Visa-owned fintech enabler Plaid, which connects traditional bank accounts to thousands of digital platforms, including crypto exchange Coinbase, is quietly working with at least two decentralized finance (DeFi) startups.
Plaid’s head of UK, Keith Grose, a former Google wallet builder, has a vision for how crypto (and DeFi) will evolve in tandem with the fintech revolution his company is said to be driving.
The firm currently has integrations with Dharma, the Uniswap-friendly DeFi wallet with early backing from Coinbase and others; Teller Finance, the DeFi startup looking to bring unsecured lending to the Ethereum blockchain; and potentially others.
Open banking and DeFi may occupy quite different levels of digitization’s evolutionary ladder, but Grose sees a “common democratizing thesis” when it comes to accessing and using financial assets.
“I think it’s still a long way before DeFi becomes part of the main route for finance, but it’s a really exciting corner and one that personally I’m passionate about,” Grose told CoinDesk.
Still, nobody would deny DeFi is a stretch for regular fintech. Systems that are completely open to anyone, and where participants’ identities are essentially hidden behind a wallet address, present problems in today’s digital world. But people in Silicon Valley or Wall Street aren’t stupid, they attempt to manage their own disruption, and to some extent even buy into it. Take for example the way enterprise has tried to embrace blockchain, or perhaps the lengths Visa went to in acquiring Plaid.
Armed with a widely-used API and a huge $5.3 billion exit earlier this year thanks to Visa, Plaid has become instrumental in opening up consumer finance by allowing transaction data to be shared with third-party fintech platforms.
But persuading banks to open up to fintech is just the beginning, says Grose, who sees crypto as a next logical…