The conversation around the GENIUS Act, which was signed into law by President Trump a couple weeks ago, centered on the banks entry into the stablecoin market.
This is, however, a natural extension of what is already taking place. Blockchain and crypto is nothing new for the major banks, in spite of the fact the leaders of many of these institutions publicly panned the asset class.
With the pending expansion of tokenization, it is safe to conclude banks will also be at the forefront of that too.
For all the talk about remaking the financial system, the large institutions are still throwing their weight around. It shows how the decentralized industry will have to do a lot more to take market share.
Banks Invested Over $100B In Blockchain Since 2020
Since 2020, the largest banks in the world invested more than $100 billion in blockchain startups. This is according to a report that was issued, in part, by Ripple.
Citigroup, JPMorgan Chase, Goldman Sachs and Japan’s SBI Group have emerged as the most active players in traditional finance backing blockchain startups, according to a new report by Ripple in partnership with CB Insights and the UK Centre for Blockchain Technologies.
This is not something that was publicized nor did it make the media rounds. Banks invest in new financial technologies regularly, so missing the story is not a surprise.
That said, we have to look at the size of some of these investments to realize that the banking sector around the world rivaled Silicon Valley with the numbers.
It is also something that is global since the US, Japan, France, and Singapore were involved.
Mega-rounds, deals worth $100 million or more, were a key focus. Banks contributed to 33 such rounds during the four-year window, pouring capital into firms focused on trading infrastructure, tokenization, custody, and payment solutions.
We now have a situation where the banks quietly developed a massive amount of infrastructure. This means that laying crypto assets over the top is all that is required.
Going back to the funding, this reaches the biggest of the big:
Global Systemically Important Banks (G-SIBs), a group of financial institutions with such significant economic weight that their failure could trigger global financial instability, accounted for 106 deals, including 14 mega-rounds valued at over $100 million each.
Stablecoins and Tokenization
The banks ensure that stablecoin usage will explode. Most of the banks are likely to come out with their own stablecoins. Many have announced either plans for rollout or are, at a minimum, looking into the development.
We have a market cap of roughly $260 billion that will move into the trillions due to the sheer size and power of these institutions.
Other aspects of crypto are going to get a boost also. JPMorgan and Coinbase partnered to offer digital wallets to each Chase customer. This service will start either late 2025 or early 2026. The goal is to make the buying of crypto easier.
In addition to stablecoin expansion, we are about to embark upon the entry into real world assets being tokenized. The "tokenization of everything" is going to take off. We saw some early funds created, with varying degrees of success. Many of these were more trial projects than anything else.
With the banks already involved to the tune of $100 billion, we can see how they are not going to back off now. This was not funding money but, rather, an investment. These institutions want a payback. Since much of it was part of the foundation, we can bet the house they will build on top.
This is what Wall Street does.