Digital banking service Step has secured $300 million in new debt funding round, which coincided with the company’s launch of a crypto investment platform aimed at minors and young adults – their key clientele.
The banking platform’s funding round was led by Triplepoint Capital and Evolve Bank & Trust, the company said.
According to the company, minors and young adults can only use the new crypto investment platform with the consent of a parent or legal guardian to buy and sell bitcoin, with additional stocks and cryptocurrencies to join the platform soon.
Alongside the new platform, Step also introduced Money 101 – a financial literacy program – a six-lesson course that spans the banking sector to cryptocurrency investing.
According to The Block, with the funding secured, Step’s raise now totals $500 million, including debt and equity financing, from investors such as Crosslink Capital, Stripe, Coatue, General Catalyst, Triplepoint Capital, Charli D’Amelio, Stephen Curry, Justin Timberlake, Will Smith, The Chainsmokers, Alex Rodriguez, and others.
Step previously, in April 2021, closed a $100 million round of Series C funding after growing to more than 1.5 million users just six months after launch.
The round was led by General Catalyst, which came shortly after Step’s $50 million Series B.
Step is competing in a crowded market of mobile banking services aimed at a younger demographic, but it’s one of very few that targets teenagers ages 13 to 18.
According to the company, Step’s app allows teens access to an FDIC-insured bank account without fees and a secured Visa card that helps them establish credit before they turn 18.
The app also offers Venmo-like functionality for sending money to friends.
@crypjunkie @Liquid_BTC has confidential transactions today. You can try it out in @blockstream green or https://t.co/4pxLYY9AiL That seems like a nice first step, for mainchain better to use the inflation proof elgamal commitment variant. Ideally with some more size optimization though.
The crypto community has a saying: “Not your keys, not your coins,” which means that if you hold your crypto on a third-party custodial wallet, you don’t truly have ownership of the coins. The entity controlling the private key of the wallet ultimately has power over it. Self-hosted wallets, or non-custodial wallets, allow individuals to receive, send and store their own cryptocurrency without the need of a custodial entity.
As life has become increasingly more digitized, the use of cash for transactions and as a store of value has declined considerably. For those in our economy with access to digital resources, online transactions and money services have taken over. However, many individuals stuck in the cash economy do not have the luxury of shopping online or making use of the efficiency of digital transactions.
Related:Americans don’t want to give up their paper money, but they should
According to the Federal Deposit Insurance Corporation’s 2017 survey of unbanked and underbanked households, approximately 6.5% of households in the United States do not hold an account with an insured financial institution. Almost 19% of households are underbanked, meaning that while they hold at least one account at an insured institution, they still utilize financial products, such as payday loans or cash-checking services. Reasons for these individuals being underbanked can vary from past financial mistakes, a lack of trust in financial institutions, not having enough money for the minimum balance, or wanting to avoid fees. These reasons remained relevant two years later, according to the FIDC’s 2019 survey, where a lack of trust is among the top reasons.
Self-hosted wallets create the value thesis of cryptocurrencies. They allow anyone secure, equal access to a large and growing amount of financial tools, such as DeFi or staking, enabled by blockchain technology. Individuals with these wallets are able to access these tools and securely send money without a third-party intermediary — an impossible feat before the invention of Bitcoin (BTC). These peer-to-peer transactions do not require an intermediary entity because the act of “cutting out the middleman” is what enables the unparalleled efficiency and financial equality that cryptocurrency provides.
By potentially regulating the use of self-hosted wallets, the U.S. government would be creating a barrier for these underbanked and unbanked individuals from accessing cryptocurrency and hindering the greatest catalyst of financial inclusivity the world has ever seen. At the same time, they would also be giving more power to intermediaries in the cryptocurrency space. An internet connection is all that is needed to interact with the global financial system. This is a huge step forward in providing financial freedom to all, making financial services available to the billions who currently lack access. By removing this feature, the government would be rendering cryptocurrency useless to Americans without the specified identification.
Related:How US authorities are using old AML tools to crack down on crypto
In addition, wallets aren’t just digital bank accounts — they’re digital safes. A self-hosted wallet allows people to store all types of digital assets from important documents to tokenized real estate to fiat-tethered cryptocurrencies. Taking away an individual’s right to own their own physical safe would be ludicrous. Taking away the right to own a digital safe is tantamount to an infringement on the rights of Americans.
Cryptocurrency has seen more growth and created more wealth than any other invention in recent history. The U.S. is at the forefront of this boom and has seen immense growth of many companies, the creation of thousands of new jobs and greater financial independence of its citizens as a result. Imposing a regulation that requires wallets to be custodial would put the U.S. behind the eight-ball by stifling innovation and hindering widespread adoption. While other countries continue to use cryptocurrency in its fairest and most streamlined form, the U.S. would be throttling the growth that cryptocurrency’s free market facilitates.
The blockchain ecosystem is still in its infancy, and its true potential hasn’t even been close to realized. Regulating such an important aspect of this new and useful technology would have disastrous repercussions on innovation within the crypto space, likely preventing the future invention of revolutionary products and services that will live on the blockchain.
Related:Friendliest of them all? These could be the best places for crypto
A clear and concise regulatory framework is something the cryptocurrency industry needs, but this is not the approach to take. When creating new regulations, the U.S. government must collaborate with industry professionals and scholars to find a solution that creates strong consumer protections, stimulates innovation and ensures that all cryptocurrency users have secure access to essential financial services.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Ben Weiss is the chief operating officer of CoinFlip. Ben leads a team of 40 employees and has overcome the logistical challenges of building out CoinFlip’s ATM network infrastructure from the ground up. He graduated from Vanderbilt University with a degree in economics and is a trustee of the New Jersey Blockchain Coalition and a board member of the Blockchain Advocacy Coalition. He’s looking forward to watching the crypto space evolve from a niche industry to a global force.
There’s a group of Bitcoiners out there who know just enough to be dangerous & they are recommending managing private keys with airgapped PCs instead of hardware wallets. This is a step backwards in usability, which is a key component of /practical/ security.