What Is Bitcoin Banking? How Web3 Is Redefining the Concept of a Bank

The concept of “banking” is undergoing a quiet revolution. What was once synonymous with centralized institutions, legacy infrastructure, and strict gatekeeping is now being reimagined by Web3 technologies. At the heart of this transformation is the idea that individuals should have more control over their assets, without relying on intermediaries. This is the ethos behind Web3 banking.

Web3 Banking vs. Traditional Finance

Traditional banking is built on custodianship. Banks hold your funds, approve your transfers, and control how and when you interact with your money. In contrast, Web3 banking is decentralized and often non-custodial, meaning that the user, not the bank, retains control of their funds.

Web3 banks leverage smart contracts, self-custody wallets, and blockchain-based identity systems to create transparent, programmable financial services. Instead of credit checks and closed-door approvals, Web3 enables open access, privacy-preserving lending, yield opportunities, and global money movement without the need for traditional SWIFT rails.

The Role of Bitcoin in Web3 Banking

While Ethereum and other smart contract platforms have pioneered many of the DeFi and Web3 banking innovations, Bitcoin has historically played a different role. As the most secure and valuable blockchain, Bitcoin was designed as a store of value and medium of exchange, not as a platform for complex financial services.

This architectural difference has resulted in Bitcoin-based banking solutions lagging behind Ethereum and Solana-based platforms in terms of features. However, that’s starting to change. Protocols like the Lightning Network and emerging L2s are enabling faster, cheaper Bitcoin transactions, while more development is taking place around wrapping BTC for use in smart contract environments.

One example of how this shift is manifesting can be seen in the rise of non-custodial, Bitcoin-native banking services. Mobilum, a regulated Web3 payments infrastructure provider, has introduced what it describes as the industry’s first Bitcoin neobank built entirely on non-custodial principles. By combining fiat-to-crypto on-ramps with wallet tools and regulatory readiness, Mobilum enables users to engage in everyday financial actions, such as payments and transfers, without surrendering control over their private keys.

Mobilum’s innovation highlights a broader trend: as Bitcoin’s role in everyday finance grows, the tools to support that evolution must adapt. Rather than retrofitting Ethereum-style DeFi products onto Bitcoin, Mobilum is among the few building native experiences that reflect Bitcoin’s principles.

Other Players to Watch

While Mobilum is focused on the Bitcoin layer, other brands are building the broader Web3 banking landscape. For example, Revolut has added crypto custody and staking to its global app, making it a hybrid between traditional finance (TradFi) and Web3. Meanwhile, Zebec is pioneering on-chain streaming payroll, allowing users to earn and spend crypto in real-time, thereby bridging the gap between employment and finance.

Each of these services reflects different angles of the same movement: rethinking how we bank, how we get paid, and how we store value in a decentralized world.

What’s Next for Bitcoin Banking?

Bitcoin banking is still in its early stages, but its potential is enormous. The growth of programmable wallets, open-source identity, and zero-knowledge compliance tooling will help accelerate its adoption. At the same time, as more users demand financial tools built around Bitcoin’s ethos of security, transparency, and autonomy, companies will be incentivized to develop user-centric infrastructure.

We are likely to see more “modular” financial stacks, where users can choose the level of decentralization they prefer. Some may opt for fully non-custodial services, such as Mobilum, while others might prefer hybrid models. What’s clear is that Bitcoin will not remain just a passive store of value; it is evolving into a platform for next-generation banking.