logo
Crypto-First Banks Are Coming To Shake Up The Banking World

Crypto-First Banks Are Coming To Shake Up The Banking World

Forbes25-04-2025
Crypto banks look set to redefine the banking sector in 2025
The Federal Reserve is the latest U.S. regulator to clear the path for crypto banking to enter the mainstream, so let's take a look at where the market stands and how it might evolve.
One of the implications of the pro-crypto policies pursued by the Trump administration is that the banking sector is positioned to undergo a transformation via both the expansion of crypto friendly banks as well as the launching of multiple crypto-native banks. As of this writing the only federally chartered crypto operating in the U.S. is Anchorage Digital Bank NA, with other efforts such as those launched previously by Paxos National Trust and Protego National Trust having faced obstacles at the federal level. One other institution of note is FV Bank, which operates as a U.S. licensed digital bank, providing a platform where clients can manage both traditional USD accounts and cryptocurrencies. FV Bank services encompass digital asset custody, traditional banking services like payments, and support for various stablecoins.
Even in face of state-based efforts such as in Wyoming the regulatory outlook has remained challenging since cryptoassets first became a mainstream financial markets topic; these icy market conditions seem set to finally begin thawing. To understand the importance of such developments in the U.S. banking industry crypto investors and advocates would be well served to reflect on how crypto banking hopefuls were treated in the past. One notable example is the ongoing legal battle between Custodia and the Federal Reserve, following multiple denials for inclusion in the Federal Reserve system despite substantial efforts by the firm to satisfy previously stated requirements. Despite these setbacks, in March 24 the firm partnered with Vantage Bank to tokenize U.S. dollar demand deposits on Ethereum via ERC-20; the appetite and interest in tokenized payments continues to accelerate.
In short the U.S. banking landscape has proven to be difficult, if not outright hostile, to crypto-native institutions, but this has not stopped innovation and the creativity in the space. As this outlook continues to pivot to a more hospitable one, let's take a look at what this means for crypto investors going forward.
One of the missing pieces of the cryptoasset ecosystem has been the lack of ability for investors to generate yield from investments and/or holdings. Notable collapses and potentially fraudulent activity that have occurred at various DeFi and stablecoin protocols in the past have not helped in the effort to develop legitimate options for investors. Most recently, Resolv Labs closed a $10 million seed round to not only expand a crypto-native yield platform utilizing the USR stablecoin, which amplifies the influence of the $450 DeFi protocol of the same name.
Other crypto leaders such as Circle, via its announced plans to go public, have ignited conversations about the possibility of distributions from stablecoin issers to future investors. Especially for banking institutions looking to offset some of the price and regulatory volatility that comes with the space, the ability to generate yield is an essential part of this plan. Interest generating cryptoassets also have the potential to entice institutional investors to support crypto-native banks, whose more patient capital will not be as volatile as retail investors can be during periods of uncertainty.
Having an additional income stream will also elevate another subset of the cryptoasset sector to even higher prominence than had already been achieved; stablecoins.
One of the few areas that comprehensive legislation has moved forward to any extent, least of all to the significant manner the STABLE and GENIUS acts have, is legislation pertaining to stablecoins. This makes sense for a number of reasons. First, stablecoins are intrinsically a straight-forward on-ramp for TradFi institutions, retail investors to gain exposure to the crypto space, highlighted by the reduced volatility that many such instruments provide. Second, recent efforts by Circle indicating its intent to go public and expand partnerships with U.S. banks build on similar efforts in the European Union. Notably, Societe Generale-Forge is planning to update its EUR Convertible stablecoin to comply with MiCA regulations as ING reportedly works on a stablecoin project as well.
Stablecoins provide an almost tailor-made method for financial institutions to enter the crypto sector, have regulations that have passed (in the European Union) or are making significant progress (in the U.S.) and also provide the institutions a vehicle to duplicate the interest bearing accounts that have become more enticing given the higher rates of the post-COVID era. In addition, for audit and bank examination purposes, stablecoins promise transparency and fungibility that have proven difficult to duplicate with other existing crypto instruments.
The evolution of the cryptoasset ecosystem continues to accelerate in new, and somewhat unexpected directions, as consolidation and greater integration with the TradFi space look set to dominate the market in 2025 and beyond. Stablecoins, providing stability, traceability, auditability, and yield (income) potential for institutional players and customers alike, look well positioned to play a leading role in crypto banking growth moving forward.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

