Can Commercial Banks Adopt Crypto? Here is the Full Take

Can commercial banks adopt crypto? Banks are slowly warming up to the idea of crypto adoption. The big question now is not whether banks can work with crypto, but whether they should, and what the future might look like if they do.

Let’s explore how cryptocurrency is reshaping the financial system, how banks are responding, and whether commercial banks will embrace crypto for good.

Cryptocurrency Effects on Banks

Cryptocurrency, particularly through the use of blockchain technology, has introduced a new way of handling money—without the need for a central intermediary like a bank. This peer-to-peer model challenges the very role that commercial banks have traditionally played.

One major example is in cross-border payments. International transfers via banks can take days and involve high fees due to intermediary banks and currency conversions. On the other hand, stablecoins like USDC or USDT allow near-instant settlements with minimal cost, available 24/7. 

This capability highlights how crypto combines the speed of blockchain with the price stability of fiat currency, offering a practical alternative to legacy systems like SWIFT.

In lending, decentralized finance (DeFi) platforms have begun automating credit and loan services. 

Although still early in development and mostly over-collateralized, DeFi could one day replace parts of traditional lending with lower-cost, data-driven alternatives based on digital identity and on-chain reputation systems. This poses both a challenge and an opportunity for banks to rethink how they offer credit.

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What Do Banks Think About Cryptocurrencies?

The banking sector’s views on cryptocurrency have shifted significantly. What was once seen as a threat is now viewed as a potential opportunity.

Consider JPMorgan Chase. In 2017, its CEO famously dismissed Bitcoin as a “fraud.” Yet today, the same institution offers crypto ETFs, manages digital asset services, and holds a substantial stake in crypto-related companies. 

This change reflects the evolving market and regulatory conditions that are slowly reshaping how banks perceive digital currencies. Several factors influence banks’ current stance on crypto:

• Regulatory clarity: With frameworks like the EU’s MiCA regulation and the SEC's approval of crypto ETFs, traditional banks feel more secure entering the crypto space.

• Customer demand: Retail and institutional clients are increasingly interested in crypto exposure. Many expect banks to facilitate crypto transactions or offer digital asset services.

Banks’ Response to Cryptocurrencies

Banks have responded to cryptocurrency in three major ways:

1. Strategic initiatives: Some banks have launched internal projects aimed at modernizing their systems through blockchain. This includes JPMorgan’s Onyx platform and DBS Bank’s digital exchange in Singapore.

2. Partnerships with fintech companies: Many banks are collaborating with crypto-native firms through joint ventures, technology-sharing, and service integrations. This approach helps banks explore crypto without taking on the full technological burden themselves.

3. Digital currency involvement: Banks are engaging in the development of central bank digital currencies (CBDCs) and stablecoins. These digital currencies allow banks to remain relevant in a blockchain-driven ecosystem while operating within regulatory frameworks.

Banks like Goldman Sachs, Fidelity, and Mercury are already offering crypto-related services, including custody, trading, and even support for startups in the crypto space. Even neobanks like Revolut now offer users the ability to buy, sell, and hold crypto assets within their apps.

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Future Prediction: Can Commercial Banks Adopt Crypto?

The short answer is yes, but the real question is how. Rather than a complete switch, banks are likely to integrate crypto services into their existing systems. 

We are already seeing the emergence of hybrid financial models where customers can:

• Hold crypto and fiat in the same account

• Access crypto-backed loans and yield-generating savings

• Use crypto payment cards for everyday spending

On the institutional side, banks could offer:

• Digital asset custody

• Prime brokerage for crypto

• Instant settlements through stablecoins

These features are already in motion. Fidelity has developed a dedicated digital asset division, while JPMorgan is using blockchain internally for real-time settlements. The future for banks is not to compete with crypto, but to blend traditional financial services with the innovation of digital assets.

Conclusion

The relationship between commercial banks and cryptocurrency has matured from skepticism to cautious adoption. As crypto technology continues to evolve, it is increasingly clear that banks will not be replaced—but they will be transformed. 

Hybrid banking models that merge traditional services with crypto features are not only possible but already in development.

Still, challenges remain. Regulatory uncertainties, volatility, and infrastructure upgrades pose significant hurdles. But these obstacles are not insurmountable. The banks that embrace innovation while maintaining customer trust and compliance standards will shape the next era of finance.

The adoption of crypto by commercial banks is not a distant future—it is happening now, quietly but steadily. Whether they like it or not, banks are stepping into the world of crypto.

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FAQ

Q: Which bank has its own cryptocurrency? 

A: JPMorgan Chase has its own cryptocurrency called JPM Coin, which it uses to help settle payments between its wholesale clients.

Q: Which banks support crypto? 

A: Several banks are considered crypto-friendly, including Wirex, Chase, Monzo, Ally Bank, Revolut, Juno, Mercury, BankProv, Cash App, DBS Bank, Mizuho Bank, Solarisbank, Bank Frick, Customers Bank, Goldman Sachs, Quontic, SBI Sumishin Net Bank, and SEBA.

Q: What big banks are buying crypto? 

A: Major banks and financial institutions like JPMorgan Chase, Bank of Montreal, Barclays, Goldman Sachs, Citibank, BNY Mellon, Morgan Stanley, DBS Bank, BBVA, and Standard Chartered are increasing their involvement in crypto, including buying Bitcoin ETFs and offering crypto services.

Q: Is XRP going to be used by banks? 

A: Currently, only a few institutions are confirmed to be using XRP for payments, and banks are still hesitant due to rules and competition. However, if regulations become clearer and cost savings are proven, XRP adoption could increase. The Bank of Japan has recently adopted XRP for cross-border payments.

Q: Which crypto is adopted by banks? 

A: Ripple (XRP) is a cryptocurrency designed for fast, cross-border payments, making it a cheaper option for banks and financial institutions compared to traditional systems. JPMorgan also uses its own digital currency, JPM Coin, for wholesale payments.