There are two main differences between custodial and non-custodial: A) Insurance. Which is a feature that can be less relevant when speaking about stablecoins, which are more like MMFs and therefore narrow banks, where the credit transformation risk is far lower. Moreover, it is also a feature that could be added over time thanks to capital markets. B) Compliance responsibility. If you offer self-custody accounts, you don't need to be a financial institution. However, if you want your customers' accounts to talk to traditional rails, you are only shifting the compliance effort to another part of the chain - for example to Bridge or Iron if you are connecting bank accounts, or to acquirers and issuers if you are connecting them with cards. At the end of the day, imo, self-custody will win, simply because it is much easier and faster to build a neobank by outsourcing pieces of compliance to external providers and orchestrating all of them to build the best ux for your customers. It is only a matter of which method is the most effective for building successful fintech businesses.