Skip to main content

What Is Web 3.0? (And Why Should Banks & Credit Unions Care?)

 


A new version of the web-based on blockchain technology — is being predicted and promoted. Even though the trend has vocal naysayers, elements of Web 3.0 are already in use, including by a new crop of disruptive nonbank competitors.

By Steve Cocheo, Executive Editor at The Financial Brand

If the term “Web 3.0” has crossed your radar, and you are wondering what it is and whether it’s worth starting another ulcer over, we have four words for you: Eco, Valora, Compound and TrueFi.

Eco, which promotes the fact that it is not a bank and not FDIC insured, offers accounts held in stablecoins that function as both spending and savings accounts, but with higher returns.

Valora is an app available through the App Store and Google Play that uses the blockchain to deliver a version of P2P services out of a mobile crypto wallet.

Compound describes itself as “an algorithmic, autonomous interest rate protocol built for developers, to unlock a universe of open financial applications.” Among the services using it is Compound Treasury, which promises a 4% annualized return with dollar deposits turned into stablecoins as well.

TrueFi is a marketplace lender offering unsecured loans for borrowers and an opportunity for people with funds to invest in loans to earn a higher return. TrueFi is a form of decentralized finance — “DeFi” — using stablecoins.

Numerous tech and crypto investors back these fledgling companies, all of which are doing business through some aspect of “Web 3.0,” also called “Web3.” One investor in common is Andreessen Horowitz.

The venture capital firm is investing heavily in crypto through a hedge fund. In late 2021 it launched a lobbying campaign in support of its idea of how the World Wide Web should evolve, and, along with it, many of the businesses and activities that tie into it — including financial services. This push so far includes issuing ten Web 3.0 principles for world leaders shaping the future of the web and publishing a major Web 3.0 white paper, “How to Win the Future: An Agenda for the Third Generation of the Internet.”

Regarding financial services, that paper states: “Our financial system needs to be revamped for fast payments. It also needs to be more inclusive; for instance, by improving access to credit through better credit scoring that incorporates more data sources. Web3 has demonstrated the potential of alternatives to the current system. Decentralized finance, or DeFi, is also supplying a wave of new infrastructure to support more sophisticated financial products…”

There’s more in the paper, but it’s far from the only voice in Washington promoting Web 3.0. Anti-bank rhetoric is part of it.

In congressional testimony on Web 3.0, Brian Brooks, former Acting Comptroller of the Currency, who liberalized treatment of crypto activities by national banks, said in part: “Do we believe a user-controlled decentralized internet is better than an internet largely controlled by five big companies? … Do we trust big banks more, or open-source software more, as a tool for maintaining ledgers of account and allocating credit and capital?” Brooks is now CEO of Bitfury Group, a supplier to the cryptocurrency business.



Clearly, both traditional financial institutions as well as neobanks and fintechs have to understand what Web 3.0 is and how it could develop. The following Q&A presents the basics of what is already becoming a very complicated new field.

Comments

Post a Comment

Please no profanity or political comments.

Popular posts from this blog

Sunday Reading - We Hold These Truths to Be Self-Evident

We Hold These Truths to Be Self-Evident .  The Declaration of Independence is the founding document that formally announced the American Colonies' break from British rule. Adopted on July 4, 1776, it laid the philosophical and moral foundation for American self-governance, asserting that individuals possess inherent rights and that governments must be accountable to the people. While it didn't create a government or legal framework, the Declaration marked the birth of the United States as a sovereign nation. >  Hear why the Continental Congress decided to declare independence, how the text took shape...
Post a Comment
Read Complete Article HERE>»

Stern Advice: Financial predictions for 2012 | Reuters

Stern Advice: Financial predictions for 2012 | Reuters : " A lot of people are predicting more of the same for 2012: Another year of stock market volatility, high unemployment, banking industry upheaval, weak housing and more talk about Facebook, mobile commerce, 401(k) plans and taxes. But maybe that's just because it's hard to envision change." 'via Blog this'
Post a Comment
Read Complete Article HERE>»

Ramp Up Cyber Spending As AI Reshapes Industry Priorities

NEW YORK—Artificial intelligence is rapidly becoming the defining force shaping banking strategy, with 80% of banking executives now expecting AI to significantly disrupt their business and operating models within the next three to five years, according to KPMG's 2026 Banking Technology Survey. The survey of 200 U.S. banking executives found institutions are responding by accelerating investments in cybersecurity, payments modernization and technology-driven acquisitions. "AI, payments modernization, cybersecurity, and tech-driven M&A are no longer separate agendas," said Peter Torrente, KPMG's U.S. Banking Sector Leader, who said banks are increasingly being challenged to keep pace across technology, risk and growth simultaneously. Cybersecurity remains a top concern. More than three-quarters (76%) of banking leaders reported an increase in cyberattacks over the past year, while 92% said they are boosting cybersecurity budgets. In addition, 84% are increasing cyb...
Post a Comment
Read Complete Article HERE>»

What You Might Not Know About July 4th.

