What Event Made Cryptocurrency More Appealing to Mainstream Banks and Large Companies?

The significant increase in the appeal of cryptocurrencies to mainstream banks and large corporations is primarily attributed to a series of key developments, with the most landmark event being the successful launch of US Spot Bitcoin Exchange-Traded Funds (ETFs) in 2024. This event not only provided traditional financial institutions and investors with a compliant and convenient channel for cryptocurrency investment but also marked an important step in the integration of cryptocurrencies with the mainstream financial system. Centered around this core event, the gradual clarification of the regulatory environment, institutional adoption of stablecoins, active expansion of crypto services by banks, and the rise of Real-World Asset (RWA) tokenization have collectively driven and deepened this trend, moving cryptocurrencies from the periphery towards the center of the financial stage.

Detailed Report

The Launch of US Spot Bitcoin ETFs: A Turning Point

The approval of Spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) in 2024 is widely regarded as a decisive milestone in the history of cryptocurrency development, significantly enhancing its appeal to mainstream financial institutions.

Background and Impact Previously, mainstream financial institutions and large corporations had concerns regarding compliance, security, and operational complexity when it came to directly investing in and holding cryptocurrencies. The launch of Spot Bitcoin ETFs provided these institutions with a convenient channel to access Bitcoin within the existing regulated financial framework. Investors can indirectly invest in Bitcoin by purchasing ETF shares through traditional brokerage accounts, without needing to manage private keys themselves or open accounts on cryptocurrency exchanges. This development not only lowered the entry barrier for institutions but also significantly boosted the legitimacy and market confidence in Bitcoin as an investable asset class. Cryptocurrency exchanges like Coinbase also benefited from their custodial roles in these ETFs and are anticipated to be included in mainstream indices like the S&P 500, further evidencing the industry's mainstream adoption.

Capital Inflows and Market Reaction Upon their launch, Spot Bitcoin ETFs attracted substantial institutional capital. For instance, BlackRock's iShares Bitcoin Trust (IBIT) garnered billions of dollars in inflows shortly after its introduction, becoming one of the largest Bitcoin ETFs in the market. By the end of 2024, the total amount of Bitcoin held in ETF products had surpassed 1.1 million coins. This strong capital inflow not only propelled Bitcoin's price to new highs between 2024 and 2025, at one point exceeding $100,000, but also fostered positive sentiment across the entire cryptocurrency market. Analysts predict that continued growth in institutional demand could push Bitcoin beyond $200,000 in 2025.

The following table summarizes the early performance of some US Spot Bitcoin ETFs:

Evolution of the Regulatory Environment and Policy Support

Complementing the launch of ETFs is the gradual clarification of the global regulatory environment, which is crucial for attracting cautious traditional financial institutions.

Trend Towards Regulatory Clarity In recent years, particularly moving into 2025, several major economies worldwide, including the US, EU, UK, Japan, and Hong Kong, have been actively promoting or have already introduced regulatory frameworks for cryptocurrencies and stablecoins. For example, the US government demonstrated a more proactive stance in 2025, pushing for the formulation of stablecoin and cryptocurrency regulation bills, with the policy mainline shifting from previous strict restrictions to "supporting innovative and compliant development". US President Trump also expressed a friendly attitude towards the crypto industry and signed executive orders intending to establish a "strategic Bitcoin reserve". This regulatory certainty helps reduce compliance risks for institutional investors, encouraging more active market participation.

Policy Shift Towards Supporting Innovation Regulatory bodies in some countries and regions are not only focusing on risk prevention but also beginning to emphasize support for fintech innovation. For instance, US financial regulators in 2025 rescinded previous prior notification/approval requirements for banking institutions to engage in cryptocurrency business, allowing banks to autonomously conduct legally permissible cryptocurrency activities, provided they manage risks effectively. Hong Kong also passed the "Stablecoin Bill," aiming to provide a clear legal basis for stablecoin issuance and operation. These policy shifts have paved the way for traditional financial institutions to enter the crypto space.

Increasing Institutional Adoption and Application of Stablecoins

Stablecoins, serving as a bridge between traditional fiat currencies and the crypto world, are increasingly valued by mainstream institutions for their application in payment and settlement.

Significant Improvement in Payment and Settlement Efficiency Based on blockchain technology, stablecoins can achieve near-instantaneous peer-to-peer payments and settlements, greatly improving efficiency and reducing costs, especially in cross-border payments. Traditional cross-border remittances can take several business days, whereas stablecoin payments are typically completed within an hour, with significantly lower transaction costs. Visa's monitoring data shows that as of April 2025, the stablecoin market size exceeded $220 billion, with 1.4 billion adjusted stablecoin payment transactions and a transaction volume of $6.7 trillion over the past 12 months.

Participation of Mainstream Payment Institutions and Banks Large payment companies like PayPal launched their USD stablecoin, PayPal USD, as early as 2020 and continue to expand its payment scenarios. Visa and Mastercard have also partnered with cryptocurrency exchanges to launch debit cards allowing users to spend cryptocurrencies and stablecoins. Furthermore, mainstream banks like JPMorgan Chase have not only launched their own stablecoins (e.g., JPM Coin) but also utilize their blockchain platforms (e.g., Kinexys) to provide corporate clients with efficient cross-border payment and foreign exchange settlement services, with daily transaction volumes already exceeding $2 billion. Banks such as Standard Chartered, Brazil's Itau Unibanco, and Japan's Sumitomo Mitsui are also exploring or planning to issue their own stablecoins. This institutional-level adoption is transforming stablecoins from peripheral payment tools into important components of the global payment system.

