The world of banking is slowly entering the blockchain era. A report shared by BitGo on February 27 shows that more than half of the twenty-five largest U.S. banks are already testing digital asset services.
These trials focus on custody, tokenization, and stablecoin use. Financial institutions are trying to stay relevant as customer behavior changes.
The market for digital assets is expanding rapidly. Globally, 716 million people own crypto, and the number of monthly active users is estimated to be 40 to 70 million.
Source: BitGo
In the past year, 10 million new users entered the market. Young investors are leading the revolution, with individuals under 43 years of age allocating 14% of their investments to crypto assets.
Source: BitGo
Large investment products are also expanding. Crypto exchange-traded funds have more than $225 billion in assets under management.
Investment products linked to BlackRock have been successful, and its Bitcoin ETF was the fastest-growing exchange-traded product in the history of Wall Street.
Regulation Brings Confidence to Institutional Adoption
Slowly, governments are starting to formulate regulations for the digital market. In the United States, the GENIUS Act was passed in 2025, allowing banks and non-bank issuers to issue regulated stablecoins.
There is also another proposal called the CLARITY Act, which is being processed by lawmakers to define digital commodities and securities.
It is evident that there is progress in regulation globally. The European Union is implementing the Markets in Crypto-Assets regulatory framework to ensure that there is a uniform regulatory framework for all member states.
Singapore and Hong Kong are increasing the bar for the licensing of crypto exchanges and custody businesses.
The United Kingdom is extending crypto regulation to its core financial regulations. The volume of stablecoin transactions is now above one trillion dollars monthly.
Such high volumes are similar to those of traditional payment systems, and this indicates that digital currencies have outgrown the speculation stage of trading.
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Banks Explore Crypto Assets for New Revenue Streams
Banks are exploring ways in which digital assets can generate revenue. Stablecoins assist in maintaining deposits and enable instant payments. The trading function within banking apps can generate revenue through spreads and fees.
Staking is another revenue-generating function where customers can lock their digital assets on proof-of-stake blockchains and earn rewards, with a nominal service fee charged by banks. Cross-border payments become cheaper using blockchain rails.
Source: BitGo
Tokenization is expected to be a large financial trend. Forecasts indicate that the market for tokenized assets could reach $23 trillion by 2033. Wealth platforms are likely to combine traditional investment portfolios with blockchain-based assets.
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