US Merging Traditional Bank and Crypto

White House Advisor David Sacks predicts the imminent merger of traditional banking and the crypto sector into a unified digital asset industry. Speaking at the World Economic Forum in Davos on January 21, 2026, Sacks emphasized that legislative milestones are erasing the boundaries between these previously separate sectors.

This shift marks a departure from years of regulatory uncertainty, as the US government pivots toward a pro-innovation framework. The goal is to position the United States as the global capital for digital finance by integrating blockchain technology directly into the national banking infrastructure.

Key Takeaways

• David Sacks anticipates traditional banks and crypto firms will merge into a single "digital asset industry" following the passage of comprehensive market structure legislation.
• The 2025 GENIUS Act has already laid the groundwork by regulating payment stablecoins, enabling traditional financial institutions to enter the issuance market.
• A central conflict remains regarding stablecoin yields, with banks and crypto firms debating whether these assets should offer interest to retail users.

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Digital Asset Industry US Combining Traditional Banking with the Crypto Industry

The convergence of these sectors is being driven by a series of legislative actions intended to provide a "two-lane highway" for regulation. Under this emerging model, the SEC focuses on digital investment assets while the CFTC oversees digital commodities, providing a clear map for institutional participants.

David Sacks, who serves as the White House Special Advisor on AI and Crypto, noted that the distinction between a "bank" and a "crypto exchange" is rapidly fading. As banks begin to issue their own stablecoins and offer custody services, they are effectively becoming major players within the crypto ecosystem.

The implementation of the digital asset industry US strategy relies heavily on the proposed CLARITY Act. This bill seeks to define the rules for market infrastructure, though it has faced recent delays in the Senate due to disagreements over the payment of interest on stablecoins.

Banks have expressed concern that yield-bearing stablecoins could lead to a massive flight of capital from traditional low-interest savings accounts. Conversely, crypto-native firms argue that yield is a fundamental component of the digital economy that should not be restricted to benefit legacy institutions.

Despite these hurdles, the US government has already moved forward with initiatives like "Project Crypto." Led by the SEC, this project aims to provide a formal taxonomy for crypto assets, helping businesses understand which regulations apply to their specific digital products.

The "digital asset industry" is not just a theoretical concept but a practical shift in how capital moves. Financial giants like BlackRock and Fidelity have already integrated digital assets into their mainstream offerings, treating them as infrastructure rather than speculative experiments.

Technical interoperability is also a primary focus for 2026. The government is encouraging public-private cooperation to ensure that different blockchain networks can communicate seamlessly with existing traditional financial rails.

Read more: Barclays Invests in Ubyx: First Stablecoin Infrastructure Investment Explained

What is Digital Asset Industry

The digital asset industry refers to a unified financial ecosystem where traditional assets like stocks and bonds are tokenized and traded on the same distributed ledgers as crypto. This integration allows for 24/7 settlement, reduced intermediary costs, and greater transparency for regulators.

By moving toward this model, the US aims to modernize its "digital plumbing." This involves replacing aging settlement systems with blockchain-based solutions that can handle everything from cross-border payments to the issuance of government-backed digital reserves.

Under the leadership of Sacks and the President's Working Group on Digital Assets, the US is transitioning from a policy of "regulation by enforcement" to one of "regulation by guidance." This change is designed to bring developers and capital back to American shores.

The implementation of this industry also includes a focus on "Crypto-as-a-Service" (CaaS). This allows community banks and credit unions to offer digital asset services to their customers without needing to build their own blockchain infrastructure from scratch.

While challenges regarding investor protection and financial stability remain, the momentum toward a combined industry appears irreversible. Analysts expect that by mid-2026, most major US retail banks will offer some form of direct digital asset interaction.

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Conclusion

The emergence of a unified digital asset industry represents the most significant transformation of the US financial system in decades. By merging the security of traditional banking with the efficiency of blockchain, the government seeks to secure long-term economic leadership.

While legislative debates over yields and oversight continue, the strategic direction is clear. The US is moving toward a future where "crypto" is no longer a separate niche but a core component of the broader financial services landscape.

FAQ

What is the primary goal of the US digital asset industry strategy?

The strategy aims to combine traditional banking and crypto into one regulated sector to improve financial efficiency, settle transactions faster, and maintain US leadership in global finance. It seeks to provide clear rules for both banks and crypto-native companies.

Who is David Sacks and what is his role in this transition?

David Sacks is the White House Special Advisor on AI and Crypto, often referred to as the "Crypto Czar." He is responsible for coordinating federal policy and advising the President on how to integrate digital asset technology into the US economy.

How does the GENIUS Act affect traditional banks?

The GENIUS Act, passed in 2025, provides the first federal framework for stablecoins. it allows traditional banks to issue their own payment stablecoins, provided they follow specific capital and reserve requirements set by the OCC and the Federal Reserve.

Why is there a debate about stablecoins paying interest or yield?

Traditional banks fear that if stablecoins offer interest, customers will move money out of standard bank accounts. Crypto firms argue that withholding yield is an anti-competitive measure that protects banks at the expense of innovation and consumer choice.

When will the full digital asset industry framework be completed?

While major laws like the GENIUS Act are already in place, the broader CLARITY Act is still moving through Congress as of early 2026. Experts anticipate that the full regulatory and technical integration will be a multi-year process reaching maturity by 2027.

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