How Bitcoin Treasury Companies Are Beating Bitcoin's Returns
How Bitcoin Treasury Companies Are Beating Bitcoin's Returns

Yahoo

time8 minutes ago

  • Yahoo

How Bitcoin Treasury Companies Are Beating Bitcoin's Returns

Publicly listed Bitcoin (CRYPTO: BTC) treasury companies are no longer just passive holders of BTC. A new financial model, leveraging traditional capital markets tools like share issuance and fixed-income debt, is enabling these firms to outperform Bitcoin itself in BTC terms. At the core of this model is a focus on growing the Bitcoin-per-share (BPS) ratio. Rather than simply tracking Bitcoin's price, these companies aim to accumulate more BTC per outstanding share over time. The result is a growing 'BTC yield,' a return denominated not in fiat but in Bitcoin units. Strategy (NASDAQ:MSTR), the most prominent example, has perfected this playbook. The company regularly conducts at-the-market (ATM) equity offerings, issuing new shares when its stock is trading at a premium to its net asset value (NAV). The capital raised is immediately used to purchase more BTC. Despite diluting shareholders in nominal terms, these actions are accretive to the BPS ratio, meaning that each share is backed by more BTC than before. This mechanism only works when the company's market cap trades above the value of its Bitcoin holdings. In this scenario, equity issuance allows the company to extract a premium from short-term buyers, reinvesting it into BTC to benefit long-term holders. Also Read: The higher the market premium, the greater the accretive yield. This dynamic has allowed Strategy to achieve what some call BTC-native outperformance. In 2024 alone, Strategy delivered a 75% BTC yield for its shareholders. That is, if a share was backed by 0.001 BTC at the beginning of the year, it was backed by 0.00175 BTC by year-end without BTC needing to rise in price. The second leg of this model is leverage. Treasury companies can issue debt at interest rates lower than their expected Bitcoin CAGR (compound annual growth rate), using the proceeds to acquire more BTC. For example, if BTC is expected to grow 20% annually and the firm can borrow at 8%, the 12% spread is effectively captured as additional BPS growth. When used conservatively, over long durations and with manageable liquidation thresholds, this leverage enhances BTC returns without exposing the company to short-term volatility risk. Taken together, these two tools, ATM equity issuance and strategic debt financing, turn treasury companies into what analysts are calling "full-stack Bitcoin yield engines." Critics often label these stocks as overpriced, citing high market cap-to-NAV (mNAV) ratios. But within this framework, a premium mNAV can be rational: if the BTC yield from BPS growth equals or exceeds the premium paid, long-term holders still win. In fact, a high mNAV enables more effective equity issuance, further reinforcing the flywheel of BTC accumulation. This model stands in stark contrast to altcoin treasury companies, which typically rely only on equity issuance and face higher risk due to the less predictable performance of their underlying assets. Ethereum (CRYPTO: ETH) treasury companies, for instance, have yet to meaningfully deploy debt-based strategies to scale BPS, though Standard Chartered recently projected they could eventually hold 10% of all ETH if they follow a similar model. Read Next: Image: Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? This article How Bitcoin Treasury Companies Are Beating Bitcoin's Returns originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio

Trump confirms possible China trip, but insists ‘not seeking' Xi summit
Trump confirms possible China trip, but insists ‘not seeking' Xi summit

