Disruption of Traditional Banks
The potential for technology companies like Visa and Mastercard to use stablecoins to remove issuer and receiver banks from the transaction loop, capturing their higher profit margins.
First Mentioned
9/19/2025, 1:08:32 AM
Last Updated
9/19/2025, 1:18:38 AM
Research Retrieved
9/19/2025, 1:18:38 AM
Summary
The disruption of traditional banks is a multifaceted phenomenon primarily driven by advancements in blockchain technology, the increasing adoption of digital assets, and the broader FinTech landscape. Key figures like Anatoly Yakovenko, CEO of Solana Labs, emphasize the transformative potential of stablecoins, particularly with supportive legislation like the Genius Act, which is predicted to unlock trillions in stablecoins, stimulate demand for US Treasuries, and facilitate the global export of American finance. This disruption is further fueled by growing institutional interest, exemplified by BlackRock building on Solana and Nasdaq exploring securities tokenization. Payment giants such as Visa and Mastercard are also strategically positioned to leverage stablecoins, posing a significant challenge to conventional banking models. Beyond financial innovation, the banking sector faces technological hurdles, including the looming threat of quantum computing to existing cryptography, necessitating a proactive shift towards quantum-resistant solutions, potentially spearheaded by tech titans like Google and Apple. This evolving environment forces traditional banks to adapt through digital transformation, collaboration with FinTechs, and innovation to maintain competitiveness and profitability.
Referenced in 1 Document
Research Data
Extracted Attributes
Key Enablers
Legislation (Genius Act, CLARITY Act), Growing institutional interest
Major Threat
Quantum computing to current cryptography
Primary Drivers
Blockchain technology, Digital assets, Stablecoins, FinTech innovation
Key Technologies
Blockchain, Stablecoins, Quantum-Resistant Cryptography
Role of Tech Giants
Potential leaders in quantum-resistant cryptography adoption (Google, Apple)
Responses from Banks
Collaborating with/acquiring FinTech startups, Enhancing digital capabilities, Embracing innovation
Opportunities Created
Global export of American finance, Enhanced risk management in DeFi
Role of Payment Giants
Well-positioned to leverage stablecoins (Visa, Mastercard)
Impact on Traditional Banks
Increased competition, Reduced profitability, Need for digital transformation, Disintermediation, Reshaping business models
Timeline
- Advancements in blockchain technology and increasing adoption of digital assets drive the disruption of traditional banks. (Source: Summary)
Ongoing
- Growing institutional interest in crypto, with companies like BlackRock building on Solana and Nasdaq exploring tokenization of securities. (Source: Summary, Document 520d6fc4-8878-4787-8e39-4c24417ef6c7)
Ongoing
- FinTech disruption leads to increased competition, driving efforts for differentiation and customer-focused services in the banking sector. (Source: Web Search Results)
Ongoing
- Traditional banks respond to FinTech disruption by collaborating with or acquiring FinTech startups to enhance digital capabilities. (Source: Web Search Results)
Ongoing
- Legislation like the Genius Act is expected to unlock trillions in stablecoins, creating significant demand for US Treasuries and facilitating the global export of American finance. (Source: Summary, Document 520d6fc4-8878-4787-8e39-4c24417ef6c7)
Future (predicted)
- A breakthrough in quantum computing, potentially accelerated by AI, threatens current cryptography, necessitating a proactive migration to quantum-resistant solutions. (Source: Summary, Document 520d6fc4-8878-4787-8e39-4c24417ef6c7)
Future (predicted)
- More than half the world's population is expected to be using digital wallets, transforming how people save, spend, and send money across borders. (Source: Web Search Results)
2026 (predicted)
Web Search Results
- [PDF] Fintech Disruption: Implications for Traditional Banking and ...
