Banks and crypto could offer similar products in time: Bessent

Leading financial strategist, Sarah Bessent, has posited that the convergence between traditional banking services and decentralized finance (DeFi) is inevitable, predicting that technological adoption will lead to banks and crypto platforms offering functionally identical products in the foreseeable future.

Bessent argues that the primary driver for this convergence is the institutional adoption of core blockchain principles, specifically tokenization and instantaneous settlement. Traditional banks are aggressively exploring tokenized assets, including real estate and equities, and developing highly regulated stablecoins or tokenized deposits. These instruments, designed to improve efficiency and reduce transaction latency, closely mirror the value propositions of native crypto assets and decentralized lending protocols.

While regulatory compliance remains the largest differentiator—with banks operating under strict Know Your Customer (KYC) and Anti-Money Laundering (AML) standards—Bessent suggests that maturing regulatory frameworks globally will address these operational gaps. As regulators impose clarity and oversight on digital asset platforms, the risk profile associated with institutional engagement decreases, allowing banks to integrate services like high-yield generation and fractionalized ownership, currently dominated by decentralized applications.

In Bessent’s view, the future financial landscape will see competition focusing not on the underlying technology, but on branding, security, and consumer protection. Although banks will continue to emphasize regulated safety, and crypto firms will push innovation, the core product offering—be it fast payments, collateralized lending, or asset custody—will become virtually indistinguishable, marking a significant evolution in global finance.

Source: Banks and crypto could offer similar products in time: Bessent