BANKS WANT BITCOIN REGULATED, BUT SEE SAME BENEFITS WE DO

The world of cryptocurrency, particularly Bitcoin, has always been a fascinating tug-of-war between traditional finance and decentralized innovation. China has taken a very strict stance on cryptocurrency regulation. The People s Bank of China (PBOC) has been steadily tightening its grip since 2025, starting with a ban on financial institutions handling Bitcoin transactions. This was followed by a complete ban on Initial Coin Offerings (ICOs) and domestic cryptocurrency exchanges in 2025.Recently, banks have been increasingly vocal about the need for Bitcoin regulation.While some might interpret this as an attempt to stifle the crypto revolution, a closer look reveals a more nuanced perspective. At the same time, authorities intensified efforts to eliminate bitcoin mining due to concerns about energy consumption and lack of proper control. On the other hand, in Hong Kong, the government is positioning the city as a hub for wideranging digital and Web3 innovation, with new regulations aimed at facilitating retail trading, and attractingBanks, like many others, recognize the immense potential of Bitcoin and blockchain technology.However, they also understand the inherent risks associated with unregulated digital assets, risks that could impact their own operations and the broader financial system. 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.What's truly interesting isn't just the call for regulation, but the underlying motivations and the silent acknowledgment that Bitcoin's core principles offer significant advantages – advantages that banks themselves are keen to leverage.We're talking about faster transactions, enhanced security (when implemented correctly), and new avenues for financial inclusion. While some banks were initially hesitant to engage with blockchain technology, fearing instability and regulatory uncertainty, the cryptocurrency ecosystem s relative maturity now presentsThis article delves into why banks are advocating for regulation, the benefits they secretly admire, and how this dynamic landscape is shaping the future of finance.In essence, the banks are playing a game of 'if you can't beat them, regulate them, and then join them.'

The Push for Bitcoin Regulation: A Banker's Perspective

Why are banks suddenly so interested in regulating Bitcoin?The answer lies in a combination of factors, primarily revolving around risk management, consumer protection, and maintaining their competitive edge. Ally Bank: FDIC-insured: Bank-grade encryption, fraud protection: No extra fees for crypto transactions: Varies by platform: Not directly supported: Mercury Bank: US-regulated (FDIC-insured partner banks) 2FA, End-to-end encryption: No monthly fees, or transaction fees apply: No fixed withdrawal limit: Basic tax reporting tools availableThe volatile nature of cryptocurrencies, coupled with the potential for illicit activities like money laundering, poses a significant threat to the stability of the financial system. This has led to a growing debate over the benefits and drawbacks of regulated banks versus Bitcoin and crypto. While regulated banks offer stability and security, cryptocurrencies offer decentralized transactions and the potential for financial freedom. Understanding the Risks of Cryptocurrencies. Bitcoin was born to eliminate the need to trustBanks, bound by stringent regulatory requirements, are naturally wary of these risks.The FTX collapse, which resulted in billions of dollars lost and shook investor confidence, served as a stark reminder of the dangers lurking in the unregulated crypto space.The need for robust regulatory frameworks is becoming increasingly clear.

• Risk Mitigation: Banks are responsible for safeguarding their customers' assets and ensuring the stability of the financial system.Unregulated cryptocurrencies pose risks such as price volatility, fraud, and cyberattacks.
• Consumer Protection: Regulations can protect consumers from scams, fraud, and the loss of their investments.
• Compliance: Banks operate under strict regulatory frameworks and need clear guidelines on how to interact with cryptocurrencies to remain compliant.
• Fair Competition: Regulations can level the playing field and prevent unregulated crypto entities from gaining an unfair advantage over traditional financial institutions.

Unveiling the Benefits Banks See in Bitcoin and Blockchain

Beyond the need for regulation, banks secretly admire the underlying technology that drives Bitcoin and other cryptocurrencies. Earlier this year, Citi published a paper entitled The Regulated Internet of Value (the Citi Paper ). In it, Tony McLaughlin, Head of Emerging Payments and Business Development at Citi s Treasury and Trade Solutions, tackles the topic of tokenization and the ongoing tug-of-war between proponents of stablecoins and those who favor central bank digital currency (CBDC). He suggestsBlockchain, the distributed ledger technology behind Bitcoin, offers numerous advantages that could revolutionize the financial industry. Banks getting into crypto want to do so quickly, but also safely in order to maintain the hard-earned trust of their clients. That is why banks often put security front-and-center in the searchThese advantages include increased efficiency, transparency, and security.Banks, constantly seeking ways to improve their operations and enhance customer service, are actively exploring how they can leverage blockchain technology.

