The acceptance of cryptoassets continues to increase as more users shift to this field amid rising inflation, broader macroeconomic pressures, and a desire to better control their finances, not to mention the fear of missing out on its potential.
Amid this change, how will traditional financial institutions like banks position themselves? BeInCrypto consulted several experts to explore the future of these institutions in this changing space.
The Future of Banks and Cryptocurrencies: Conflict or Cooperation?
Fabian Dori, Investment Director at digital asset bank Sygnum, told BeInCrypto that there is a certain competition between banks and cryptoassets. However, more importantly, there is a convergence between these two fields.
He explained that institutional interest in cryptoassets has increased significantly. This is demonstrated by the exponential increase in the number of companies accepting BTC and ETH as primary reserve assets, as BeInCrypto has reported.
Therefore, Dori emphasized that banks are recognizing the investment hypothesis of cryptoassets and the operational benefits of technology, such as real-time payments and transparency. Meanwhile, crypto platforms are adopting compliance and risk management frameworks similar to TradFi.
Although the market is unpredictable, increasingly more institutions are now viewing digital assets not as a side project, but as 'something they need to work with'.
"At Sygnum, the conversation has also changed. There is increasingly less talk about whether cryptocurrencies have a role, and increasingly more about how to incorporate them without disrupting everything else. What was once a separate world – cryptoassets, stablecoins, and decentralized technology – is now gradually emerging in traditional finance," the executive commented.
Shawn Young, Head of Research at MEXC Research, also agreed. He added that with the increasing acceptance of cryptoassets, banks are reassessing their role as intermediaries.
"By 2025, banks and cryptocurrencies are moving towards convergence rather than conflict. We have seen clear evidence that banks no longer view blockchain as an enemy, but as the next financial infrastructure layer. The only way to maintain relevance — and survive — is through cooperation," Young noted.
However, Bitget CEO Gracy Chen emphasized that we are not heading towards a simple conflict or pure cooperation between banks and cryptoassets. Instead, she sees it as a process of absorption and containment.
She noted that cryptocurrencies were originally designed to oppose banks, stemming from the cypherpunk ideal, distrust of centralized power, and resistance to fiat monetary policy. Bitcoin, for instance, emerged after the 2008 banking crisis for a reason.
Chen added that this spirit still exists, especially in DeFi, privacy coins, and Bitcoin maximalist communities.
"Most capital in cryptocurrencies now flows through gateways linked to banks, custodial institutions, and increasingly regulated stablecoins. Organizations do not want an existential battle with cryptocurrencies. They want to domesticate it, package it, and extract fees from it—just like they did with ETFs and derivatives," Chen told BeInCrypto.
After Stablecoins: What's Next for Banks?
Notably, banks are very aware of the competition they face from the crypto industry. This is perhaps why major US banks are exploring potential stablecoin projects, not just in the US but also in countries like South Korea.
These efforts are increasing in a context of significant legal environment changes. Amid a crypto-friendly president and pro-crypto bills, this space is being set up for potential growth, and banks do not want to be left behind.
Dori also predicts that banks will go far beyond stablecoins. He outlined that they might expand their services to include crypto securities, profit-generating staking products, custody solutions, and even launch their own Layer 2 networks designed for compliance-sensitive applications.
"The value proposition is clear: programmable money and cryptoassets enable faster payments, real-time fund management, and new revenue streams from sequencer fees or collateral asset services. In parallel, the first banks are also beginning to explore native crypto lending markets, using cryptoassets as collateral for loans and integrating decentralized infrastructure while maintaining regulatory control," he stated.
Chen noted that additional services could include staking-as-a-service for institutions, crypto index funds, and synthetic assets. She emphasized that offering more native crypto services is not only rational but a necessary strategy for banks to maintain relevance and protect their business models in the future.
"The boundary between banks and crypto infrastructure providers will blur—especially as crypto finance matures. The future of banking will not be about providing cryptocurrencies as a product but about building cryptocurrencies as a layer of the financial system," the Bitget CEO revealed to BeInCrypto.
Meanwhile, Anthony Georgiades, Founder and General Partner at Innovating Capital, told BeInCrypto that banks are clearly moving beyond basic contact and beginning to build a range of crypto-related services.
"Many banks are now seeking to provide more, from safely storing digital assets to enabling cryptocurrency payments and faster international transfers through blockchain. Some are adding investment options like crypto ETFs or research tools for high-net-worth clients. A few are even experimenting with crypto-based lending or staking rewards. Others are considering asset tokenization, turning things like real estate or stocks into digital investments."
