Kontigo is gaining interest by promoting a stablecoin-first bank model as a global alternative to traditional financial services.
At the same time, the rapid growth raises skepticism within the crypto community. There are questions about whether this model can scale sustainably without repeating past mistakes.
Brief rise Kontigo attracts attention
A new bank that fully focuses on stablecoins is rapidly climbing the ranks of the financial services sector.
Kontigo presents itself as a stable currency platform, with a self-custodial wallet allowing users to store value in Bitcoin and spend in local stablecoins. All transactions are recorded on the blockchain.
On Tuesday, Kontigo CEO Jesus Castillo announced that the company has raised $20 million through a seed investment round to pursue its goal: to become the largest bank in the world.
Castillo also called Kontigo the fastest-growing stablecoin neobank in the world. The platform offers both individuals and businesses a return of 10% on digital dollars, a stablecoin-linked card with Bitcoin cashback, and the possibility to invest in tokenized U.S. stocks, among other features.
The leadership team indicates that Kontigo aims to provide access to basic financial services to nearly 5 billion people worldwide. Notable institutional investors, including Base and Coinbase Ventures, support the company.
Despite the rapid success, there is also skepticism about Kontigo. Some, particularly within the crypto community, wonder if this is simply a familiar crypto narrative that has previously led to significant market problems.
No-KYC access raises warning signals
An important advantage that Kontigo emphasizes is that users worldwide can open an account and conduct transactions in USDC or USDT without having to comply with Know Your Customer (KYC) regulations.
This may seem less bureaucratic, but it quickly raises concerns among users and market watchers.
KYC regulations are intended to protect financial institutions from criminals. This means verifying identity and checking customer legitimacy.
Without such controls, both the platform and users are at greater risk of fraud, money laundering, and financing of terrorism.
Within the crypto sector, the lack of KYC standards has proven harmful to users of unprotected platforms.
Last week, Terraform Labs co-founder Do Kwon was sentenced to 15 years in prison for orchestrating a $40 billion crypto fraud. The Terra ecosystem operated without real KYC controls, allowing large flows of money to enter anonymously.
When trust in the algorithmic stablecoin waned, the lack of oversight caused a run on the network, less transparency, and greater losses for millions of users. This demonstrated how the absence of simple controls can turn rapid growth into a systemic crisis.
The absence of KYC standards is not the only thing that raises concerns about Kontigo's mission.
Yield promises test user trust
Castillo previously indicated that the 10% return on USDC comes from loans via the DeFi protocol Morpho, investments in U.S. Treasury bonds, and custody or yield services through Coinbase.
However, critical followers say the numbers do not add up and are concerned about the credibility of Kontigo's promises. The yields from these sources typically range between 3% and 7% per year, even when combined with current market conditions.
Skeptics wonder how Kontigo can sustainably offer a return of 10%. They suspect there may be hidden risks, leverage, or unclear strategies.
Meanwhile, another user reported that a USDC transfer had still not arrived in his wallet hours after sending.
For platforms that see themselves as banks or payment infrastructures, even short delays in the availability of funds can undermine user trust. Reliability and fast processing are basic expectations, regardless of the type of transaction.
As Kontigo grows, long-term credibility will depend more on well-executed services and established trust than mere promises of growth.
In a sector marked by previous failures, Kontigo is now under pressure to prove that rapid growth is achievable without repeating past mistakes.