Efficiency and Speed

Traditional banking systems often involve lengthy processing times and multiple intermediaries. In the wake of the FTX collapse that tanked the price of Bitcoin to the lowest in years and cost investors over $8 billion, some of whom were New York depositors from Black and brown communities, the cryptocurrency industry must be held to the same macroprudential financial regulations as our traditional financial institutions to ensureBlockchain technology can streamline these processes, enabling faster and more efficient transactions. Regulatory concerns: Banks, while sometimes not as secure as we d like to think, are highly regulated. Crypto apps that offer bank-like features may not be regulated in the same way as a traditional bank. Limited crypto selection: When trading crypto through a bank or finance app, expect a limited selection of cryptocurrencies, often fewerFor example, cross-border payments, which typically take days to clear, can be settled in minutes using blockchain-based solutions. As cryptocurrency has become a more significant factor in the global investment landscape, countries have taken different approaches to regulating the asset class.; The European Union became theThis speed and efficiency translate to cost savings for both banks and their customers.

Transparency and Auditability

Blockchain's immutable ledger provides a transparent and auditable record of all transactions. We dive into the dozen bills under consideration in Congress and zoom in on the three big themes for crypto regulation in 2025. The SEC vs CFTC: Finally, a truce? One of the major disagreements between the industry and legislators has been whether the SEC or the Commodity Futures Trading Commission (CFTC) is the right regulator for crypto.This transparency can help reduce fraud, improve compliance, and enhance trust. If the U.S. Treasury Department regulates stablecoin issuers as banks, these companies should be offered the same privileges. If the U.S. Treasury Department regulates stablecoin issuers as banksBanks can use blockchain to track assets, verify identities, and streamline regulatory reporting. Markets in Crypto-Assets Regulation (MiCA) The cornerstone of the EU s crypto regulation is the Markets in Crypto-Assets Regulation (MiCA), officially known as Regulation (EU) 2025/1114. MiCA provides clear rules for crypto-assets not previously covered by existing financial services legislation.The ability to trace transactions in a secure and transparent manner is a major advantage for financial institutions.

Enhanced Security

While cryptocurrencies themselves are not immune to security breaches, blockchain technology offers robust security features. A global approach is needed to maximize the advantages from the underlying technology and to manage the risks, the paper says. However, given the different stages of market maturity, the development of regional hubs and the varying capacity of regulators, it is prudent to holistically focus also on the important role that international organizations and national/regional regulators asCryptographic techniques and distributed consensus mechanisms make it difficult for hackers to tamper with the ledger. We do not disclose your information to third parties, and we re not dependent on other companies or financial institutions. We use only our own funds to create PlasBit, and we never promoted or asked for investments or fundraising. Our manifesto is clear: We want to liberate individuals from the grip of the banking system and governmentBanks can leverage these security features to protect sensitive data and prevent fraud.End-to-end encryption and two-factor authentication are also common security measures employed in the crypto space that banks are adopting.

Financial Inclusion

Bitcoin and other cryptocurrencies have the potential to bring financial services to underserved populations. Get a FREE Trial to my private community at - use the code BEYONDBROKE1MO at checkout. XRP Ripple News, global eventsMany people around the world lack access to traditional banking services.Cryptocurrencies can provide a means for them to participate in the global economy.Banks recognize the potential for financial inclusion and are exploring ways to offer crypto-based services to a wider range of customers.

The Regulatory Landscape: A Global Perspective

The regulation of Bitcoin and other cryptocurrencies varies significantly across different countries. For instance, in 2025, the Hong Kong Monetary Authority issued guidance encouraging banks to provide banking services to regulated virtual asset service providers. Similarly, central banks in South Africa, Nigeria and the United Arab Emirates have issued guidance for banks to manage financial integrity risks when engaging with the crypto ecosystem.Some countries have embraced cryptocurrencies and are actively developing regulatory frameworks to support their growth.Others have taken a more cautious approach, imposing strict regulations or even banning cryptocurrencies altogether.The evolving regulatory landscape presents both opportunities and challenges for banks looking to enter the crypto space.

United States

In the U.S., the regulatory landscape for cryptocurrencies remains somewhat fragmented.Multiple agencies, including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Treasury Department, have a role in regulating the crypto industry.The Financial Innovation and Technology for the 21st Century Act (FIT21) is a major piece of legislation aimed at providing clarity and establishing a comprehensive regulatory framework for digital assets.

The SEC vs CFTC debate continues, with both agencies vying for regulatory authority over different aspects of the crypto market.This regulatory uncertainty has created challenges for banks seeking to offer crypto-related services.However, the Federal Reserve's decision to withdraw supervisory letters requiring banks to seek advance approval for crypto activities suggests a more open approach to bank involvement in the crypto space.

