Hi, it’s Marc. ✌️
“If you gave people the choice between full reserve banking and fractional banking, they’d take full reserve banking in a minute.”
The person building it is Scott Shay, who has founded four banks the traditional way, including Signature Bank, and created Signet, the first 24/7 payment system inside a US bank. We sat down live at Proof of Talk in Paris.
His argument is simple: for years the industry has tried to make crypto behave more like a bank. The better trade is making a bank behave more like crypto.
Think about it: Almost every bank in the world works the same way. You deposit money, the bank lends most of it out, and your balance is a promise to pay, settled in batches, often a day later. N3XT does neither. Every deposited dollar sits in short-term Treasuries. Nothing gets lent. The core banking system is a blockchain, so when a client moves a dollar, they move the actual dollar, any hour, any day, in seconds. It’s the first full-reserve “narrow bank” in the US, and it raised $72 million from Paradigm, HACK VC, and Winklevoss Capital to prove the model works.
This one is a playbook, not a podcast: how a bank without lending makes money, why the number of stablecoins will be small, and how on-chain payments would have caught a $2.3 billion fraud.
About Scott Shay: Scott is founder and chairman of N3XT, a full-reserve, blockchain-native bank that launched in December 2025 under a Wyoming SPDI charter. Before that he co-founded Signature Bank in 2001 and chaired it for 22 years as it grew past $110 billion in assets, created Signet, co-founded Ranieri & Co. with Lew Ranieri, and helped found Bank United of Texas and Merrick Bank. He is also the author of In Good Faith: Questioning Religion and Atheism.
“Taking a system like Bitcoin and putting it into a bank was a lot like stapling paper to cardboard.”
Why this matters: The race to put dollars on-chain has two established camps. Stablecoins are a ~$311 billion market, and the GENIUS Act (July 2025) bars issuers from paying interest or lending. Banks are answering with tokenized deposits: JP Morgan’s JPMD is live on Base, and 17 banks including Citi, BofA, and Wells Fargo are building a shared tokenized-deposit network through The Clearing House for H1 2027. Scott’s model is a third option: not a token that represents a dollar, and not a claim on a fractional balance sheet, but a bank where the on-chain balance is the dollar itself.
🎯 Jump to the best parts
00:00 Why Signature Bank Was Shut Down
00:24 Introduction
01:13 Building Signature Bank
02:58 Signet Explained
05:00 What Really Happened During The Banking Crisis
08:37 Why Scott Built NEXT
09:16 Full Reserve Banking Explained
11:20 Can This Banking Model Work?
14:33 Why Traditional Banks Resist Change
17:07 Why Choose NEXT Over JP Morgan?
20:02 Building A Blockchain Native Bank
21:35 Tokenized Dollars Explained
23:01 DeFi Meets Banking
24:27 Stablecoins vs Tokenized Deposits
25:47 What's Next For NEXT?
27:09 Lightning Round
29:05 Why Scott Never Feared Blockchain
29:41 Where To Learn More
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Important Links
LinkedIn: https://www.linkedin.com/in/scott-shay/
N3XT: https://n3xt.io
Scott’s books: https://www.scottshay.com
Watch or listen now: YouTube • Apple Podcasts
🔒 The full breakdown is for PRO subscribers
Our biggest takeaways from this conversation
1. A deposit is a promise to pay. N3XT’s product is removing the promise.
The clearest way to understand N3XT is one distinction. When you hold a bank deposit, you hold an IOU that gets settled in overnight batches. When you hold a dollar at N3XT, the dollar is there, in short-term Treasuries, all of it, all the time. Scott’s point is that this isn’t a technical detail. It’s the actual product.
“Fractional banking started as a three-card Monte sleight of hand.”
“All banks at the bottom are debits and credits and batch processing. ... If you gave people the choice between full reserve banking and fractional banking, they’d take full reserve banking in a minute.”
The design comes from the Bitcoin white paper: transfer the whole asset, not a claim on it. Signet, which Scott built at Signature, moved a promise to pay. N3XT moves the dollar.
No lending means no FDIC, no lender of last resort, and no maturity mismatch, because there is nothing to mismatch. Short-term governments only: no interest rate risk, no credit risk.
Where the revenue comes from: Treasury float and payment fees, B2B only. Clients who want yield lend explicitly, on the platform, knowing exactly what they’re funding, instead of the bank doing it silently with their balance.
What to do with this: For any “digital dollar” product, ask one question: am I holding the asset or a promise to pay? Your counterparty risk follows from the answer.
Related reads:
→ How banks are beating stablecoins
