Navigating Crypto: What Banks Need to Offer Digital Assets

Who wrote it, and why that matters

The paper was written by the consulting firm Oliver Wyman and commissioned by Ripple, a company that sells crypto liquidity and payments technology to financial institutions. Its foreword is signed by Ripple executives and promotes a Ripple product. None of that makes the data wrong, but it means the framing, that banks should build crypto services, aligns with the sponsor’s commercial interest. We include it because the underlying numbers and capability list are useful, and we flag the context so you can weigh them.

Definitions the paper uses

Cryptoassets are assets on permissionless blockchains, including cryptocurrencies, governance tokens, stablecoins and NFTs. Digital assets is the broader group that also covers tokenised securities and central bank digital currencies. Stablecoins are privately issued tokens pegged to a currency and backed by liquid assets; the paper cites a market capitalisation near $180 billion for the top five. DeFi means smart-contract protocols offering lending, borrowing and market making, while CeFi refers to crypto-native intermediaries that run those services in a traditional, company-led way. (Our glossary defines these terms in more detail.)

The demand argument

The paper estimates cryptoassets had grown into a market of over $1 trillion with roughly 300 million verified owners in 2021, with the number nearly doubling each year since 2016. It cautions that growth could slow because of regulation, protocol vulnerabilities, a security incident at a major exchange or a steep price fall. Adoption is widely spread: the largest populations of owners are in India, the United States, Russia, Nigeria and Brazil, on five different continents.

Despite the early ideology of cutting out intermediaries, most customers still have to leave their bank to use crypto. A typical journey means choosing an exchange, opening an account, passing identity and anti-money-laundering checks and transferring money in. Surveys cited in the paper suggest strong interest in doing it through a bank: a 2021 Visa study of over 6,000 adults found nearly 90% of active owners and 81% of passive owners were interested, and an additional survey found 70% of 2,000 American adults would consider owning crypto through their bank. From these, the authors estimate 45 to 65 million US customers want bank-based access, up to 45 million of whom do not currently own any.

Five capability areas

Nine of the ten largest US banks had expressed an intention to offer some form of crypto access, yet actual offerings were limited, mostly exchange-traded products for wealthy clients. The paper explains why by listing five requirement areas:

Strategy. Decide whether to serve a niche or take a wide role in the digital-asset economy. The paper notes that transactions on centralised crypto exchanges could cost customers up to 200 basis points, versus dozens on retail foreign exchange and under one for institutional foreign exchange, so margins may attract providers if costs are managed.

Technology. Capabilities may include access to trading venues, settlement, custody, wallet interfaces, on-chain analytics, banking product infrastructure and services such as KYC/AML checks, tax reporting and market data.

Organisation. Teams, skills and governance to run a new line of business.

Risks and regulation. Compliance, operational and reputational risks, and regulatory uncertainty.

Delivery. Getting products to customers through existing channels.

The authors expect most banks other than the very largest to rely on service providers, who handle complexity and compliance so the bank can focus on strategy.

How to read it critically

Surveys show interest, not necessarily purchases, and the paper itself lists reasons growth could stall. The 2022 context also matters: crypto prices fell sharply during that year, and the regulatory and market picture has shifted since. For current data on projects, see our ecosystem hub. For the public-sector counterpart to this private-sector story, see our digital shekel article.