Intellabridge tries to build new future for banking

BOULDER — If Intellabridge Technology Corp. (CSE: INTL) gets its way, traditional banking — and the ways in which it takes advantage of its customers — could be on the way out. Intellabridge, a Boulder blockchain company that was founded in 2017, is developing an app — launching at the end of September — that aims to decentralize traditional banking for everyday customers, giving them the ease of use of legacy banking while also providing the higher interest rates, security and protection from inflation that the nascent decentralized finance space offers.

“We are at the beginning of a massive disruption in the financial space,” said John Eagleton, CEO of Intellabridge. 

Intellabridge originated as a peer-to-peer lending platform that used blockchain technology to send funds. It graduated from the Boomtown Accelerator and went public on the Canadian Stock Exchange in 2018 when it received a capital injection from a venture-capital firm in Vancouver. 

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At that time, the company was building its own blockchain infrastructure from scratch. After going public, Eagleton said, Intellabridge decided instead to adopt the Terra decentralized financial infrastructure and blockchain protocol and pivot to the idea that became its app, Kash.

Kash’s alpha version launched in March, followed by a private beta in June that has attracted more than 10,000 customers. The full product is expected to go live at the end of September, Eagleton said. 

Like any traditional banking service, Kash offers checking, savings and investment accounts. It offers debit and credit cards. The difference is that Kash accounts operate using Terra. Terra offers numerous stablecoins, or cryptocurrencies that are directly linked to an asset such as a fiat currency.

Users can hold both fiat currency and stablecoins in their Kash checking accounts. 

Through Terra’s protocols, these stablecoins allow users to earn far higher interest than they would from a bank. Terra operates using proof-of-stake. That is, users can stake their currency, putting it to work validating transactions on the blockchain. Users who do this are rewarded with more currency. This is how Kash customers will generate interest. Eagleton said that Kash’s interest rate is around 12% right now. It won’t always be that high, he said, but it still will remain orders of magnitude greater than what banks offer.

Kash also plans to offer Terra-based CDs for businesses that will generate 10% interest on average, a product that is slated to launch in the fourth quarter of 2021. 

Kash customers will be able to use their coins as collateral for a loan, as well as invest in tokenized versions of traditional financial assets and commodities such as stocks, bonds, funds and precious metals.

“That’s especially interesting in emerging market countries where opening brokerage accounts and investing in U.S. companies can be really hard and complicated,” Eagleton said.

Indeed, Kash aims to mitigate the worst aspects of traditional banking in both emerging and developed markets. In addition to the difficulty customers in emerging markets face in investing in U.S. companies, those markets also tend to have much higher inflation. In developed markets, interest rates tend to be very low. Because cryptocurrencies are resistant to inflation and because Terra enables such high interest rates, Kash may just strike that balance.

“This is not traditional borrowers and lenders with banks controlling the markets,” Eagleton said. 

The big similarity between Kash and legacy banks is the user experience. That is intentional. Eagleton said that one of the goals of Kash is that it is easier and more convenient for users than it would be to decentralize their finances on their own. Theoretically, individuals could do on their own all of the services that Kash offers — purchase stablecoins, stake them, use them as collateral — but that would entail operating numerous accounts on numerous exchanges, making transfers that would likely not be instantaneous and being responsible for their own security. Kash handles all of that for its users.

Intellabridge is continuing to iterate on Kash as it nears its launch date at the end of September. The company raised $10 million CAD in July, funds it will put toward product development and marketing for launch. Eagleton said Intellabridge is working to add instant transfers to and from checking accounts and greater security such as multi-factor authentication.

Eagleton is hoping that decentralized finance will be so easy, seamless and convenient that users won’t even realize they’re using it. He compared it to the internet protocol suite TCP/IP as something that is so simple and effective that it became ubiquitous without most of its users even knowing.   

 “This will be a cheaper, better, faster banking experience,” Eagleton said. “Basically, just a better bank. Just as neobanking disrupted the market, decentralized finance banking will also be disruptive.”

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