The technological breakthroughs to come to market in the last 20 years have shaped consumer habits and driven online commerce and services to a point where the vast majority of people now regularly use mobile devices to make purchases and carry out day-to-day tasks.
Bitcoin’s launch in 2009 sparked the cryptocurrency revolution, and recent political backing has seen values soar. Greater acceptance among a variety of industries has followed, with crypto trading platforms also giving consumers a way to play the markets and earn money.
The decentralized nature of cryptocurrencies has seen them work outside traditional financial institutions, but this trend appears to be shifting as banks look to crypto markets in 2025.
Newly Instated Regulatory Framework
As a relatively new alternative to traditional currencies, crypto regulations differ by country or region, and this has put a lot of financial institutions off investments and integration. However, the US has made big strides in recent months under the new administration, with plans to position the country as a global crypto hub.
The Genius Act was signed in July of this year and established a framework to facilitate stablecoin growth. The act has set transparency and reserve standards, providing the clarity required by banks to integrate digital currencies into existing services. The EU already has the MiCA regulation, which provides similar standards that facilitate bank integration.
New Revenue Stream
Banks are businesses, and as with any other business, they must move with new consumer trends or risk suffering as a consequence. The shift towards decentralized currencies makes sense from a consumer point of view, with improved security, transaction speed, international access, and lower fees. Greater control over finances, the ability to carry out peer-to-peer transactions, is something that will worry traditional financial institutions, as this could see a further shift away from traditional products.
Banks being able to offer crypto services will help banks to create more revenue streams through issuance and custody, and some of the biggest banks are even considering the possibility of lending, staking, and trading services tied to crypto and stablecoins in particular.
Improved Operational Efficiency
The efficiency of cryptocurrencies and the blockchain technology they use is something that banks can’t ignore if they are to provide customers with the best service available. Transaction speed is something that traditional banking systems can’t compete with, and massive institutions like JPMorgan offer stablecoin platforms that facilitate billions in daily transfers.
As more corporations look to crypto as a way of improving supply chain transparency and transactional security, banks are being forced into exploring their potential.
Competitive Pressure
Competitive pressure drives markets and development, and the integration of crypto services among banks is something that all will be considering if they haven’t already begun the process. Failure to keep up with shifting trends and market needs can be detrimental to any organisation, and the banking industry has already suffered from significant issues in recent years.
Blackberry’s failure to modernize is an excellent example of how a market leader can quickly drop out of a competitive market. At its peak, Blackberry smartphone devices accounted for 45% of the global market.
Its failure to identify the threat from Apple and its iPhone product saw the company having to explore ways to reduce costs. This resulted in defective products and lawsuits from mobile networks impacted by losses.
Banks will be all too aware of shifting trends in recent years, with many pushing digital banking as a way of reducing overheads associated with high street branches. The majority of transactions and services can now be carried out online via dedicated banking apps, and cryptocurrencies were designed to streamline these transactions.
As more industries explore the benefits of blockchain technology and how it can be implemented to improve transparency and security, banks that fail to capitalize will fall behind their competitors.
Infrastructure Expansion
Crypto can help banks’ infrastructure expansion by providing technological upgrades and acting as a new product. Custody infrastructure will see banks building custody platforms to hold crypto assets, before handling other investment opportunities like the tokenization of bonds and real-world assets.
Banks will also be able to integrate blockchain settlement layers to facilitate instant settlement, which will streamline processes and reduce operational costs. Tokenization platforms will also be used to issue, trade, and settle assets, speeding up the time these transaction takes, reducing risk, and allowing high transaction volumes.
Cultural Shift
Bob Dylan once sang “the times they are a-changing”, and this could be applied to the financial industry today as new technologies and market trends dictate how banks must adapt in order to survive. Political change in the US saw President Trump return to the White House, and despite the unquestionable controversies this has brought to light, his support of cryptocurrencies has been a major boost to the industry.
By committing to regulatory change, the crypto industry in the US is in a much stronger position, and more industries, businesses, and consumers are likely to explore using it thanks to the protections in place. While there is no guarantee that the high values of cryptocurrencies like Bitcoin will remain, it does prove the potential for investors, and greater adoption rates will help with stability.
Conclusion
Cryptocurrencies are in a strong position in 2025, and banks look set to capitalize on this by integrating it into current services and scaling services to provide an improved customer experience.
See Also:
What is the GENIUS Act? Banks and Fintechs Rush Towards Stablecoins | Disruption Banking
How Standard Chartered Became a Leader in Digital Assets | Disruption Banking
