Kontigo is gaining increased attention by promoting a stablecoin-first banking model as a global alternative to traditional financial services.
At the same time, the rapid growth has led to skepticism in the crypto community. The model has raised questions about whether it can scale sustainably without repeating the mistakes that have plagued previous industry failures.
Kontigo's rapid growth is attracting attention
A new bank that builds its entire identity around stablecoins is rapidly climbing in the financial sector.
Kontigo positions itself as a platform for stable currencies and offers self-custody wallets that allow users to store value in Bitcoin and use local stablecoins, with all transactions recorded on the blockchain.
On Tuesday, Kontigo CEO Jesus Castillo announced that the company had raised $20 million in a seed round to pursue the ambition of building the world's largest bank.
Castillo also described Kontigo as the fastest-growing stablecoin neobank globally. He said the platform enables individuals and businesses to achieve 10% annual returns on digital dollars, use a stablecoin-linked card with Bitcoin cashback, and invest in tokenized U.S. stocks among several features.
Management says that Kontigo aims to provide access to basic financial services for nearly 5 billion people globally. The company is backed by prominent institutional investors, including Base and Coinbase Ventures.
Although Kontigo has received significant attention almost immediately, it has also been met with skepticism. Some observers have questioned whether this represents a familiar crypto narrative, which has previously led to catastrophic consequences for the market at large.
No-KYC access triggers warning signals
Among various advantages Kontigo highlights, the company has emphasized that users from anywhere in the world can open an account and start using USDC or USDT without having to comply with Know Your Customer (KYC) requirements.
This solution may seem less bureaucratic, but quickly raised concerns among users and industry observers.
KYC regulations are designed to protect financial institutions from malicious actors. The rules require identity verification and confirmation of the customer's legitimacy.
Without such safety nets, both financial platforms and users face increased risks of fraud, money laundering, and terrorist financing.
In the crypto industry, the absence of KYC standards has previously proven harmful to users relying on unregulated platforms.
Last week, Terraform Labs co-founder Do Kwon was sentenced to 15 years in prison for orchestrating a crypto fraud of $40 billion. Terra's ecosystem operated without meaningful KYC controls, allowing large amounts of capital to flow in anonymously and on a large scale.
When trust in algorithmic stablecoins faltered, this absence of oversight exacerbated pressure on the network, reduced transparency around capital flows, and increased losses for millions of users. The case highlighted how the absence of basic security mechanisms can quickly turn growth into system collapse.
The lack of KYC standards is not the only concern surrounding Kontigo's ambitions.
Yield promises test user trust
Castillo clarified at one point that the 10% return on USDC comes from lending through the DeFi protocol Morpho, exposure to U.S. Treasury bonds, as well as custody and yield services through Coinbase.
Nevertheless, critics argued that the numbers did not add up and questioned the credibility of Kontigo's promises. Returns from these sources typically range between 3% and 7% annually, even combined in today's market.
Skeptics questioned how Kontigo can offer 10% annual returns in a sustainable way. They pointed to the possibility of hidden risks, use of leverage, or opaque strategies.
At the same time, another user reported that a USDC transfer had not been credited to the wallet several hours after completion.
For platforms that market themselves as banks or payment infrastructure, even short delays in access to funds can undermine user trust. Reliability and precise settlement are fundamental expectations – regardless of transaction amounts.
As Kontigo grows, its long-term credibility will depend more on execution and actual earned user trust than on claims of growth.
Within a sector characterized by previous failures, the company must now demonstrate that rapid expansion can be sustained without repeating the mistakes that defined previous crypto collapses.
