Member Exclusive

‘There’s a two-sided integration going on between fiat and crypto’: How banks are gearing up to move into digital currencies

  • Many banks are starting to incorporate digital assets into their services.
  • Further adoption will depend on how federal agencies perceive and regulate the large-scale use of cryptocurrencies.
close

Email a Friend

‘There’s a two-sided integration going on between fiat and crypto’: How banks are gearing up to move into digital currencies

Recently, banks in the U.S. have started to dip their toes in the digital asset economy and offer crypto-related services. Examples include the country’s biggest banks such as JPMorgan, Wells Fargo, Morgan Stanley and PNC Bank setting up crypto investment funds for their clients, as well as smaller players like Quontic Bank offering Bitcoin rewards on debit card purchases. 

With the global market cap of cryptocurrencies surpassing $2 trillion, they represent a major opportunity for banks. But perhaps more than just an opportunity to cash in on, crypto may actually become an important strategy for maintaining market share and staying relevant.

Banks are currently witnessing the withdrawal of sizable deposits from their accounts by customers who are making investments in crypto assets. Consumers are moving their funds away from stocks, bonds, and cash held in their banks in order to buy Bitcoin, Ethereum, Cardano, and other major coins on crypto exchanges. 

“Many of the big banks are losing market share to these crypto investments,” said Nathan McCauley, co-founder and CEO of Anchorage Digital, at a session held during Tearsheet’s Convergence Conference 2021. “There’s a loss of business taking place that these banks would like to mitigate over time. This is an important reason why banks want to get involved with digital currencies, so they can regain some of their lost market share.” 

Areas of intersection for traditional finance and crypto

 


This content is available exclusively to Tearsheet Outlier members.

Tearsheet Outlier information and signup Missing out? Subscribe today and you’ll receive unlimited access to all Tearsheet content, original research, exclusive webinars and events, member-only newsletters from Tearsheet editors and reporters and much more. Join Outlier now — only $49/mo. Already an Outlier member? Sign in to your account

0 comments on “‘There’s a two-sided integration going on between fiat and crypto’: How banks are gearing up to move into digital currencies”

Outlier OpinionsMakers

Member Exclusive, Online Lenders

Lending Briefing: Debit cards are taking over

  • This year, debit cards have emerged as the preferred payment method for the majority of US consumers, dethroning credit cards.
  • Younger generations are behind this switch – even though they're also getting credit cards, Millennials and Gen Zers prefer to pay with debit.
Iulia Ciutina | September 28, 2022
Member Exclusive

Why are regulators cracking down on bank-fintech partnerships?

  • A higher level of regulatory scrutiny is on the way for fintechs and the bank partners on which they rely.
  • Increased regulatory scrutiny could result in a safer and more resilient market to the benefit of consumers, says Brian Graham, partner at Klaros Group.
Lindi Miti | September 27, 2022
Innovation, Member Exclusive

Slack and Salesforce launch industry-specific digital solutions – what’s in it for FIs?

  • Slack and Salesforce have built solutions to help their customers make the most of their digital tools.
  • How will these solutions benefit financial firms?
Sara Khairi | September 26, 2022
Data Snacks, Member Exclusive

Data Snack: On messaging and personalization in the financial industry

  • Times have changed and consumers expect more from their FIs. That includes messaging.
  • But when it comes to what messages to send, there’s no one-size-fits-all. That’s where personalization comes in.
Rivka Abramson | September 23, 2022
Member Exclusive, Modern Marketing

Marketing Briefing: The future of NFTs in loyalty programs

  • Starbucks has been getting a lot of attention for its moves surrounding NFTs.
  • Will NFTs find their home in loyalty programs?
Rivka Abramson | September 22, 2022
More Articles