4 MAJOR BANKS CONFIRM THEY ARE BUILDING BITCOIN-LIKE DIGITAL CURRENCY

Last updated: June 19, 2025, 22:47 | Written by: Cameron Winklevoss

The financial landscape is rapidly evolving, and one of the most significant developments is the increasing interest in digital currencies. In a CBDC world, the digital code for each virtual currency unit will be held in a digital wallet and transferred seamlessly by the wallet-holder to other people s digital wallets, HBR says. A CBDC would differ from cryptocurrency as it would be issued by a central bank, rather than a private coin like Bitcoin.Forget clunky, traditional systems! Bitcoin and crypto presidential advisory council. At Bitcoin 2025, Trump also said he intended to set up a council focused on issues related to digital assets: Their task will be to designPicture a world where money moves seamlessly, securely, and instantly across borders.What if I told you that vision is becoming a reality? A guide to what digital currencies issued by central banks could mean for users, banks and the economy why-central-banks-want-to-create-their-own-digital-currencies-like-bitcoin-In a groundbreaking move, four major banks are reportedly joining forces to develop their own Bitcoin-like digital currency. Choosing the right crypto-friendly bank depends on how you use digital assets. If you re looking for an easy way to buy and sell Bitcoin, platforms like Cash App and SoFi provide simple solutions. For businesses dealing with crypto transactions, BankProv and Mercury offer specialized financial services.This initiative leverages the power of blockchain technology, the very backbone of Bitcoin, to revolutionize how we handle transactions and settlements.This isn't just about keeping up with trends; it's about potentially establishing a new global standard for financial operations.With countries like China already experimenting with digital Yuan, and institutions like the Bank of England exploring ""RSCoin,"" the shift toward digital currency is undeniable. In recent years major banking institutions have explored this new currency system. As recently as this year The Bank of England announced their initiative to create their own cryptocurrency. They ve named it RSCoin. This new digital currency shares many characteristics of the famous Bitcoin. Similarly, RSCoin is managed using the same blockchain technology necessary for [ ]But what does this mean for you, the average user, and the future of banking?

Why Are Major Banks Interested in Digital Currencies?

Banks, traditionally seen as gatekeepers of the financial world, are now actively exploring the possibilities offered by cryptocurrencies.Several factors are driving this shift:

Efficiency and Speed: Traditional banking systems can be slow and cumbersome, especially for international transactions.Digital currencies built on blockchain offer near-instantaneous payments, 24/7, globally. Digital currency denominated in its own units of value or with decentralized or automatic issuance will be considered as a virtual currency. As such, bitcoin is a digital currency but also a type of virtual currency. bitcoin and its alternatives are based on cryptographic algorithms, so these kinds of virtual currencies are also calledPlatforms like SAP Digital Currency Hub can even connect existing ERP systems with blockchain-based finance.
Reduced Costs: By cutting out intermediaries, such as clearinghouses and correspondent banks, digital currencies can significantly lower transaction fees.Merchant processors built on Bitcoin can offer much lower fees compared to traditional methods like PayPal or credit card networks.
Innovation and Competition: The rise of cryptocurrencies like Bitcoin has disrupted the financial industry, forcing banks to innovate to remain competitive. The world is changing and more people are getting into cryptocurrencies. Now, some banks are friendly towards these digital coins. They can help connect regular banking with crypto. These banks have some great benefits, but they also have a few downsides. Let s look at the good and the bad so you can decide what s best for you.According to one report, 23 of the top 100 banks are actively building their own custodial technology or integrating tech provider products.
Control and Regulation: Unlike decentralized cryptocurrencies, central bank digital currencies (CBDCs) offer governments and central banks more control over monetary policy and financial regulation. Four major world banks are set to announce the creation of a new blockchain-based currency, and are hoping to make it the global standard for settlements.This allows for targeted stimulus programs, fraud prevention, and enhanced oversight.

The Power of Blockchain Technology

At the heart of these digital currency initiatives lies blockchain technology. Adam Hayes, Ph.D, CFA, is a financial writer with 15 years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics andHere's why it's so crucial:

Decentralization: Blockchain distributes transaction records across a network of computers, making it virtually tamper-proof.
Transparency: All transactions are publicly recorded on the blockchain, enhancing accountability and trust.
Security: Cryptographic algorithms secure the blockchain, making it resistant to hacking and fraud.
Efficiency: Blockchain streamlines transaction processing, reducing the need for intermediaries and paperwork.

The potential applications of blockchain extend far beyond digital currencies, including supply chain management, healthcare, and voting systems.

How Will These Bank-Backed Digital Currencies Work?

