The global banking system is antiquated.
There is a new competitor on the block and it is going to disrupt the financial world completely. We know there are trillions of dollars at stake so it is a high priced contest.
Who will be the winner?
For more than a decade, crypto advocates has touted that blockchain along with cryptocurrency was the basis for a new financial system. It turns out this is 100% accurate.
One belief that was parallel to that was the idea that it would be decentralized. Blockchain was going to usher in an era where traditional gatekeepers were no longer required and end up dying.
This is a point that is less clear.
Banks are certainly in the firing line. That said, the question of whether they are heading for the graveyard still is up for debate.
A choice is to be made. It seems that some are already starting to enter the arena.
Image generated by Ideogram
My view is the banks will ultimately be cooked. We will get into that conclusion by the end of the article.
Crypto is getting a lot of attention from Wall Street. The banking system is awaiting regulation from the US Congress before going forward. However, plans are in the works that show there is alignment.
We also see a stern warning.
Eric Trump is building a crypto based financial network. He is one of the more recent entrants into the crypto realm. If he wasn't the son of one of the biggest lightening rods, he might get more attention for his crypto views.
Nevertheless, this is what he had to say:
Eric Trump said traditional banks could “be extinct in ten years” unless they embrace cryptocurrency and blockchain, telling CNBC that today’s financial plumbing is too slow, costly, and exclusionary.
This makes a great deal of sense. We know the infrastructure of the existing banking system is outdated. It is amazing how quickly token (asset) swaps can take place on some blockchains. The entire transaction is settled in a few seconds (or a minute at most). Compare this to the banking system which measures things in days.
Eric Trump, executive vice president of the Trump Organization, argued that legacy rails such as the SWIFT messaging system “are an absolute disaster,” noting he often races to beat 4 p.m. wire cut-off times only to wait days for funds to settle. He contrasted that with wallet-to-wallet transfers that clear “instantaneously without the expense, without the variability.”
Anyone who has used crypto to any degree higher than just a novice noticed this. Crypto is 24/7, without regard to time zones, days, or banking hours.
Imagine a service trying to compete with Netflix that was only available from 10 AM to 10 PM. Of course, now that I think about it, that was called Blockbuster Video.
With this correlation, we can see how the banks are behind the times.
Are the banks finished?
To survive, they have to transition to FinTech firms. This is something they have dealt with for a couple decades so it is nothing new. The difference is the fact there are startups from all over the world along with major tech companies who will be involved.
Let us start with Big Tech.
According to Rafiki, here are the largest US banks by customer:
- Chase Bank: With over 63 million customers, Chase Bank is one of the largest banks in the US.
- Bank of America: Boasting around 47 million customers, Bank of America is a close second.
- Wells Fargo: With approximately 42 million customers, Wells Fargo is another major player in the US banking industry.
- Citi Bank: Citi Bank has around 39 million customers, making it one of the top banks in the country.
- US Bank: Rounding out the top 5 is US Bank, with around 30 million customers.
These numbers might be impressive until we compare them to the MAUs of the major social media platforms.
Meta Family of Apps (overall): 3.98 billion monthly active people (MAPs), which includes users across Facebook, Instagram, WhatsApp, and Messenger who use at least one of these services
YouTube: 2.49 billion to 2.7 billion MAUs (estimates vary slightly by source; 2.49 billion as of April 2025, 2.7 billion as of January 2024)
X.com (formerly Twitter): Approximately 586 million to 611 million MAUs (586 million per Statista as of February 2025, 611 million per DataReportal as of April 2024
Even X is almost 10 times the size of the largest US bank (by customer). This is a huge advantage.
Blockchain and cryptocurrency become infrastructure. This is something that Big Tech only needs to tap into. For example, I hypothesized that each of these entities would enter the stablecoin arena. Of course, this is also true for the banks.
However, when we look at network effects, which are applicable since money is now digital, social media entities crush the banks.
Some banks are already on record about their intentions regarding cryptocurrency. They are not allowing this to pass them by.
Here is some recent news:
These are first layer entries. The test will be what services they built on their trading platforms. What else are they offering?
It is likely they move into the DeFi world, becoming a centralized interface. With tens of millions of customers, they can leverage their existing accounts.
There is a problem. We have a generational shift taking place. There is competition, not only for Big Tech, but other crypto entities.
For example, Metamask is going to release a self-custody crypto card. This allows people to purchase goods and services using the crypto in their wallet.
Here is the key, a digital wallet, in many ways, is a bank. It allows people to send, receive and story money. The is the majority of what retail banking does.
So the question of what is the difference between a Metamask card and a debit card tied to a bank deposit? From the utility perspective, they are the same. The only difference, other than control, is what type of "money" is used. Banks have legal tender whereas Metamask has crypto.
This is the outline of the race ahead. Can the banks compete? That is the multi-trillion dollar question.