Moreover, the MEXC Research analyst points out that banks may develop into hybrid financial institutions in the next phase. They could offer managed crypto trading, real-time blockchain payments, and tokenized securities custody.
"The race is on for banks to build a compliant and trust-based bridge between TradFi and native crypto ecosystems," Young stated.
Are Banks Ready to Compete in the Crypto Market?
Banks may have the will to exist in the changing market, but do they have the infrastructure? Actually, no.
"Banks will not be able to rely on the systems they have used for decades. Working with blockchain means handling wallets, smart contracts, and on-chain data in real-time. This requires a different toolkit, and often different partners," the CIO of Sygnum announced to BeInCrypto.
Dori points out that compliance is another significant challenge. Everything from KYC to private key management needs to be rethought from a regulatory perspective. He notes that it's not simply about plugging crypto into an old product. It changes how value moves and how control must be structured.
"But the biggest change is mindset. This is not just a new asset class. It comes with new rules, new behaviors, and a different pace. Organizations that do well will be those that are always curious, ask the right questions, and build teams that understand both risks and potential," Dori shared.
However, he details that the biggest challenge for banks is organizational knowledge readiness, not technology. Old systems, high compliance standards, and the need for decentralized, 24/7 financial channels pose obstacles. Trusted partners, regulatory clarity, and familiar infrastructure are key to overcoming these challenges.
Moreover, Georgiades emphasizes the importance of compliance across different regions.
"They must ensure they comply with regulations in every market they operate — especially around anti-money laundering, customer identification, and digital asset rules. Then there's technology: they'll need secure systems that can handle crypto custody and fast, reliable money transfers. It's also crucial to bring in people who truly understand crypto and train current teams on how these services work. Being transparent with customers about risks and opportunities is key," he conveyed.
Additionally, Chen mentions that banks will need to understand MiCA in the EU, VARA in UAE, and SFC guidelines in Hong Kong. They must also be able to segment operations by region and regulatory scope. Complying with Travel Rule, KYC, AML, and counter-terrorism financing requirements for crypto transactions is also essential.
"Most importantly, they will need to increasingly invest in new infrastructure like institutional custody solutions, blockchain node access, and scalable APIs to support tokenization. The biggest challenge will be legacy infrastructure and technical debt. Most core banking systems are not designed to handle real-time payments, on-chain transactions, or tokenized balances. Adjusting them is expensive, slow, and risky," she observed.
Chen also spoke about the concept of 'strategic paralysis,' a common challenge for traditional financial institutions when trying to adopt new innovations.
Without support from the highest levels of the organization, innovation often stalls, and projects remain in the "exploration" stage without budget, mandate, or urgency to move forward.
"Internal bank teams must have deep blockchain knowledge, which means opening doors to crypto talents to support specialized crypto units. Ultimately, one of the biggest challenges for banks is to have a strategy for collaborating with crypto exchanges, wallet providers, and compliance companies," Young contributed.
Traditional Banks and Native Crypto Companies: A New Competitive Era
As many banks enter this field, it's clear they will capture a market share. However, the size of that share remains uncertain.
One thing is certain: their presence will increase competition. Experts also agree that this transformation will elevate standards.
"It will change things somewhat. Large banks bring scale, trustworthiness, and deep customer relationships, which means they have the ability to attract users who haven't felt comfortable with crypto so far. However, although it may seem like bad news for native crypto companies, many banks will need help with infrastructure, compliance, and technology, so these crypto companies are well-positioned to provide the necessary solutions," Innovating Capital's founder, Georgiades, expressed to BeInCrypto.
Chen explains that banks bring scale, regulatory clarity, and access to capital markets in tokenized assets and stablecoins, which will reduce profit margins for fintech issuers and RWA platforms.
However, she believes native crypto companies still have advantages in permissionless DeFi, protocol development, and Web3 integration.
"This is where the difference must occur—through innovation, community governance, and building programmable financial tools that banks cannot copy," she declared.
Dori also agrees with a similar view. He explains that:
"There is still a fundamental advantage that original crypto companies hold: speed, culture, and the ability to quickly provide user-focused products. We are likely to see differentiation. Some crypto companies will collaborate with banks or become regulated organizations, while others will focus on open, unlicensed innovation."
The executive emphasized that this is ultimately beneficial. Crypto always develops through continuous competition and improvement. As more organizations enter this field, the market will progress, but innovators who focus on user experience and technology will maintain their leading position.
