Digital assets are genuinely useful. You can use them to escape monetary debasement, or to send money halfway across the world in a fraction of a second, or even to trade oil futures on the weekend, when traditional markets are closed.
And yet, almost 18 years after Bitcoin’s inception, few people actually use them in their day-to-day life. Almost nobody in America directly opens up a stablecoin app to pay for groceries. We all prefer the cards issued by our bank. The crypto world still feels like a completely separate ecosystem; a laboratory of innovation and speculation, yes, but not a practical solution to day-to-day financial tasks, the way that banking is.
The crypto sphere has long been aware of this gap (thus the fixation with mainstream adoption). But for a long time, the gap felt tolerable because industry leaders spoke about replacing banks altogether.
It’s now clear to everyone that this isn’t going to happen. Banks are here to stay. We’re not going to convince the vast majority of the population to abandon their bank accounts and start self-custodying their digital currencies and assets.
Instead of trying to lure people away from their banks, the digital asset industry should focus on integrating within infrastructure that is already used and trusted. Debit cards, payroll deposits, merchant points of sale, mortgages, insurances, stocks—you name it. There aren’t many financial instruments that wouldn’t benefit from blockchain technology.
Put differently, the two tracks, banking and crypto, need to stop running parallel to each other, and really mix together. Soon, the distinction won’t be between banks and crypto firms, but between the companies that have properly integrated the capabilities of both, and those who haven’t.
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What the Banks Do Right
Why are banks so durable? Because our lives revolve around a small set of financial responsibilities. We have to receive our paychecks, pay our bills and taxes, send money to relatives, collect insurance, manage our savings. Banks are in the middle of all of that.
Even crypto holders—consumers that prefer to use digital assets—need banks to enter and exit the blockchain ecosystem. The world of digital assets likes to describe itself as an alternative system, but you can’t really access it without passing through banks.
You can’t fault the banks. They’ve earned this position by solving real-life problems over decades and centuries. Even today, one of the safest ways to protect yourself from fraud and theft is to have a checking account. You can call someone if something goes wrong; you can even show up at a bank branch. And the checking account helps you with all kinds of small things like recurring payments and overdraft management—not to mention that you can easily access and spend that money with debit cards and ATMs. It’s not glamorous, but it’s a remarkable system, and it works well enough for people to trust banks with their hard-earned paychecks.
So it’s a mistake to think of banks as an obstacle around which digital assets must route. Better to think of the ways in which blockchain technology can enhance the banking experience. Keep all of the existing conveniences but add new advantages on top, like near-instant settlement, 24/7 access and programmability.
Crypto Is Not Going to Replace Banking Outright
The crypto world’s most grandiose aspiration—to do away with banks altogether—is not going to materialize. It’s just a fact. The market has been speaking for 18 years.
Instead of banks disappearing and consumers self-custodying all of their assets, we’ve seen banks begin to integrate blockchain infrastructure within their own offerings. Consumers continue to rely on the institutions they trust, and the rise of wrench attacks in all corners of the world illustrates the inherent limits of the crypto sphere’s original dream.
The truth is that consumers don’t want two separate financial lives. What use are digital assets, really, if all of their crucial financial undertakings end up occurring on the banking level? What’s the point of shuffling funds back and forth between a bank account and a crypto wallet? Why can’t it all stay under one roof?
Stablecoins demonstrate that problem quite well. Yes, they are cheaper to use than credit cards, they settle instantly, and they can send money across the world 24/7. But as long as stablecoin users have to convert their money back into dollars or euros every time they want to participate in the real economy, there’s never going to be real adoption of these financial products.
Convenience beats ideology. People choose financial products that make their lives easier. The vast majority of people don’t care if a given service is decentralized or not—they just need to know whether or not it works. That’s it. So the success of digital assets doesn’t depend on convincing people that decentralized finance is philosophically or even morally superior; they just need to make everyday tasks simpler.
What the Future Looks Like
It seems obvious that the financial platforms that will find success over the next decade will be the ones that integrate banking services alongside blockchain technology (and, frankly, AI tools, as well). They will be financial super apps, and they will be the primary interface through which people handle every aspect of their financial lives.
But it’s anyone’s guess which companies will actually emerge as such super apps. They may be banking incumbents, or they may be crypto upstarts. Or something else altogether. Elon Musk’s platform, X, is in the lead to become such a business, and it started off as simply social media.
One thing is for sure: if crypto companies don’t evolve, they’ll end up as infrastructure providers for banks, which will keep a tight grip on customer relationships. If digital assets firms want to really have a chance at mass adoption, they need to take more than a page out of the banking sector’s book.
Ron Tarter is the co-founder of RockWallet and MNEE App, a fully licensed digital asset platform built for people who want to navigate the crypto economy with confidence.