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How onchain is your bank?

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I bumped into an interesting online debate the other day, that started with Brian Armstrong, the CEO and founder of Coinbase, who always has something worthwhile to say. His opening line on a recent Coinbase blog is a good example:

Coinbase is working to update the financial system that was built over 100 years ago by enabling a broad set of crypto use cases that create more economic freedom and opportunity in the world.

Brian goes on to list ten businesses he would build in the payments world today:

  • a coin that is decentralised and people could spend, unlike bitcoin
  • a decentralised reputational score to identify your digital trustworthiness
  • placing physical assets onto the network through tokenization

... you can read the rest here but, what stood out for me, is that it’s all about being onchain. Forget online, today you need to be onchain.

I agreed with much of what Brian was discussing, until I saw Ari Paul begin a pushback thread to argue that many of these ideas had been tried and failed before …

He had a couple of sobering thoughts. For example, in building an onchain reputation: “every uncollateralized and substantially undercollateralized lending protocol and company blew up 2 years ago (celcius, blockfi, dozens of defi protocols, etc) you can't do credit without real credit underwriting, which requires much fuller picture”.

Or, when Ryder0x proposed that Brian’s propositions might get rid of the 3% fees charged by the likes of MasterCard and Visa: this is one of the first thing crypto natives pitched for bitcoin, even back as far as 2010.  And it was 'solved' before crypto.  Instant and free txs exist through tradfi from paypal/venmo/zelle, etc etc.  The key thing, that 1-2% visa fee isn't to transfer money or pay”.

What is interesting is that this then led to another rabbit hole with Omid arguing that PayPal/Venmo/Zelle offer free P2P as loss leader. The internet is such a wonderful place to connect and argue … and show ignorance and wisdom. For example, Ari’s commentary clearly shows someone who knows a bit about risk and reward in financial markets and, interestingly, he ends up saying:

I felt the same way. So, the net:net is that Brian’s original blog post is well worth a read. I don’t get all of what he’s saying, but am actively researching more to understand it better. The key is that you may be arguing about digital transformation, tokenization, crypto, fintech and more, and how it affects the bank … but what about the onchain bank? How does that look and how does it settle, provide liquidity, build capital, offer lending and the other services traditionally offered offnet, now offered online but needs to built for onchain … have you even thought about it?

On-Chain, as the name implies, refers to blockchain transactions that exist on and have been verified to the blockchain by miners or validators. On-Chain also means that transactions have been recorded to the blockchain, as defined by BabyPips


BTW, did I mention adding AI to Onchain ... OMG

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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