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Maybe things have changed now but last I heard, cash is legal tender and it's illegal not to accept cash.

Blockchain does not create immutable record of transactions by itself. Somebody has to provide the data to it. 

FTX committed fraud. No fraudster shares data publicly - on the blockchain or otherwise. 

SVB was insolvent on MTM basis and solvent on HTM basis. It faced a run when it announced publicly that it had to sell AFS securities at a loss to meet liquidity demands and that its effort to raise fresh capital to shore up its impaired equity position was unsuccessful. Providing this data on the blockchain would not have not prevented the run. 

Even as one who regularly shills the blockchain - e.g. Blockchain Loyalty Programs - Sizzling Or Fizzling? - I find this article to be a very lame shill.

Happy to note that the Drunk Under Lamp Post regulation has gone beyond Bank pet whipping boy to include Social Networks and TELCOs but sad to note it hasn't gone far enough to cover Electric Company, et al. 

Fraud v Scam: Who Is Liable For Cybercrime

tl;dr but, for all the reasons you've given in your second paragraph, I totally agree that lending is a very tricky business. The deeper I get into studying about lending, the more I start wondering what's the big deal in rocket science!

Payment Banks are very much a thing in India but they haven't found great adoption.

Are you aware that Fed actually discourages narrow bank, the equivalent of payment bank in USA, on the ground that, somebody has to take risks and make loans for the economy to grow, if banks won't do it, who will.

Anyone knows who takes the Acquirer Risk in the case of a "UPI via Kiwi Credit Card" transaction? 

FWIW I stand with Innovate Finance. 

BNPL has done a great job of democratizing credit, that too mostly free credit. It's lame to regulate it on the presumption - even if true - that it preys on the vulnerable.   

Regulators need to understand that a for-profit private sector company can either democratize or protect the vulnerable, but not both. 

If they really want to do both, they should try out the Indian playbook of setting up not-for-profit operators e.g. NPCI for Digital Payments, ONDC for Ecommerce.

NPCI has democratized digital payments with UPI. Due to Reg ZeroMDR, merchants do not incur any cost for accepting digital payments. The only people who are stiffed are greedy banks.

ONDC is trying to do the same thing in ecommerce by providing a zero commission network between buyers and sellers, thereby democratizing digital commerce for both buyers and sellers, and stiffing only the fatcat Swiggys and Zomatos.

This could be BIG!

From time to time, we hear about alternative sources of information for lending, trading, investing and other financial endeavors.

Social media feed for BNPL seems to be popular.

We don't hear much about Twitter sentiment for stock trading these days.

After getting off on a good start, time will tell how ChatGPT fares in stock trading / investing. 

Cash in circulation has risen in USA, India, etc. despite the explosive growth of Zelle, UPI and other cashless payment methods. While it may not be around for 190 years, cash ain't going away anytime soon. 

The Death Of Cash Is At Least 190 Years Away.

It's 10 years since I wrote that post. At the time the mobile wallet frenzy was at a peak and finsurgents predicted that cash would be dead in 5-10 years. Still here we are. 

tl;dr.

As the SVB fiasco showed, UX CX frictionless customer centric are all frills, end of the day banking is still about asset liability management and customers are not loyal even when they're given 5-star treatment. 

So the two things that matter for neobanks are (1) Source of funds to lend out to SMEs, and (2) Strategy to collect loans and recover delinquent outstandings. If these questions are answered somewhere in your post, it'd be great if you could point them out to me.