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Trusting stablecoins

Talking specifically about fiat-backed stablecoins, I agree many issuers are not doing enough to be transparent. The thesis of non-custodial neobanking relies heavily on trusted stablecoins like USDC and PayPal's PUSD setting standards and guiding regulatory oversight. Circle is on the floor having these discussions with regulators. 

Outside of the US, self-regulatory bodies like Stablecoin Standard are helping to provide a structure where regulations are lacking.

What I like about stablecoins vs FBO-style neobanking

• Transparency - The stablecoin issuer is independent of the neobank offering. This means there are more eyes on how it is being managed, whereas an FBO-style account is exclusively managed by the partner bank and neobank respectively.
• Business model - Circle has proven that being a stablecoin issuer can be done profitably, which means issuers can stay focused on their core offering.
• Open innovation - Building on stablecoins new fintechs have the freedom to build on open standards, whereas with BaaS often the infrastructure has been gated with a pretty steed fee.
• Non-custody element - Customers always have the option to self-custody the tokens.

Why some customers want stablecoins

I agree in stable markets like the US, customers may just switch back to traditional banks where neobanks fell short. However, I think there is a strong argument to be made outside of the US where customers simply want access to USD. USDC is not pretty easy to come by and it becomes a convenient way to pay for services across borders or even paying friends.

People who spend a lot of time online and/or do work online will likely be more exposed to the option of receiving payment in USDC, instead of via international wire transfers.

There is also the case that some customers might not want stablecoins, but it is kind of forced onto them by the fintechs. For example, PayPal making a huge push for PUSD.