What is NeoFi? - Part 3 of 3

This is Part 3 of the NeoFi series. In Part 2, we examined what segments of NeoFi infrastructure have been built so far, and which are still coming online.

In Part 3, we’ll explore the benefits, challenges, and realities of NeoFi and its future.

Why Now?

Three things converged.

First, stablecoins achieved escape velocity. $300 billion in market cap. $33 trillion in estimated transaction volume in 2025. Interactive Brokers, Stripe, Fidelity, and PayPal are all building stablecoin infrastructure. For years, people asked "what's the killer app?" It was always right in front of us, it was digital dollars that anyone can hold, send, and earn on, without asking permission.

Second, regulatory clarity is emerging. The GENIUS Act gave the US its first stablecoin law. MiCA gave Europe its comprehensive framework - one licence, access to 450 million people. Frameworks in Japan, Hong Kong, Singapore, and the UK are live or advancing. The ambiguity that paralysed builders for years is giving way to workable rules. This matters enormously for NeoFi, because these products inherently touch both regulated and unregulated systems.

Third, the infrastructure is ready. Modern L1s and L2s are cheap. Account abstraction is real. You can build a product today that onboards a user with an email, gives them a smart wallet, connects to their bank account, deploys their savings into a Morpho vault, and lets them spend the yield with a debit card. Two years ago, that was science fiction. Today, teams are shipping it everywhere.

Being Honest About the Limits

Let's be clear. NeoFi removes friction, not risk. Assets can still default. Issuers can still fuck up. Custodians can still fail. Jurisdictions still matter. Legal structures still matter. Tokenization doesn't eliminate complexity, it drags it into the open where you can't ignore it anymore.

Not everything needs to be tokenized. Some assets don't benefit enough to justify the overhead. Some systems are already efficient. Tokenization should be driven by outcomes only.

And UX is still a nightmare. Wallets scare people. Key management is unforgiving. Mistakes are permanent. Most people don't fear blockchains, they fear fucking something up and having no way back. Adoption only accelerates once that complexity is hidden behind interfaces that feel normal.

There's another thing worth saying plainly: faster settlement doesn't mean zero settlement. Blockchains settle in seconds, but the real world doesn't. Legal processes, banking rails, reporting cycles, and human checks still take time. A tokenized asset is more like a receipt than a live object, it updates when something real happens. The chain is fast. The asset isn't. And that's not a bug. It's reality. Speed is a property of the asset, not the ledger.

Why This Takes Time

None of this changes overnight. Talking about it is easy. Building it is hard as hell. People have to form legal entities, work with regulators, get licenses, integrate with banks and custodians, pass audits, and operate across jurisdictions that all treat this stuff differently. That work is slow, expensive, and mostly invisible. That's why this space feels overwhelming.

NeoFi isn't just new tech. It's new workflows, new responsibilities, and new mental models. For crypto natives it feels restrictive. For traditional finance it feels unfamiliar and that tension is unavoidable.

The Macro View

Here's what I keep coming back to: crypto was never supposed to be a parallel universe. The original promise wasn't to build a financial system that only works for people willing to abandon the existing one entirely. It was to build tools that give everyone more control, more access, and more freedom in their financial lives.

For a while, we got lost in the purity of it. We told ourselves that everything had to be onchain, trustless, and fully decentralised or it didn't count. And at the protocol layer, I still believe that, primitives should be as robust and dependency-free as possible.

But at the product layer? The layer where real humans interact with real money to solve real problems? The right answer has always been hybrid. Meet people where they are. Give them something meaningfully better than what they had before, even if the underlying architecture doesn't satisfy every cypherpunk's ideological purity test.

NeoFi is the recognition that the most impactful thing we can do is not to replace the legacy financial system overnight, but to make it porous. To create so many integration points between onchain and offchain that the distinction eventually stops mattering. To build products so good that people use them without knowing or caring that there's a blockchain involved and yet benefit from the permissionlessness, transparency, and composability that only open systems can provide.

Conclusion

There's a long road ahead. Anyone pretending otherwise is either naive or selling you something. When better infrastructure exists, it replaces worse infrastructure. Not because of narratives. Not because of slogans. But because businesses and users choose systems that cost less, move faster, and make more sense.

That's how financial change actually happens. NeoFi isn't a rebellion against the real world. It's a response to it. A slow, painful, unglamorous rebuild of the rails that move money underneath everything else. If money moves better, the system improves. If the system improves, trust can slowly be rebuilt. And when that happens, NeoFi won't need convincing.

It'll just be how money works.

Sources: RWA.xyz · CoinGecko · CoinMarketCap · Citi GPS · Mason Nystrom · Andy (The Rollup) · Dan Elitzer · Stablecoins 2030 · J.P. Morgan Research · BIS · McKinsey · TRM Labs · Tiger Research · S&P Global Ratings · ESMA · EBA · European Commission · OCC · FDIC · Nascent · Coinbase · Morpho · Ethena

This article is for educational purposes only. It is not financial or legal advice.