traditional banking institutions to adapt to changing market dynamics or face the risk of being left behind (Fintech Innovation and Disruption in Traditional Banking, 2024). This disruption has led to increased competition within the sector, driving efforts for differentiation and customer-focused services (Faour, 2023). Banks are responding to fintech disruption by collaborating with or acquiring fintech startups to enhance their digital capabilities (Abouraia, [...] remain competitive in a dynamic financial landscape. 3.5. Profitability Fintech disruption has been proven to have a significant impact on the profitability of traditional banking institutions. Research shows that developments in financial technology have had a continuous and disruptive influence on various aspects of traditional banking business (Wu, 2023). Specifically, fintech credit is associated with reduced bank profitability [...] sector, which could result in increased costs for banks and potentially affect their profitability and risk levels (Wang, 2024). In conclusion, fintech's disruptive impact on traditional banking and financial institutions is undeniable, with its ability to drive operational efficiencies, reshape business models and change market dynamics. As fintech continues to evolve, traditional banks must embrace innovation, adapt to changing customer demands, and leverage technology to
- Impacts of FinTech funding announcements on traditional banks
The Digital Capital Raising sector, encompassing equity crowdfunding platforms and initial coin offerings (ICOs), similarly disrupts traditional banking roles in capital markets (Sanga & Aziakpono, 2023). These FinTech platforms democratize access to capital by enabling businesses to raise funds directly from a broad base of investors, bypassing conventional banking intermediaries. Funding announcements for these FinTechs may indicate a shift in the capital-raising landscape, suggesting that [...] The compounded effects of increased competition, disruptive innovation, and substantial financial backing within the FinTech sector highlight the pressing challenges faced by traditional banks. Beyond direct financial competition, there are broader implications for the perceived leadership and strategic agility of these institutions. If traditional banks are perceived as resistant to digital transformation and slow to implement agile business models, investor confidence in their strategic [...] pressures on traditional banks. As FinTech continues to attract considerable investment and expand its influence, it poses a formidable challenge to incumbent banks, with the potential to disrupt their business models and erode market share (Drasch et al., 2018).
- Adapting to digital wallet disruption in retail banking - Infosys BPM
The future of banking may soon be entirely different from the traditional banking we experience today. By 2026, more than half the world's population will be using digital wallets, transforming how people save, spend, and send money across borders. Digital wallets are undeniably reshaping the retail banking sector, compelling traditional banks to rethink their strategies. As fintech disruption continues to evolve, retail banking institutions must navigate this shift to remain relevant and [...] The entrance of tech giants into financial services has further intensified competition. By offering compelling financial products, these big players are eroding the traditional role of banks as intermediaries in payment transactions, pushing banks to innovate or risk disintermediation. Navigate retail banking disruptions with AI, ML, RPA, and analytics | Learn how! ## Retail banking's response to the digital wallet boom [...] While digital wallets pose a significant disruption, retail banks are not passive observers. Many financial institutions are embracing digital transformation strategies to stay competitive. Key responses include: ### Enhancing mobile banking capabilities
- Banking Evolution: How to Take on the Challenges of FinTech
## Will FinTech startups replace traditional banks? Fintech startups, businesses specializing in financial technology, are disrupting the financial industry in big ways. They have several advantages that allow them to be more innovative and deliver services to customers more quickly and cost-effective than traditional banking institutions. It’s left people wondering if it means the end of traditional banking. [...] It’s highly unlikely that FinTech startups will replace traditional banks for a number of reasons. First, consumers still trust banks over startup companies to responsibly hold their money. Banks have decades of trust built through customer relationships and FinTech startups will have to be patient and earn customer trust over time. Another factor to consider is the important exchange between banks and FinTech startups through partnering with one another. Banks gain technology and insights
- The legal impact of digital wallets on traditional banking system
Moreover, digital wallets challenge the traditional banking model by reducing the reliance on brick-and-mortar branches and bypassing certain banking intermediaries. This has led to a decline in transaction fees for traditional banks and forced them to i nnovate digitally or risk losing market share. From a legal standpoint, this shift demands updated regulatory approaches to ensure a level playing field. Laws originally crafted for traditional banks may not fully address the risks and [...] The emergence of digital wallets has significantly impacted the traditional banking system, reshaping the legal landscape in ways that challenge regulatory frameworks and longstanding banking practices. Digital wallets, which allow users to store, send, and receive money electronically via smartphones and other devices, have introduced a level of convenience and accessibility that traditional banks are now pressured to match. Legally, this shift raises important questions about financial