While the exact details of these initiatives are still emerging, we can glean some insights from existing projects and industry trends:

Central Bank Digital Currencies (CBDCs): Unlike cryptocurrencies like Bitcoin, CBDCs are issued and regulated by a central bank.Think of it as digital cash backed by the government.
Stablecoins: Some banks may opt for stablecoins, which are cryptocurrencies pegged to a stable asset like the US dollar. President Donald Trump has signed a Executive Order titled Strengthening American Leadership in Digital Financial Technology. The directive lays out a bold vision for bolstering the United States position in the global digital asset economy most notably embracing open blockchain networks like Bitcoin while flatly prohibiting the development of Central Bank Digital Currencies (CBDCs).This provides price stability and reduces volatility.
Private Blockchain Networks: Banks may utilize private blockchain networks, where participation is restricted to authorized institutions.This allows for greater control and privacy.

In a CBDC world, each virtual currency unit will be held in a digital wallet and transferred seamlessly to other wallets. They provide safe, decentralized platforms for peer-to-peer transactions without the need for middlemen like banks, thanks to their use of blockchain technology. These are a few well-known payment cryptocurrencies, including: Bitcoin (BTC): First decentralized cryptocurrency, uses proof-of-work (PoW) consensus.This would revolutionize payments and settlements, making them faster, cheaper, and more efficient.

The Global Race for Digital Currency Dominance

The development of digital currencies is a global race, with several countries vying for leadership:

China: China has been at the forefront of CBDC development, with its digital Yuan already undergoing extensive trials.They even handed out $6.2 million in digital currency to Beijing residents as part of a trial.
The Bank of England: The Bank of England is exploring its own cryptocurrency, RSCoin, which shares many characteristics with Bitcoin.
Other Nations: Multiple countries have expressed interest in creating their own CBDCs, recognizing their potential to modernize financial systems and enhance economic competitiveness.

The country that successfully implements a widely adopted digital currency could gain a significant economic advantage.

Impacts of Cryptocurrency on Traditional Banks

While some banks are embracing cryptocurrency and blockchain technology, others remain skeptical.The integration of digital assets into the traditional banking system presents both opportunities and challenges.

Positive Impacts:

New Revenue Streams: Banks can generate revenue by offering cryptocurrency-related services, such as custody, trading, and lending.Institutions like Morgan Stanley and Goldman Sachs are already offering access to Bitcoin and Ethereum funds for their wealthy clients.
Improved Customer Service: Digital currencies can enable faster and more convenient payment options, enhancing customer satisfaction.
Enhanced Efficiency: Blockchain technology can streamline internal processes, reducing costs and improving operational efficiency.

Potential Challenges:

Regulatory Uncertainty: The regulatory landscape for cryptocurrencies is still evolving, creating uncertainty for banks.
Security Risks: Banks must implement robust security measures to protect digital assets from hacking and theft.
Competition from Fintech Companies: Fintech companies are challenging traditional banks by offering innovative cryptocurrency-based services.
Market Volatility: Cryptocurrencies are known for their price volatility, which can create risks for banks and their customers.

Navigating the Crypto Landscape: Choosing a Crypto-Friendly Bank

If you're looking to integrate cryptocurrency into your financial life, choosing a crypto-friendly bank is crucial. Often called 'digital gold,' Bitcoin is a decentralized digital currency that operates without a central authority. It allows secure, peer-to-peer transactions and serves as a store of value, with a capped supply of 21 million BTC, making it a popular hedge against inflation.Here are some factors to consider:

Track Record: Review the bank's experience in handling digital assets. Multiple countries have expressed their interest and the importance of a central bank-created digital currency. China has primarily led this ambition. Early this week, they handed out $6.2 million in digital currency to Beijing residents as part of a trial. 200,000 residents have received 200 digital Yuan, China s currency.Has it been involved in any security breaches or regulatory issues?
Service Integration: Assess the range of supported cryptocurrencies and the integration with major crypto exchanges.
Availability of Crypto Cards and Payment Solutions: Check if the bank offers crypto cards or other payment solutions that allow you to spend your digital assets.
Additional Services: Consider the availability of additional services like staking and lending, which can help you earn passive income on your crypto holdings.
Geographic Availability: Ensure the bank operates in your region and complies with local regulations.

Platforms like Cash App and SoFi offer simple solutions for buying and selling Bitcoin, while BankProv and Mercury provide specialized financial services for businesses dealing with crypto transactions. They support the trading of Bitcoin futures, in addition to considering the possibility of offering a Bitcoin ETF as part of their U.S. Global Markets division. As of 2025, Goldman Sachs is offering interested clients access to Ethereum funds issued by Galaxy Digital with a minimum deposit of $250,000, according to SEC filing.Researching and comparing different options is crucial to finding the right fit for your needs.

Are there any Banks that don't allow Cryptocurrency transactions?

Yes, some banks still prohibit or restrict cryptocurrency transactions. Supporting over 200 cryptocurrencies and advanced features like margin and futures trading, Kraken caters to diverse investor needs. Recognized for its robust security measures and regulatory compliance, Kraken has never suffered a major hack. The exchange provides competitive fees, a user-friendly interface, and 24/7 customer support.Bank of America, JP Morgan Chase, and Citigroup are examples of major banks that, at one point, didn't allow cryptocurrency purchases with their credit cards. This is an important change in the bank s strategy for digital payment and is a part of a wider movement of banks that are traditionally moving to the blockchain and the technology of digital assets. Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo may dive into cryptocurrency as they plan to get rid of the pennies.It's important to check with your specific bank about their policies regarding cryptocurrency transactions, as these can change over time.

