For crypto to truly break into the mainstream, the banking system must become a full, active participant. While the decentralized ethos of crypto often stands in stark contrast to the centralized nature of banking, this very dichotomy highlights why their integration is not just beneficial but essential for widespread adoption.
Banks bring unparalleled advantages to the table that crypto sorely needs. They're experts in building customer relationships with everyone, the massive reach of their digital & physical network, and an institutionalized familiarity in navigating complex regulatory environments.
Moreover, banks want to be players in crypto, but they couldn't make their yearnings public. For over a decade, banks have consistently shown a strong interest in entering the crypto market with their continuous experiments, but have been blocked by aggressively hostile regulatory pressures. Regulators were so hostile, in fact, that banks raced to publicize their skepticism for crypto in an attempt at appeasement.
But the easing of regulatory pressure could finally allow banks to go all in, publicly, and with it, the beginning of crypto mainstream adoption.
Banks’ Actions Speak Louder Than Words
Despite their public reservations, banks have been consistently exploring and investing in blockchain and crypto technologies throughout the past decade. In 2015, 25 major banks, including JPMorgan and Goldman Sachs, partnered with R3 to develop distributed ledger technologies. By 2019, PNC Bank became the first U.S. bank to process cross-border payments using RippleNet, highlighting the practical applications banks found in blockchain solutions.
Even as Jamie Dimon, the poster child of the anti-crypto banker, constantly casts doubt on the legitimacy and longevity of crypto, the bank he leads keeps doubling, tripling down on crypto technologies. By 2019, JPMorgan expanded its blockchain-based Interbank Information Network to over 340 banks, facilitating real-time payment information exchange. During the same year, JPMorgan even went as far as introducing the JPM Coin, a dollar-backed digital token designed to facilitate instantaneous payments between institutional clients. By October 2023, JPM Coin was handling approximately $1 billion in transactions daily.
Dodging Mounting Regulatory Hostility
Why then, as the banks invest heavily in crypto, do they simultaneously and very publicly advocate against it? It's simple, they're trying to minimize regulatory fallout.
Regulators during the past decade, especially those in the US, had waged an aggressive campaign against the crypto industry. As early as 2015, we have banking regulator FinCEN slapping Ripple Labs with a $700k fine for willfully violating the Bank Secrecy Act by acting as a money services business without proper registration. By 2019, FinCEN issued an advisory highlighting the illicit use of convertible virtual currencies (CVCs) for money laundering and other financial crimes, urging banks to enhance their monitoring and reporting of suspicious activities related to CVCs. By 2022, the much bigger banking regulator FDIC, stepped in, requiring banks to notify the agency before engaging in any crypto-related activities.
During 2023's banking crisis, triggered by the Fed's rapidly rising interest rates, the risk of crypto was again singled out by regulators and politicians, which led to the rapid demise of well-known crypto-friendly banks. By January 2023, the Federal Reserve, FDIC, and OCC issued a joint statement highlighting the risks associated with crypto-assets, emphasizing concerns over fraud, legal uncertainties, and volatility. When the three primary banking regulators issued such a specific warning, the message was received loud and clear. Crypto-friendly banks such as Silvergate, Signature, and Silicon Valley Bank (to a lesser extent) were subsequently singled out by the media and politicians such as Elizabeth Warren, leading to their rapid demise.
With this kind of regulatory hostility, is it any wonder that banks are rushing to make very public, very anti-crypto statements?
Softening Regulatory Environment Lifts all Boats
With a new, clearly crypto-friendly administration in 2025, banks are finally free to say the thing that they've been actively doing for over a decade: crypto is IN.
In rapid succession, every major banking regulator in the US softened their tone on crypto in 2025. The FDIC rescinded previous guidance that required prior notification for crypto-related activities, streamlining the process for banks to engage with digital assets. The OCC clarified that national banks could provide crypto-asset custody and execution services, allowing them to buy and sell assets held in custody at the customer’s direction. Finally, the Federal Reserve Board announced the withdrawal of guidance for banks related to their crypto-asset and dollar token activities, aligning with the OCC and FDIC’s updated stances.
Today, banks are finally publicly voicing their support for crypto, epitomized by JPMorgan Chase CEO Jamie Dimon’s decision to allow Bitcoin trading for clients. With all of the banking system's resources, we may see the golden age of mainstream crypto adoption finally kick off in earnest, starting in 2025.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
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