New York Post

time10 minutes ago

  • New York Post

Trump confirms possible China trip, but insists ‘not seeking' Xi summit

President Trump has revealed that he may jet over to China in the near future, but rebuffed suggestions that he is seeking a summit with Beijing counterpart Xi Jinping amid intense trade negotiations between the two economic superpowers. 'The Fake News is reporting that I am SEEKING a 'Summit' with President Xi of China. This is not correct, I am not SEEKING anything!' Trump wrote on Truth Social late Monday from Scotland, where he wrapped up a five-day visit Tuesday. 'I may go to China, but it would only be at the invitation of President Xi, which has been extended. Otherwise, no interest! Thank you for your attention to this matter.' Staffers for Trump and Xi have held discussions about setting up a meeting between the two leaders, potentially on the sidelines of the annual Asia-Pacific Economic Cooperation (APEC) meeting in South Korea, which takes place Oct. 30-Nov. 1, Reuters reported last week. It is unclear whether any discussions of Trump traveling to China directly have been broached. 3 President Trump confirmed ongoing talks with China about him meeting with leader Xi Jinping. Xinhua News Agency via Getty Images 3 President Trump and Chinese leader Xi Jinping's last in-person meeting took place in 2019. XinhuaTrump and Xi last met face-to-face in June 2019 on the sidelines of the G-20 summit in Osaka, Japan. The US and China have until Aug. 12 to reach a full-fledged trade agreement following a months-long truce that has seen duties temporarily come down from up to 145% on Chinese exports to the US and 125% on American goods. Negotiators from Washington and Beijing are holding a third round of talks this week in Stockholm. 'We have a good relationship with China,' Trump told reporters Monday at his Turnberry club on the west coast of Scotland. 'China's tough.' In 2024, China was the third-largest US trading partner among individual nations — behind only Mexico and Canada — with trade between the two nations amounting to $582.4 billion. Further complicating negotiations is Trump's looming threat to impose secondary tariffs of 100% against countries that trade with Moscow until the Kremlin ends its invasion of Ukraine and agrees a peace deal. China and India, in particular, have continued to purchase energy from Russia throughout the 41-month-old war on Ukraine. China has also been accused of providing Moscow's arms industry with critical supplies. 3 The Trump administration is currently involved in trade negotiations with China. Getty Images Beyond trade tensions, US officials have repeatedly warned about Chinese cyber attacks, such as the Salt Typhoon operation that breached American telecommunications systems. On Monday, the Financial Times reported that the Trump administration blocked Taiwanese President Lai Ching-te from stopping in New York City during a planned diplomatic visit to Central America later this year. China has long claimed sovereignty over the island state of Taiwan, which has its own currency, military and government. The US adheres to the One China Policy on paper, which acknowledges Beijing's claim, but takes no position on it.

Trump's EPA to repeal finding that climate pollution endangers human health
Trump's EPA to repeal finding that climate pollution endangers human health

USA Today

time10 minutes ago

  • USA Today

Trump's EPA to repeal finding that climate pollution endangers human health

WASHINGTON - The Environmental Protection Agency will rescind the long-standing finding that greenhouse gas emissions endanger human health, as well as tailpipe emission standards for vehicles, setting off what it describes as the largest deregulatory action in U.S. history. Republican President Donald Trump's pick to run the EPA Lee Zeldin announced the agency's plan to rescind the "endangerment finding" on the Ruthless podcast on Tuesday, saying it will save Americans money and unravel two decades of regulation aimed at reducing carbon dioxide, methane and other greenhouse gases from cars, power plants, oil production and other sources. In 2009, the EPA under former Democratic President Barack Obama issued a finding that emissions from new motor vehicles contribute to pollution and endanger public health and welfare. It was upheld in several legal challenges and underpinned subsequent greenhouse gas regulations. "With regard to the endangerment finding, they'll say carbon dioxide is a pollutant and that's the end of it. They'll never acknowledge any type of benefit or need for carbon dioxide," Zeldin told the podcast. "It's important to note, and they don't, how important it is for the planet." Reuters reported last week that the EPA plans to repeal all greenhouse gas emission standards for light-duty, medium-duty, and heavy-duty vehicles and engines in the coming days after it removes the scientific finding that justified those rules, according to a summary. It is also expected to justify rescinding the endangerment finding by casting doubt on the scientific record used to make the finding, saying that "developments cast significant doubt on the reliability of the findings," the summary seen by Reuters says. The U.S. Supreme Court, in its landmark Massachusetts v. EPA case in 2007, said the EPA has authority under the Clean Air Act to regulate greenhouse gas emissions and required the agency to make a scientific finding on whether they endanger public health. If finalized, this action will devastate the EPA's ability to carry out its primary authority to limit climate pollution under the federal Clean Air Act. Environmental activists immediately condemned the announcement. 'As if any doubt remained, the Trump Administration has formalized climate denial as the official policy of the United States government," said Sierra Club Acting Executive Director Loren Blackford in a statement. "If approved, rescinding the endangerment finding would strike a decisive blow to the EPA's authority to limit deadly greenhouse gas emissions and protect our people and our planet from the very worst of the climate crisis. Nearly every single day we see increased incidents of extreme weather, record heatwaves, deadly floods and droughts all threatening our lives and communities—all of which are the undeniable result of greenhouse gas emissions. 'The Trump administration is again taking a sledgehammer to the very foundation of our government and settled law, and doing so only to the benefit of corporate polluters while we pay the price." Zeldin said he will make the formal announcement on Tuesday afternoon in Indiana. Contributing: Ben Adler

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store