The future of banking might not be from a bank, at least not if Hightop has its say.
Formerly known as Genesis Block before a mid-March rebrand, Hightop is a Utah-based fintech company. Or “a DeFi mullet,” as CMO Rachel Hofstetter says. “Fintech in the front, DeFi in the back.”
Hightop offers “bank-like services" powered by cryptocurrency, and describes itself as “a true bank replacement,” giving users options for direct deposit, checks, ATM access, and debit cards. They are even planning to launch the option to take out loans using cryptocurrency as collateral at some point later this year.
At its core, DeFi is meant to be decentralized, separate from traditional banking processes. DeFi purists keep their currency in hardware wallets, without the service of any bank or financial services provider behind any deposits, purchases, and transactions. Hightop, however, toes the line between being decentralized and bringing more people into the DeFi space with easy-to-understand apps and some of the more convenient and even necessary aspects of traditional finance in today’s world.
Finance is a spectrum, Hofstetter says. On one end is a traditional bank and on the other end is peer-to-peer transactions with no one in between. She says Hightop is closer to the decentralized end of the spectrum, but not all the way to one end.
“It’s probably not a good idea that everybody in the world become their own bank, that everybody in the world has to learn how to store private keys, how to securely hold crypto,” CEO Mick Hagen says. “Things go wrong all the time. If you forget or you lose your seed phrase, or you get hacked, if there’s some sort of malicious malware on your computer—a lot of things can go wrong. I don’t think it’s a good idea to try to force, or convince, or get everybody to become their own bank.”
Funds deposited into Hightop cash accounts are covered by the FDIC standard deposit insurance amount of $250,000 through Evolve Bank & Trust though crypto deposits and Hightop’s growth account are not affiliated with Evolve Bank & Trust and are not FDIC insured. And Hightop promotes a possible eight percent interest rate on its growth account, as well as one percent back in Bitcoin-back rewards with the company’s standard debit card.
The company currently has a waitlist and has only let in about 400 accredited investors. Their aim is to focus on support and service as well as compliance and regulation before they let in the masses. “We plan to be your financial service you’re using 20 years from now,” Hofstetter says—and that means setting things up right from the get-go.
Hence the name change. Genesis Block, originally named for the first block in a blockchain, is now Hightop, which Hofstetter hopes will be a name more people are comfortable with, that still feels “fresh and new” years down the line, and “stands the test of time.”
With the new name and branding settled, creating a company that stands the test of time in the cryptocurrency world is going to be a race against the multitude of other companies popping up every day, as well as the traditional banking industry, which is likely to more readily adopting crypto technology in the near future, Hagen says.
In November Yahoo Finance reported that crypto talent-hiring by major financial services rose 40 percent in the first half of 2021 compared to the year prior, with heavy hitters JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, and Bank of America leading the way. Positions ranged from sales to engineers for bank blockchain platforms, according to Yahoo.
“Who knows how they’ll be able to launch some of these services, but I think they are realizing that this is not going away. A lot of their younger clients are asking about this, they care about this, and so if they want to compete in the world of banking and financial services, they’re absolutely going to need to get with the program,” Hagen says. “They will, but who knows how quickly they will? Depending on how long it takes them, people like us might just kind of quickly pass them by.”
Hagen says he’s gone through the startup and acquisition process before. His first venture-backed startup was Zinch, an education company that was acquired by Chegg in 2011. That’s not what he’s looking to do here, he says, adding that this is something he sees himself working on for the rest of his life. In his mind, he wants to create “the type of company that we all want to be working on.”
Currently, the company has more than 35 full-time employees, the majority of which are in Utah And they donate 10 percent of their revenue to charity. “At the core of this is, I believe. Technology that can make an incredibly positive impact on the world,” Hagen says. “I think it has the opportunity to level the playing field, give access, give tools and services, and investment opportunities to people who just didn’t have access to them before, whether it was because they didn’t know the right people, they didn’t have a certain net worth, they were born in the wrong country.
“All this technology can give people incredible opportunities.”