Experts Debate Future of Banks and Crypto: Collaboration Hinges on Regulation and Infrastructure
Introduction: The Evolving Relationship Between Banks and Crypto
The financial landscape is undergoing a seismic shift as cryptocurrency adoption continues to rise. Driven by inflation, macroeconomic pressures, and a growing desire for financial autonomy, more users are turning to digital assets. Amid this transformation, traditional banks face a critical question: adapt or risk obsolescence.
Industry experts suggest that the future of banking and crypto is not one of outright conflict but of strategic convergence. While early crypto was rooted in anti-bank sentiment—epitomized by Bitcoin’s emergence after the 2008 financial crisis—today’s reality is more nuanced. Banks are increasingly exploring blockchain technology, stablecoins, and tokenized assets, while crypto firms adopt compliance frameworks reminiscent of traditional finance (TradFi).
This article examines expert insights on how banks and crypto can coexist, the regulatory and infrastructural challenges ahead, and what this means for the broader financial ecosystem.
Conflict or Collaboration? The Shifting Dynamics Between Banks and Crypto
Fabian Dori, Chief Investment Officer at digital asset bank Sygnum, highlights that while competition exists between banks and crypto, the dominant trend is convergence. Institutional interest in cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) has surged, with firms adopting them as reserve assets.
Dori notes that banks now recognize crypto’s operational benefits—real-time settlement, transparency, and efficiency—while crypto platforms integrate TradFi-style compliance. The conversation has shifted from whether crypto has a role in finance to how it can be integrated without disrupting existing systems.
Shawn Young, Chief Analyst at MEXC Research, agrees, stating:
“Banks no longer view blockchain as the enemy but as the next layer of financial infrastructure. The only way to stay relevant—and survive—is through collaboration.”
However, Bitget CEO Gracy Chen offers a different perspective:
“Early crypto was inherently anti-bank… but most capital now flows through bank-linked on-ramps, custodians, and regulated stablecoins. Institutions don’t want an existential war with crypto; they want to tame it, package it, and extract fees from it.”
This tension between absorption and innovation defines the current relationship between banks and crypto.
Beyond Stablecoins: How Banks Are Expanding into Crypto Services
Stablecoins have been a primary entry point for banks into crypto, with major institutions exploring their issuance. However, experts predict banks will go much further:
- Tokenized Securities: Representing real-world assets (RWAs) like bonds or real estate on blockchain.
- Staking & Yield Products: Offering institutional-grade staking-as-a-service.
- Crypto Custody Solutions: Secure storage for digital assets.
- Layer 2 (L2) Networks: Compliance-focused blockchain layers for faster settlements.
Anthony Georgiades of Innovating Capital adds:
“Many banks now look to offer much more—from storing digital assets securely to enabling crypto payments and faster international transfers through blockchain.”
Chen emphasizes that banks must evolve beyond offering crypto as a standalone product:
“The future of banking won’t be about offering crypto as a product but building crypto as a layer of the financial system.”
Are Banks Ready? The Infrastructure and Regulatory Challenges
Despite their interest, banks face significant hurdles in adopting crypto:
1. Legacy Systems vs. Blockchain Infrastructure
Dori explains:
“Working with blockchains means handling wallets, smart contracts, and on-chain data in real time… Compliance from KYC to private key management needs rethinking.”
2. Regulatory Fragmentation
Banks must navigate varying frameworks like:
- MiCA (EU) – Comprehensive crypto regulations.
- VARA (UAE) – Strict licensing requirements.
- SFC (Hong Kong) – Licensing for virtual asset services.
Chen warns of “strategic paralysis,” where banks struggle to move beyond exploratory phases due to internal resistance or lack of expertise.
3. Talent & Cultural Shifts
Young notes:
“Banks must open their doors to crypto talent… Partnerships with exchanges and compliance firms will be crucial.”
Traditional Banks vs. Crypto-Native Firms: A New Competitive Era
As banks enter the space, competition will intensify—but experts believe both sectors can thrive by playing to their strengths:
Banks Bring:
- Trust & regulatory compliance.
- Deep customer relationships.
- Access to capital markets (e.g., tokenized RWAs).
Crypto Firms Retain Advantages In:
- Permissionless DeFi innovation.
- Faster product development cycles.
- Web3 integrations (e.g., smart contracts).
Georgiades predicts:
“Big banks will attract users new to crypto… but many will need help from crypto-native firms for infrastructure solutions.”
Dori adds:
“Crypto-native firms hold an edge in speed and user-focused innovation… Some will partner with banks; others will double down on open protocols.”
Conclusion: What’s Next for Banks & Crypto?
The future of banking and crypto hinges on three key factors:
- Regulatory Clarity – Clear rules will accelerate institutional adoption.
- Infrastructure Upgrades – Banks must modernize legacy systems for blockchain compatibility.
- Strategic Partnerships – Collaboration between TradFi and DeFi will drive hybrid financial models.
For readers watching this space, key developments to monitor include:
- Bank-issued stablecoins & tokenization pilots.
- Regulatory updates (MiCA enforcement in 2024).
- Institutional-grade custody solutions from both banks & crypto firms.
While competition is inevitable, the ultimate winner may be the financial system itself—evolving toward greater efficiency, transparency, and accessibility through blockchain integration.