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Crypto Pilots Move Inside Big Banks
Major US banks are quietly testing stablecoins, crypto custody, and digital-asset trades with Coinbase. Armstrong revealed this during the DealBook Summit, where he warned that banks moving slow “will get left behind.” Some executives in the room looked like they had just heard Wi-Fi was being banned.
He didn’t name the banks, but insiders say these pilots are early steps toward full crypto integration across traditional finance.
Bitcoin Gets a Nod From an Unlikely Fan
Armstrong shared the stage with BlackRock’s Larry Fink. The two don’t often agree on crypto, but this time they sounded almost synchronized. Armstrong said Bitcoin will never hit zero. Fink said the asset finally has a “real use case,” though he noted that leveraged traders still swing the market around like it’s a carnival ride.
BlackRock’s own Bitcoin ETF, IBIT, has grown into the world’s largest spot Bitcoin fund after launching in 2024.
Tokenized Treasuries Take Off
BlackRock also operates the biggest tokenized US Treasury product. It holds about $2.3 billion in assets. Tokenized bonds are gaining traction fast as institutions test blockchain rails for traditional products.
This shift marks a slow but steady migration of classic financial tools into the crypto world.
Banks Push Back Even While Testing
Despite the quiet collaboration, banks are also throwing elbows. In August, the Banking Policy Institute warned that stablecoins might damage the traditional credit model. They want Congress to tighten the GENIUS Act.
Banks argue that Coinbase benefits from a “loophole” that prevents stablecoin issuers from offering yield but lets third parties do it. Coinbase, for obvious reasons, disagrees.
Armstrong has also been blunt. He said Coinbase wants to become a “super app” that could one day replace banks. That did not win him any holiday cards from JPMorgan.
Lobbyists Try to Slow Coinbase Down
Banks have pushed regulators to block Coinbase’s trust-charter application. They claim the exchange’s custody model is unproven. Coinbase’s legal chief Paul Grewal fired back on X, saying bank lobbyists are “digging moats” to keep out competition.
It’s another chapter in the eternal rivalry between big banks and the crypto industry. And despite the noise, the pilots show that both sides may need each other after all.
Footing:
Stablecoin: A crypto asset pegged to a stable value, usually USD.
Custody: Secure storage of digital assets.
ETF: Exchange-traded fund holding assets like Bitcoin.
Tokenization: Putting traditional assets on a blockchain.