European Union

The European Union has taken a proactive approach to regulating cryptocurrencies with the implementation of the Markets in Crypto-Assets Regulation (MiCA).MiCA provides a comprehensive framework for regulating crypto-assets that are not already covered by existing financial services legislation. We make every effort to ensure our content is factually accurate, comprehensive, and informative. We do this by: Ensuring author integrity: All our authors are well-versed in the crypto sector. Our team adheres to strict ethical and editorial standards to ensure we publish high-quality, unbiased content.The goal of MiCA is to protect consumers, promote innovation, and ensure financial stability.

MiCA sets clear rules for crypto-asset issuers, crypto-asset service providers, and stablecoins.It also establishes requirements for transparency, governance, and cybersecurity. Institutions like CoinPayments, Coinbase and Binance offer many of the same benefits as challenger banks, but with additional features that come with the use of blockchain technology. They provide greater security, faster transaction times, and a range of financial products comparable to traditional banks.MiCA is expected to provide a level playing field for crypto businesses operating in the EU and encourage innovation while mitigating risks.

Asia

Asia presents a mixed picture in terms of cryptocurrency regulation. These crypto banks differ from a standalone wallet in that they offer federally insured bank accounts, prepaid debit cards and a cryptocurrency wallet. In addition, crypto banks are usually regulated. Do banks invest in crypto? Some banks may be investing in crypto but not to any degree that merits disclosure statements as of this writing.Some countries, such as Hong Kong, are actively positioning themselves as hubs for digital asset innovation, with regulations aimed at facilitating retail trading and attracting crypto businesses.Others, such as China, have taken a much stricter approach, banning cryptocurrency exchanges and mining activities.

The varying regulatory approaches in Asia reflect the different priorities and risk appetites of individual countries. It also encourages banks and large financial institutions to participate in the crypto market. In contrast, ambiguous or harsh regulations might drive businesses away or end innovation. Is Cryptocurrency Legal and Regulated? Yes, cryptocurrency is regulated and legal in many nations, although the regulations are not uniform in all of them. InHowever, there is a growing recognition of the potential benefits of blockchain technology and the need for clear and consistent regulations to foster innovation and protect consumers.

Examples of Regulatory Approaches

1. Hong Kong: Actively promoting itself as a crypto hub with regulations supporting retail trading.
2. China: Strict ban on cryptocurrency exchanges and mining.
3. United Arab Emirates: Issuing guidance for banks to manage financial integrity risks when engaging with the crypto ecosystem.
4. South Africa & Nigeria: Also issuing guidance for banks.

How Banks are Navigating the Crypto Landscape

Despite the regulatory uncertainties, banks are finding ways to engage with the crypto ecosystem.Some banks are offering custody services for cryptocurrencies, while others are exploring the use of blockchain technology for payments and other financial services.A growing number of banks are also investing in crypto startups or partnering with crypto companies to gain access to expertise and technology. Likewise, selling bitcoin is simple. To do so, you will need to place an order and specify the amount of bitcoin you wish to sell and the price you are willing to sell it for. Once your order is executed, you will receive the payment in your linked bank account or credit card. Bitcoin s advantages and disadvantagesThe strategy varies, but the overall trend points to increasing bank involvement in the crypto space.

Custody Services

Custody services involve securely storing and managing cryptocurrencies on behalf of clients.Several banks, including some of the largest financial institutions in the world, are now offering custody services for Bitcoin and other digital assets.This allows institutional investors and high-net-worth individuals to invest in cryptocurrencies without having to worry about the technical complexities of managing their own private keys.

Blockchain-Based Payments

Banks are also exploring the use of blockchain technology to improve the efficiency and transparency of payments. But, unlike Bitcoin, which has no central controlling body, CBDCs are made, distributed and monitored by governments and their central banks. CBDCs offer benefits such as faster, easier and moreBlockchain-based payment systems can enable faster and cheaper cross-border payments, reduce fraud, and improve compliance.Some banks are even developing their own stablecoins, which are cryptocurrencies pegged to a stable asset like the U.S. dollar, to facilitate payments and other financial transactions.

Investment and Partnerships

Many banks are investing in crypto startups or partnering with crypto companies to gain access to new technologies and expertise.These investments and partnerships allow banks to stay ahead of the curve and explore new business opportunities in the crypto space.By working with innovative crypto companies, banks can accelerate their own adoption of blockchain technology and offer new products and services to their customers.

