Traditional banks are increasingly integrating cryptocurrencies into their services, marking a significant shift from previous skepticism. This trend is evident across various regions, with banks adopting digital assets to meet evolving customer demands and technological advancements.
In the United States, JPMorgan Chase has transitioned from a critical stance on Bitcoin to offering clients access to the cryptocurrency. The bank’s Onyx digital assets unit now facilitates $1 billion in daily transactions using its JPM Coin, a blockchain-based token for institutional payments. Similarly, Citigroup is exploring blockchain applications to enhance cross-border payment systems.
EU and UK
European banks are also entering the crypto space. France’s Societe Generale plans to launch a dollar-pegged stablecoin, USD CoinVertible, through its crypto subsidiary SG-FORGE. This stablecoin will operate on Ethereum and Solana blockchains, with BNY Mellon acting as the custodian for its reserves. In Italy, Intesa Sanpaolo has initiated Bitcoin trading, while Spain’s Santander is considering offering a stablecoin and broader cryptocurrency access to its digital banking customers.
UBS has also piloted its Digital Cash system, a blockchain-based solution for institutional clients enabling instant, cross-border settlements in multiple currencies, including USD, EUR, and CNY. HSBC, in partnership with Ant International, completed 24/7 blockchain-based HKD transactions under Hong Kong’s Project Ensemble, aiming to enhance cross-border liquidity and corporate treasury efficiency
Asian countries
In Asia, the Philippines’ UnionBank has been proactive in adopting cryptocurrency. It launched its own stablecoin, PHX, in 2019 to facilitate remittances and payments, and has since introduced crypto ATMs and plans for crypto trading and custodial services. In India, several banks, including State Bank of India and HDFC Bank, are participating in the Reserve Bank of India’s digital rupee pilot project, integrating it with existing payment.
Challenges and regulation
Despite these advancements, regulatory concerns persist. European Central Bank has warned that banks’ involvement in crypto-asset services could pose reputational risks and potentially harm customer confidence in the banking system. The institution’s policemakers emphasized the need for close monitoring and appropriate regulation to mitigate these risks.
Traditional banks worldwide are increasingly embracing cryptocurrencies, driven by customer demand and technological innovation. While this integration offers new opportunities, it also necessitates careful regulatory oversight to ensure financial stability and consumer protection.