryptocurrency, earning an interest return for lending fiat to borrowers, or even participating in reward incentive programs, we strive to provide our users with the functions they need to manage their own financial lives.

Thank you everyone for your continued support towards MELD, the future of finance. We are super excited to share with you the MELD Neobank business plan and what’s in store for the future!
Stay tuned!