Examples of Banks Engaging with Crypto

• Offering custody services: Providing secure storage for cryptocurrencies.
• Exploring blockchain-based payments: Improving payment efficiency and transparency.
• Investing in crypto startups: Gaining access to new technologies and expertise.
• Partnering with crypto companies: Accelerating adoption of blockchain technology.

The Future of Finance: A Hybrid Approach?

The future of finance is likely to be a hybrid approach that combines the best aspects of traditional banking and decentralized finance (DeFi).Banks will continue to play a vital role in providing regulated and secure financial services, while cryptocurrencies and blockchain technology will offer new opportunities for innovation and financial inclusion.The key will be to find the right balance between regulation and innovation, allowing the crypto ecosystem to thrive while mitigating risks and protecting consumers.

Regulation and Innovation

Regulation is essential for fostering trust and stability in the crypto market. BCBS is the primary global standard-setting body for prudential bank regulation, which has developed a framework to govern the exposure of banks to crypto assets. Financial Stability Board (FSB) The FSB contains the regulatory, supervisory, and oversight recommendations for crypto-asset markets which establishes high-level global standards forHowever, overly restrictive regulations can stifle innovation and drive businesses away. What we are seeing now is renewed interest in digital assets from banks across the board from credit unions and community banks to midsize and regional players to Wall Street giants. BTCThe challenge for regulators is to strike the right balance, creating a framework that protects consumers and prevents illicit activities without hindering the growth of the crypto ecosystem. The Federal Reserve said it was withdrawing a pair of supervisory letters stipulating that banks should seek advance approval from regulators before engaging in crypto-asset and stablecoin activities.Ambiguous or harsh regulations might drive businesses away or end innovation, as seen in the different approaches of countries like China and Hong Kong.

Collaboration and Education

Collaboration between banks, crypto companies, and regulators is crucial for shaping the future of finance.By working together, these stakeholders can develop clear and consistent regulations, share best practices, and promote innovation. Major, regulated currencies such as the euro or U.S. dollar tend to be fairly stable and backed by a government. Conversely, cryptocurrencies are extremely volatile for a couple of reasonsEducation is also essential for raising awareness of the benefits and risks of cryptocurrencies and blockchain technology.Informed consumers are better equipped to make sound financial decisions and participate in the crypto market responsibly.

CBDCs vs.Cryptocurrencies

Central Bank Digital Currencies (CBDCs) are another potential development in the future of finance.CBDCs are digital currencies issued and backed by central banks. Bitcoin has been hailed as an invention that has the potential to change the world. For over 25 years, cryptographers and innovators have been trying to come up with a secure and decentralized working digital currency, but none succeeded until the invention of Bitcoin. So what makes BitcoinWhile they share some similarities with cryptocurrencies, they are fundamentally different in that they are centralized and controlled by governments. The SEC s SAB 121 had created a punitive framework that effectively prevented US banks from offering custody services for bitcoin and other cryptocurrencies, said Mark Palmer, an equityThe emergence of CBDCs could have a significant impact on the crypto market, potentially competing with cryptocurrencies for adoption and usage.

Key Takeaways: Navigating the Evolving Landscape

The relationship between banks and Bitcoin is evolving, with banks recognizing the potential benefits of blockchain technology while advocating for regulation to mitigate risks.The future of finance is likely to be a hybrid approach that combines the best aspects of traditional banking and decentralized finance.To navigate this evolving landscape, it is essential to understand the key takeaways:

• Banks want regulation to manage risks and protect consumers.
• Banks see the benefits of blockchain technology, including efficiency, transparency, and security.
• The regulatory landscape for cryptocurrencies varies significantly across different countries.
• Banks are engaging with the crypto ecosystem through custody services, blockchain-based payments, investments, and partnerships.
• Collaboration between banks, crypto companies, and regulators is crucial for shaping the future of finance.

The call for regulation isn't necessarily a negative thing. Banks have suggested to the Fed that they should regulate Bitcoin, but it was the other things said during the meeting that should interest us 642 Total views COINTELEGRAPH IN YOUR SOCIAL FEEDIt can lead to greater adoption and trust in the long run. How is cryptocurrency regulated? No defined regulation is used to regulate cryptocurrency in the U.S. as of 2025. However, a major crypto legislation was introduced in 2025, i.e. the Financial Innovation and Technology for the 21st Century Act (or FIT21), that has been passed by the U.S. House of Representatives but has not yet been enforced.As the crypto market matures, and as regulations become clearer, banks will likely become even more involved, offering a wider range of crypto-related services to their customers.This ultimately benefits everyone by bringing more stability and security to the digital asset space.Now is the time to understand and adapt to these changes.What you do with that knowledge is up to you.Consider exploring regulated avenues for investing in crypto, and always prioritize security when handling your digital assets.