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Evolving Relationship between Traditional Banks and Cryptocurrencies

The relationship between traditional banking institutions and cryptocurrencies has always been rather complicated. Before banks never used to embrace or support cryptocurrency platforms or projects, as these two industries are technically in direct competition. Many cryptocurrency projects are offering products or services similar to those of the banking industry, with one key difference. They are aspiring to be decentralized or peer-to-peer.

This means that these cryptocurrency projects are trying to offer to people all around the world a cheaper and faster alternative to the current financial system. A few years ago, banks could choose to ignore the crypto space. However, the explosive growth of dozens of cryptocurrency tokens in the past year pushed banks to at least partially join in by offering different types of products or creating partnerships in the crypto sphere.

Evolving Stances of JP Morgan, Goldman Sachs and Morgan Stanley

Only 3-4 years ago, the vast majority of the biggest investment banks, mainly in the US, were not very fond of cryptocurrencies. Jamie Dimon, CEO of JP Morgan has called Bitcoin a fraud in 2017. The same year CEO of Morgan Stanley, James Gorman, said that Bitcoin is getting more attention than it deserves, and that the cryptocurrency sector is a definition of a speculative investment. Only last year, Goldman Sachs listed 5 reasons why investors should not consider investing in Bitcoin and why this bank does not believe cryptocurrencies are a new asset class (Belvedere, 2019).

Fast-forwards to 2021 and all of these banks, and many others, are offering cryptocurrency products and services to their clients. For instance, only recently has JP Morgan opened a new crypto fund for all of its wealthy clients. This bank followed Morgan Stanley, which started offering this type of product to its clients in May of this year. The stance of Goldman Sachs can still be viewed as rather conservative though. On one hand, the bank started trading Bitcoin futures with Galaxy Capital in June this year; it is still issuing warnings against investing in cryptocurrencies (J.P. Morgan Opens Crypto Fund Access to All Wealth Clients, 2021).

One Bank to Rule Them All?

Of all the traditional banks that have changed their views about the cryptocurrencies, one bank seems to be the most eager to join the cryptocurrency space. And that is the oldest bank in America, Bank of New York Mellon (BNY Mellon). This bank has announced several crypto-related news only this year. For instance, only a week ago the bank stated that it is joining 5 other banks to help finance Pure Digital, the first cryptocurrency exchange solely led by banks ( Craig , 2021).

That is not the only step that this bank took towards cryptocurrencies. At the beginning of July, the bank specified that it will help Grayscale Investment, the biggest crypto management firm, not only in the creation of the Bitcoin ETF, but will also offer administrative services to Grayscale. In March of this year, BNY Mellon announced that it poured more than 130 million dollars into FireBlocks, a growing crypto management firm.

Moreover, BNY Mellon was one of the first banks to be offering custody services related to cryptocurrencies to its clients. With all these new announcements coming only in 7 months of this year, BNY Mellon is aiming to be the most active traditional bank in the crypto ecosystem. Yet, not all the banks have decided to be this progressive.

More Restrictions from UK Banks

While traditional US banks seem willing to join cryptocurrencies more than ever before, the same cannot be said about UK banks. At the beginning of July, Barclays and Santander blocked all the payments to Binance, one of the biggest cryptocurrency trading platforms. That means that the clients of these banks are not able to send or withdraw money from Binance to accounts held in those banks (Cavaglieri, 2021).

Moreover, the same approach was only recently taken also by neo-banking institutions like Monzo and Starling. The first bans of banks, however, came as soon as 2018, when Lloyds Banking Group stopped transfers from and to virtual currency payment systems via its credit cards.

The approach of traditional banks to cryptocurrencies has therefore never been more divided. While some are joining this emerging ecosystem with incredible pace, others are banning their clients from using it. Why are we witnessing this disparity between the approaches of these financial institutions?

Reasons for “Approach Disparity”

While different approaches by banks to its products and services are logical, such a huge gap between those that are slowly embracing cryptocurrencies and those that are strongly against it, are unprecedented. There can be thousands of reasons as to why this gap is widening. Here are just three of them that might help you understand why the approach of traditional banks towards crypto varies so much.  

The first reason is regulations. Regulations vary across the globe and the pressure from regulators in some parts of the world is becoming more crucial than ever. This can for instance be seen in China, but regulators from other countries such as Russia or Turkey also did not show a very positive stance towards cryptocurrencies. Furthermore, warnings from international institutions such as the International Monetary Fund, World Bank or Bank for International Settlement can, in combination with local authorities, make it really hard for banks to engage in the crypto sphere.

The second reason is very closely related to the first one. It seems that the disparity is somehow connected to location and thus political regimes. The differences between the approach of the US, China or UK have been mentioned in this article, but these also differ from the approach of African or South American countries. Therefore it seems that the approach towards crypto from traditional banks will be connected not only to the stance of international regulators, but also local authorities and policymakers.

The last reason for the disparities is a bit different. Many banks, including JP Morgan, Morgan Stanley or Goldman Sachs, have specified that they have decided to join the cryptocurrency world due to the pressure from their clients. The will to be exposed to crypto investment has been rising and these traditional banks have to satisfy that need of their clients. Therefore, one can only assume that traditional banks offering cryptocurrency products and services have something to do with the will of their investors to be exposed to cryptocurrencies. 


Belvedere, M. (2019, 12 20). Jamie Dimon’s infamous 2017 bitcoin takedown still serves as a warning as the decade winds down. Retrieved from CNBC:,called%20bitcoin%20a%20“fraud.”

J.P. Morgan Opens Crypto Fund Access to All Wealth Clients. (2021, 7 26). Retrieved from Fine News:

Craig , T. (2021, 7 21). BNY Mellon Adds to Crypto Activity with Pure Digital Bet. Retrieved from Crypto Briefing:

Cavaglieri, C. (2021, 7 20). Banks ban crypto payments over fraud spike. Retrieved from Which: