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

Last updated: June 20, 2025, 13:37 | Written by: Brad Garlinghouse

The financial landscape is rapidly evolving, and one of the most significant developments is the increasing interest in digital currencies.Forget clunky, traditional systems! 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.Picture a world where money moves seamlessly, securely, and instantly across borders.What if I told you that vision is becoming a reality? 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 calledIn a groundbreaking move, four major banks are reportedly joining forces to develop their own Bitcoin-like digital currency.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.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. 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.Several factors are driving this shift:

Efficiency and Speed: Traditional banking systems can be slow and cumbersome, especially for international transactions. Review the bank's track record in handling digital assets; Service Integration. Assess the range of supported cryptocurrencies; Evaluate integration with major crypto exchanges; Check for availability of crypto cards and payment solutions; Consider the availability of additional services like staking and lending; Geographic Availability andDigital currencies built on blockchain offer near-instantaneous payments, 24/7, globally.Platforms 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. Join Coinbase One today and get 4.5% APY on your first $30,000 USDC, zero trading fees, priority support, and more. Claim free trial Explore crypto like Bitcoin, Ethereum, and DogecoinAccording 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.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.Here'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. The live Bitcoin price today is $104,364.35 USD with a 24-hour trading volume of $50,255,072,425.45 USD. We update our BTC to USD price in real-time.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. 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.This provides price stability and reduces volatility.
Private Blockchain Networks: Banks may utilize private blockchain networks, where participation is restricted to authorized institutions. With the largest market cap and the highest level of mainstream recognition of any digital currency, this peer-to-peer electronic cash allows you to send and receive payments without going through a middleman like your bank. While bitcoin may be the best-known crypto, that doesn t necessarily mean it s the best.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.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. 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 investmentsThey 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. 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.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.Here are some factors to consider:

Track Record: Review the bank's experience in handling digital assets. On the other hand, centralized currency like the US Dollar can be regulated to reduce market volatility. As a newer digital currency, crypto has yet to catch up to the allure of traditional investments, such as stocks and bonds. Positive Impacts of Cryptocurrency on Banks. Cryptocurrency isn t just a popular investment vehicle for traders.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.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.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.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. Binance is the world's leading cryptocurrency exchange, catering to over 270 million registered users in over 180 countries. With low fees and over 400 cryptocurrencies to trade, Binance is the preferred exchange to trade Bitcoin, Altcoins, and other virtual assets.Consider 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. A recent statement from Coinbase revealed that the MCC (merchant category code) for digital currency purchases was changed by a number of the major credit card networks that allow banks and card issuers to charge additional cash advance fees which could be as high as 23.99 percent and which aren t charged or collected bySome 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. Calculate live currency and foreign exchange rates with the free Xe Currency Converter. Convert between all major global currencies, precious metals, and crypto with this currency calculator and view the live mid-market rates.As technology continues to evolve, we can expect further innovation and disruption in the banking industry.Some 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.This move highlights the growing recognition of blockchain technology and digital assets as key drivers of future innovation. 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.While challenges and uncertainties remain, the potential benefits of increased efficiency, reduced costs, and greater financial inclusion are undeniable. 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 ofWhether 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. JPMorgan is now allowing clients to buy bitcoin, a major shift for the largest U.S. bank.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. In 2025, they launched DBS Digital Exchange (DDEx), where approved investors can safely trade and store digital coins like Bitcoin and Ethereum. The bank also offers special token services that use blockchain technology to make business banking faster and easier, especially for things like international payments and trade finance.The world of finance is changing, and being informed is your best strategy.