The fees come from fulfilling legal requirements like detection of money laundering and terrorism financing, and also customer security features like fraud detection and multi-factor authentication.
There are fintechs for customers who want lower fees and don't need e.g. physical branches or phone support. That's perfectly fine.
But a fintech that didn't perform KYC would be shut down pretty quickly by the police, so there's a floor on how low fees can be while remaining legal.
> more competitive because of government regulation
That's the same as "not legal".
But I agree that it's still a useful technology, because the moral argument sometimes trumps the legal one. If a north korean defector uses Bitcoin to exfiltrate their life savings, I don't think anybody will complain how it was technically illegal under North Korea's law.
There are fintechs for customers who want lower fees and don't need e.g. physical branches or phone support. That's perfectly fine.
But a fintech that didn't perform KYC would be shut down pretty quickly by the police, so there's a floor on how low fees can be while remaining legal.