A group of three ex-Signature Bank leaders has launched N3XT, a blockchain-based bank offering round-the-clock instant payments.
Led by CEO Jeffrey Wallis, the former director of digital asset strategy at Signature, the Wyoming-chartered establishment will operate on a non-lending model contrasting, holding each dollar in cash or short-term U.S Treasuries.
As of 2024, nearly 30% of all UK adults were living cashless lives. The decline in cash payments reflects the preferences of a new generation of consumers who favour faster methods. Undergoing a digital shift driven by younger demographics, peer-to-peer transactions completed in seconds have become the norm. To keep up with an increasing demand for swift and seamless digital payments, many banking institutions have started offering instant transfer options, enabling recipients to access their funds in roughly ten seconds. Real-time payment networks have also revolutionised the business world, with N3XT Bank betting on blockchain technology to improve cash flow and curtail operational inefficiencies.
At the wheel is Jeffrey Wallis, who expressed his intent to bring crypto-driven innovation into banking to provide institutional clients with the programmable payments required in a 24/7 global economy. Previously serving as head of Web3 strategy at Signature, Wallis stated that money should flow “as seamlessly as information.” Kyle O’Donnell, another former Signature executive, holds the position of chief information officer. A third ex-Signature executive, Scott Shay assumes the role of N3XT’s founder. The enterprise marks his fourth venture into founding a bank, as the American businessman co-founded Signature Bank.
Keenly aware of the issues that caused the crypto-friendly establishment to crash in 2023, a bank failure that ranks as the third-largest on record in the US, its former executives will steer clear of all lending activities, unlike traditional fractional-reserve banking. The sudden collapse of the New York-based institution sent shockwaves throughout both its customer base and board, although a report issued by the Federal Deposit Insurance Corporation later established that “poor management” contributed to the bank’s downfall. Bank executives, the FDIC report said, failed to fully understand the risks linked to crypto deposits, which made up over 20% of total deposits.
Launched in Cheyenne, Wyoming, N3XT opened under the state’s new SPDI charter. Supporting 24/7 blockchain-enabled B2B payments, this “narrow bank” caters to industries such as logistics, foreign exchange, and cryptocurrencies, letting businesses automate their transactions with smart contracts. The company received backing from investors such as venture capital firms HACK VC and Paradigm. According to Crunchbase, it has raised a total of $72 million over three funding rounds, the most recent of which occurred in October.
The launch comes at a decisive time for the financial services sector, with organisations eager to harness the power of blockchain technology to reduce processing time and transaction costs while enhancing the experience for end users. In areas like banking, blockchain is moving into mainstream use, prompting even conventional banks to overhaul their protocols.
Fintech companies such as Ripple shook up the industry by enabling quicker, more cost-effective cross-border payments via decentralised blockchain networks like the XRP Ledger, whose interoperability bridged fiat and cryptocurrencies. By holding XRP rather than multiple foreign currencies, banks can achieve instant currency conversion and settlement, reducing the need for pre-funded accounts and freeing up liquidity. Major institutions like Hong Kong’s Standard Chartered were among the early adopters of Ripple’s blockchain-based solutions.
The technology is disrupting many more sectors, with blockchain adoption soaring in fields such as supply chain management, retail, and hospitality. In the entertainment industry, almost 3% of video game developers use blockchain to monetise their titles. Incidentally, major cryptocurrencies like Bitcoin and Ethereum are now common payment methods on iGaming platforms.
Not all users need to add money to their account to sample a casino’s gaming library, however. Upon sign-up, newcomers can grab welcome promotions like no-deposit bonuses. Bonus credit can be spent on specific games, while free spins boost the chances of hitting wins on slot machines. Players can find out all about their wagering requirements on specialised websites. Industry experts also guide users through the registration process to help them stay away from bad actors abusing bonuses.
Many hurdles still block the widespread adoption of blockchain, but this decentralised ledger is gaining traction across the banking world. Leading financial institutions, including Goldman Sach and JPMorgan Chase, have been developing blockchain-based services for international payments, trade finance, and KYC verification. Building from the lessons of the Signature collapse, the team behind N3XT Bank is embracing crypto innovations all the same.