Active Participation and Service Expansion by Traditional Financial Institutions

Beyond ETFs and stablecoins, mainstream banks and financial institutions are actively positioning themselves in cryptocurrency services through various means, deepening their integration with the crypto market.

Providing Diversified Cryptocurrency Services Since the second half of 2024, an increasing number of banking institutions have begun offering cryptocurrency-related services, including crypto trading and custody for retail and institutional clients, as well as collaborating with stablecoin issuers for payments and collections. For example, Hong Kong virtual bank ZA BANK offers cryptocurrency trading services to retail users; Dubai's Emirates NBD and European bank Bunq have also launched cryptocurrency trading platforms. The Bank of New York Mellon has expanded its services to stablecoin issuer Circle. These initiatives significantly enhance the liquidity of cryptocurrency trading and provide secure entry points for institutional investors.

Utilizing Blockchain to Upgrade Financial Infrastructure Banking institutions not only view cryptocurrencies as a new asset class but also recognize the potential of their underlying blockchain technology in transforming existing financial infrastructure. In addition to JPMorgan's Kinexys platform, Switzerland's Taurus has launched Taurus-NETWORK, an interbank digital asset trading platform connecting global financial institutions, supporting automated collateralized lending and real-time settlement of digital assets. Standard Chartered has partnered with OKX to accept institutional clients' cryptocurrencies and tokenized assets as collateral for OTC transactions.

The Rise of Real-World Asset (RWA) Tokenization

Real-World Asset (RWA) tokenization is another significant trend in the convergence of cryptocurrencies and traditional finance, attracting the attention of numerous large financial institutions.

Enhancing Asset Liquidity and Transaction Efficiency RWA refers to the process of converting valuable real-world assets (such as real estate, bonds, equity, art, carbon credits, etc.) into digital tokens using blockchain technology. Tokenization can significantly reduce transaction costs, improve transaction efficiency, enhance transparency, and reduce settlement risks.

Rapid Market Growth and Institutional Positioning The RWA market has grown rapidly in recent years. In the 12 months leading up to April 2025, the RWA market size, excluding stablecoins, doubled to over $22 billion. McKinsey predicts that the market size of tokenized financial assets could reach $2 trillion by 2030. Asset management giants like BlackRock, Franklin Templeton, and Singapore's Invesco have launched tokenized fund products. Regulatory sandbox projects such as the Monetary Authority of Singapore's Project Guardian and the Hong Kong Monetary Authority's Project Ensemble are also actively exploring RWA applications and regulation. The involvement of traditional financial giants like Goldman Sachs and JPMorgan Chase indicates that RWA will gradually change the landscape of financial markets.

Continued Growth in Corporate and Institutional Investment

With market maturation and the availability of compliant channels, corporate and institutional investors' interest in cryptocurrencies is growing.

Corporations Incorporating Bitcoin into Reserve Assets Publicly traded companies, exemplified by MicroStrategy, began incorporating Bitcoin as their primary treasury reserve asset since 2020 and have continued to increase their holdings. This strategy has not only yielded considerable returns for these companies but also signaled to the market that Bitcoin can serve as a long-term store of value, encouraging other corporations to follow suit. Statistics show that the number of publicly traded companies holding Bitcoin increased by 17.91% quarter-over-quarter in Q1 2025.

Steady Inflow of Institutional Capital In addition to indirect investment through ETF products, many institutional investors, such as pension funds, hedge funds, and sovereign wealth funds, have begun to directly or indirectly allocate to crypto assets. For example, some US state pension funds have started investing in Bitcoin ETFs. Sovereign wealth funds from countries like France, Norway, Saudi Arabia, and Singapore are also increasing their investments in cryptocurrencies. This inflow of institutional capital provides greater stability and depth to the crypto market.

In summary, while the launch of US Spot Bitcoin ETFs was a landmark catalyst, the increased appeal of cryptocurrencies is the result of a combination of factors. These include regulatory advancements, the enhanced utility of stablecoins, active participation by traditional financial institutions, the potential of RWA tokenization, and sustained growth in institutional investment. These elements are collectively driving the accelerated integration of cryptocurrencies from a niche market into the mainstream financial system.

Sources

• Vox: Crypto failed Black investors — and so has banking

• Columbia Journalism Review: The Lessons of Crypto Media

• TRM Labs: Illicit Crypto Ecosystem Report

• Times of India: The crypto industry saw Trump as a champion. Some now fear he's putting personal profits first

• Department of Financial Services: Twitter Investigation Report

• OCC: OCC Clarifies Bank Authority to Engage in Crypto-Asset …

• BlackRock: Cryptocurrency decoded: Investing in digital assets

• City National Bank: Bitcoin Risks and Opportunities

• CoinLedger: The 12 Best Crypto News Websites in 2025

• Bloomberg: Crypto Might Get Some Banks