According to external sources, the attitude of traditional financial institutions towards encrypted assets is changing. The former popular narrative of “dobitcoin and empty banks” is being replaced by the new reality of bank involvement in trusteeship, transactions and monetization.
CoinDesk quotes the Chief Executive Officer of Bitwise, Hunter Horsley, that two financial institutions that manage assets over $1 trillion in size approved encryption-related products this summer. According to Horsley, this suggests that even at a low stage in the market, large institutions are expanding access to encrypted assets.
However, Bitwise did not disclose the names of the two institutions, nor did it indicate the scope of approval, the form of the product and when the client could formally use the related services.
The role of banks has shifted from resistance to distribution
According to the article, traditional financial institutions are no longer primarily discussing whether encrypted assets should exist, but are beginning to participate in their distribution and infrastructure development. The Chief Investment Officer, Sygnum Fabian Dori, stated that the bank was moving from a former opponent to providing digital asset services through hosting, monetization and compliance transactions.
Dori attributed this change to the persistence of customer demand and to a clearer regulatory environment than in the past. In his view, the shift was more like a structural change than a mere short-term move following the market cycle.
Many banks have expanded their services in recent years.
The article listed a number of financial institutions that had entered the market earlier, including Swissquote, which provided a bitcoin deal in 2017, the Star Show Bank, which had been set up in 2020, and BBVA, which had entered the field in 2021.
Subsequently, BNY Mellon launched an agency-oriented encryption hosting service in 2022, Nubank went online to trade bitcoin and the Ether in the same year, and LGT added encryption services. In 2023, St. Galler Kantonalbank and Santander followed up; in 2024, Zürcher Kantonalbank increased its trade services for retail customers. It was also mentioned that institutions such as Scums, Cardinal, Sofi and Morgan Stanley had also entered the market.
Increased infrastructure cooperation and unchanged market characteristics
According to Nathan McCauley, Chief Executive Officer of Angelage Digital, over the past two years, the corporate client structure has increasingly reflected the convergence of traditional and decentralised finance. It is more common for large financial institutions to build infrastructure, not entirely self-contained systems, but in cooperation with professional encryption service providers.
He also mentioned that the chaining of real-world assets and the introduction of encrypted packaging products by large financial institutions were driving the two systems closer together. In this judgement, the future distinction between “traditional finance” and “decentralized finance” may continue to dilute.
However, the article also states that the entry did not change the operational characteristics of the encryption market itself. According to Dori, institutionalization is more the addition of a layer of infrastructure to the encrypted market and does not replace the fact that the market remains highly dependent on price volatility and narrative-driven transactions.