Post a Comment
Read Complete Article HERE>»

What Credit Unions Can—And Can't—Do With New Trump Accounts

07/02/2026 09:36 am         WASHINGTON--With Trump Accounts set to officially launch July 4, America’s Credit Unions updated its frequently asked questions document to clarify the role of credit unions now and in the future. Credit unions do not have a role to play yet, as the Treasury has not announced steps to transition accounts from initial provider BNY Mellon to other authorized institutions, ACU noted. Trump Accounts are tax-deferred accounts that can be established on behalf of a child under the age of 18. Account contributions begin after July 4, with contributions up to $5,000 a year allowed. Created by H.R. 1, the law also established a pilot program to deposit a one-time $1,000 grant into accounts of children born between Jan. 1, 2025 and Dec. 31, 2028. Once the child turns 18, the account funds are available for educational expenses, home ownership, entrepreneurship, and other designated purposes. Once guidance is available from Treasury, credit unions ...
Post a Comment
Read Complete Article HERE>»

White Paper from WOCCU Examines How Stablecoins are Reshaping Financial Infrastructure

WASHINGTON– World Council of Credit Unions (WOCCU) has released a new white paper that examines how stablecoins are reshaping the financial infrastructure that credit unions and other cooperative financial institutions rely on to serve their members.  According to WOCCU, the white paper, How Digital Money Is Impacting Credit Unions, Part 1: Focus on Stablecoins , is the first in a planned three-part series exploring how emerging forms of digital money are affecting the global credit union movement.  “The report begins by noting that stablecoins are no longer a niche fintech development, but part of a broader structural shift in how money is stored, moved and regulated,” WOCCU explained. “As commercial banks, payment networks, technology firms and retailers build stablecoin offerings or integrate stablecoin rails into their platforms, credit unions must consider how these changes could affect deposits, payments, member relationships and long-term institutional relevance.” For ...
Post a Comment
Read Complete Article HERE>»

Half of Credit Union & Bank CEOs are Now Older Than 65, Up From 20% Two Decades

NEW YORK — At a time when there are some generational changes in credit union leadership taking place, a new analysis has found the nation’s bank CEOs are getting older, with half of the chief executives leading banks now older than 65, compared with fewer than 20% two decades ago. The KBW Bank Index from Truist Securities found that the median age of bank CEOs has increased by 10 years since the early 2000s, mirroring a broader aging trend among corporate leaders across the United States. However, bank executives remain older on average than their counterparts in many other industries, according to the analysis by Truist Securities Managing Director John McDonald and associates Peter Nicolo and John Manahan. One reason is tenure. Bank CEOs typically remain in their positions longer than executives in many other sectors. According to data from CristKolder Associates cited in the report, financial-services CEOs average nine years in the role, compared with 5.4 years in the energy secto...
Post a Comment
Read Complete Article HERE>»

Emerging Risks and How to Mitigate Them

5 Emerging Risks and How to Mitigate Them With each technological advance emerges new risk. Think about it: Every technology upgrade, new mobile device and new payment method brings exposure that wasn’t identified previously. The real threat occurs when these risks aren’t anticipated or communicated within your organization. Here are five emerging risks every credit union should have on their radar right now: Social media. Employees posting comments on social media that are inaccurate or appear incomplete or disparaging can threaten your organization’s reputation. Be careful when taking disciplinary action, as the National Labor Relations Board can classify social media activity as “protected concerted activity.” Mistakes here can lead to retaliation, wrongful termination claims and expensive litigation. Internet of Things (IoT) era . The IoT offers new tools and technologies that provide constant connectivity. It also creates new opportunities for data compromises. Workplace ...
Post a Comment
Read Complete Article HERE>»

The Federal Open Market Committee (FOMC) voted to raise the target range for federal funds

WASHINGTON–Although debate has increased recently over whether it should do so, as expected, the Fed has moved to raise interest rates. The Federal Open Market Committee (FOMC) voted to raise the target range for the federal funds rate to 2%-2.25% to 2.25%-2.50%. “Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate,” said the FOMC in a statement following today’s meeting. “Job gains have been strong, on average, in recent months, and the unemployment rate has remained low. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2%. Indicators of longer-term inflation expectations are little changed, on balance.” Fed watchers have bee...
Post a Comment
Read Complete Article HERE>»

ATMs and the Windows 11 Software Upgrade

ATMs and the Windows 11 Software Upgrade Joe Woods, SVP Marketing & Partnerships Dolphin Debit Access There is a lot of information and misinformation circulating regarding the required Windows 11 software. Windows 10 is sunsetting and therefore Windows 11 is now the new operating system of choice moving forward. Many of us may not realize, however, that there are multiple versions of Windows 10. These different versions have different sunset dates, different options for extended service plans as well as different applications. Your ATM’s will be required to upgrade to Windows 11 at some point in the near future. However, that future could be four months away or forty months away. And if costs are similar to the Windows 10 upgrade, you could be spending $5,000-$14,000 per ATM for the upgrade.   To figure out what is best for you, you need to examine your ATM fleet. Several factors need to be considered for this change from Win10 to Win11. Making a rash decision to per...
Post a Comment
Read Complete Article HERE>»