Understanding the Risks and Rewards of Cryptocurrency Investments

Before investing in cryptocurrency, it's essential to understand the associated risks and rewards:

Potential Rewards:

High Growth Potential: Cryptocurrencies have the potential for significant price appreciation, offering investors the opportunity to generate substantial returns.
Diversification: Cryptocurrencies can provide diversification benefits to a portfolio, as they are often uncorrelated with traditional assets like stocks and bonds.
Decentralization: Cryptocurrencies offer an alternative to traditional financial systems, providing greater control and autonomy over your finances.

Potential Risks:

Volatility: Cryptocurrency prices can be highly volatile, leading to significant losses if you're not careful.
Security Risks: Cryptocurrencies are vulnerable to hacking and theft, especially if you don't take proper security precautions.
Regulatory Uncertainty: The regulatory landscape for cryptocurrencies is still evolving, which can create uncertainty for investors.
Lack of Insurance: Unlike traditional bank deposits, cryptocurrency holdings are typically not insured by government agencies.

It's crucial to conduct thorough research and only invest what you can afford to lose. Three major banks confirm that they won t allow cryptocurrency transactions with their credit cards. Bank of America, JP Morgan Chase and Citigroup won t let you buy Bitcoin on creditConsider consulting with a financial advisor to determine if cryptocurrency investments are right for you.

What is the Role of Cryptocurrency Exchanges?

Cryptocurrency exchanges play a vital role in the digital asset ecosystem, providing a platform for buying, selling, and trading cryptocurrencies. Before bitcoin took the spotlight, several digital currencies aimed to change the way we exchange value, but none of them lasted. Before bitcoin took the spotlight, several digital currenciesSome popular exchanges include:

Binance: The world's leading cryptocurrency exchange, catering to over 270 million registered users in over 180 countries.
Coinbase: A user-friendly platform that offers a variety of cryptocurrency products and services.
Kraken: Recognized for its robust security measures and regulatory compliance, Kraken caters to diverse investor needs.

When choosing an exchange, consider factors such as security, fees, liquidity, and supported cryptocurrencies.It's also important to be aware of the risks associated with using exchanges, such as hacking and regulatory uncertainty.

The Future of Banking in the Digital Age

The development of Bitcoin-like digital currencies by major banks signals a significant shift in the financial landscape.As technology continues to evolve, we can expect further innovation and disruption in the banking industry. A central bank digital currency (CBDC) is a digital currency that would be issued and overseen by a country s central bank. Think of it like Bitcoin, but if Bitcoin were managed by the Bank ofSome potential future developments include:

Increased Adoption of CBDCs: More countries are likely to launch their own CBDCs, transforming the way we transact and manage money.
Integration of Blockchain Technology: Banks will increasingly leverage blockchain technology to streamline internal processes and improve customer service.
Rise of Decentralized Finance (DeFi): DeFi platforms will continue to challenge traditional financial institutions by offering innovative lending, borrowing, and trading services.
Greater Regulatory Clarity: Regulators will develop clearer rules and guidelines for cryptocurrencies, providing greater certainty for banks and investors.

The financial world is on the cusp of a major transformation, and digital currencies will play a central role in shaping its future.

Conclusion

The news that four major banks are actively building Bitcoin-like digital currencies marks a pivotal moment for the financial industry. It found 23 of the top 100 banks are either building their own custodial technology or integrating a tech provider's product into their own systems. 3. Citibank - $279 million and 14 investmentsThis move highlights the growing recognition of blockchain technology and digital assets as key drivers of future innovation. Additionally, merchant processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants' bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks.While challenges and uncertainties remain, the potential benefits of increased efficiency, reduced costs, and greater financial inclusion are undeniable. As the first big Wall Street bank to embrace cryptocurrencies, Morgan Stanley announced on that they will be offering access to bitcoin funds for their wealthy clients through three funds which enable bitcoin ownership for investors with an aggressive risk tolerance. [254]Whether it's CBDCs, stablecoins, or private blockchain networks, the integration of digital currencies into the banking system is poised to reshape how we handle money and conduct transactions globally.Now is the time to educate yourself, explore the options, and prepare for a future where digital currencies are the norm.Consider exploring crypto-friendly banks and understanding the risks and rewards associated with cryptocurrency investments. Cryptocurrency has gained popularity because it offers a straightforward way to transfer funds entirely online, without involving third parties like banks or credit card companies (and paying the fees they often charge for processing transactions). Instead of physical coins or paper notes, cryptocurrencies have digital tokens, orThe world of finance is changing, and being informed is your best strategy.