How it works: … all Jiko deposits immediately get turned into Treasury bills. If you deposit $5 into your account, you buy $5 of Treasury bills; if you put a $4 coffee on your debit card then you sell $4 of Treasury bills to pay for it.
Why it matters: The Jiko model means that the bank itself remains very small. Jiko will use it for direct access to the plumbing of the financial system, but it will never grow big enough to pose any systemic risk. That’s music to regulators’ ears.
… Many customers won’t even know that they’re banking with Jiko… By opening up its APIs, Jiko hopes to attract other financial-services companies to start using its platform.
The bottom line: Jiko has a very stripped-down vision of banking, with no maturity transformation and no credit risk. That’s understandably attractive to regulators.