Historically, banks and cryptocurrencies don’t have the best relationship. A lot of banks decried the launch and increased popularity of the likes of Bitcoin, warning their users away from the disruptive technology. Some even banned customers from using bank accounts and cards to make crypto purchases on well-known exchanges. They likely expected cryptocurrency’s popularity to wane and said as much during these early exchanges.
But, fast forward to today, and banks not only allow users to purchase cryptocurrency again, some even offer custodial services, while the likes of Visa now actively use blockchain, and central banks around the world have started investigating the possibility of launching their own Central Bank Digital Currencies (CBDCs) which rely on blockchain and offer many of the benefits of mainstream cryptocurrencies.
Cryptocurrency’s Popularity
Cryptocurrency’s popularity continues to increase with modern companies offering a variety of services. Users can buy Dogecoin instantly, hold Bitcoin securely, or stake their Ethereum to earn long-term yields. As more and more users have embraced cryptocurrency’s benefits, banks have been forced to change their approach to cryptocurrency.
Banks Banned Bitcoin Buying
The likes of JP Morgan Chase, Bank of America, and Citigroup have all banned their users from buying cryptocurrency using credit cards. Wells Fargo also followed their lead. At the time of the bans, banks cited cryptocurrency’s volatility as the main reason for the ban. They reasoned that buyers using credit to purchase crypto coins put themselves at risk of substantial loss.
If the coin were to lose 10% or 20% or more in a matter of weeks, customers would still need to repay the money borrowed but would no longer have the full capital to do so. Although not a major high street name, Starling Bank in the UK banned users from making crypto purchases using either credit cards or bank accounts.
Fintech Tides Turned
But, the tides have turned, at least to some degree. Last year, while running for President, Donald Trump said he wanted to be the crypto President and that he wanted the US to be the crypto capital of the world. The UK government has said something similar, although with less hyperbola. Regulatory bodies have also been forced to take a proper look and investigate the use of cryptocurrency, rather than simply prohibiting its use.
Banks Bet On Blockchain Benefits
These changing political winds have led to financial institutions also having to change their tack. Where they once denied its benefits and only pointed to its pitfalls, most banks now concede that the underlying technology used to power cryptocurrency, blockchain, is not only practical but potentially very beneficial.
Whereas traditional credit card payments and even bank transfers can take days to complete, costing 3% or more of transactions, cryptocurrency transactions complete within a matter of seconds, at most, and they cost fractions of a cent on the dollar.
Comptroller Of The Currency Caves
Just last month, the US Office of the Comptroller of the Currency announced that banks and other financial institutions are permitted to buy and sell cryptocurrency, as well as hold currencies in custody, for clients. They can also outsource some of these services to third parties, which opens the door to potential deals between major financial institutions and some of the world’s best-known and highly-regarded cryptocurrency companies.
JP Morgan Chase and Citi, who were among the first banks to ban the purchase of cryptos using account-issued credit cards, actively offer these services already. Standard Chartered and other big names are actively exploring the possibility of doing so in the future.
The reason banks are getting so involved is because of sheer numbers. In 2021, around 1 in 8 Americans owned Bitcoin or other cryptocurrencies. In 2025, it is more than a quarter of the population. And, 14% of those who don’t own cryptocurrency are considering buying it. This isn’t just evident in the US – Bitcoin is not the niche product it once was.
Banks Hold Digital Gold
However, while cryptocurrencies are billed as being currencies, even stalwarts of the technology use the likes of Bitcoin differently from how they use dollars. It is difficult, albeit not impossible, to pay rent or mortgage payments using cryptocurrencies. And, while thousands of companies do accept the currencies, it is still difficult to buy everyday items using Bitcoin, Ether, or other coins.
Instead, most users buy and hold cryptocurrency as a form of investment. This means that users need a means of storing their crypto for long periods. With local currency, most people use a savings account or other bank account. However, cryptocurrency is decentralized, and owners typically use a software wallet to store their currency.
Wallets are functional, as well as convenient, but they place all of the onus of security and protection on the user. Custody services take a lot of the risk out of long-term storage. The custody service retains the crypto private keys, effectively securing the crypto for the holder. Services like these are not as practical as using software or hardware wallets.
Users must give notice if they want to withdraw currency or send funds to other wallets. And they do come at a cost, at least when compared to the use of free wallets. But, that banks are offering custody services shows that the financial industry is finally taking cryptocurrency seriously. And, while we haven’t seen a major bank offer its own exchange or brokerage service, yet, it seems likely that it will only be a matter of time before this happens, especially following the OCC ruling.
The March To Mainstream
Cryptocurrency is becoming mainstream. It is a popular form of investment – an alternative to stocks, gold, and other traditional investments. Or as a means of diversifying an investment portfolio to help minimize risk. While banks spent more than a decade decrying the disruptive technology for its volatility and the risks it apparently posed to their customers, they have now seemingly taken the likes of Bitcoin under their wing, even offering custodial services to look after clients’ crypto holdings.
