What Is a Crypto-Native Bank?

Why Crypto Needs Its Own Banks

For years, crypto companies operated in a kind of banking purgatory. They needed bank accounts to function — to hold customer funds, process payroll, manage treasury — but banks didn't want them as clients. The period known as Operation Choke Point 2.0 saw US regulators quietly pressure banks to drop crypto customers, leading to a wave of debanking that left companies scrambling for basic financial services.

That era is ending. Under the current regulatory environment, over 25 federal bank charter applications have been submitted, and a new category of institution is emerging: the crypto-native bank. These aren't traditional banks that bolted on a crypto trading feature. They're institutions designed from day one to serve the digital asset economy — with different capital structures, different operating models, and different technology stacks from anything that came before.

“This is a direct response to choke point and everything that you've seen over the last several years, where US and many other companies were losing all of their bank accounts just because we were doing crypto.”

— Chris Maurice, CEO of Yellow Card (Episode 70)

The shift is real. Rather than relying on crypto-tolerant incumbents that could change their mind at any moment, the industry is building its own banking infrastructure. Full federal charters. FDIC insurance. The regulatory framework to operate permanently.

How Crypto-Native Banks Differ Structurally

A crypto-native bank isn't just a regular bank with a Bitcoin button. The differences go deep — from how much capital they hold to when they operate.

Take capital ratios. Traditional banks in the US typically operate at around a 6% tier-1 leverage ratio — meaning they hold roughly $6 in core capital for every $100 in assets. That's the minimum regulatory requirement. Crypto-native banks are launching with dramatically higher buffers.

“The bank has a 12% tier-1 leverage ratio. This is actually, for people that are listening, double the typical requirements, which means that it's much safer on a ratio perspective and on a leverage perspective. And then over 60% of the assets are in cash or high-quality liquid investments.”

— Diogo Mónica, GP at Haun Ventures (Episode 70)

That 12% leverage ratio and 60%+ liquidity buffer make it a far more conservative balance sheet than most traditional banks run. The reasoning is straightforward: when your customer base includes crypto companies and technology firms — industries with volatile cash flows and concentrated risk — you need bigger buffers. But it also creates a different business model, one less dependent on leveraged lending and more focused on services and transactions.

The other structural difference is operating hours. Traditional banks still operate on business-day schedules. Payments settle Monday through Friday, with weekends creating gaps in liquidity and settlement. Crypto markets never close. A bank designed for the crypto economy has to match that rhythm.

“It launched on a Sunday, because we can, right? Which is kind of like a nod to — this is 24/7 and the age of the weekday bank is over.”

— Diogo Mónica, GP at Haun Ventures (Episode 70)

Stablecoin Deposits and the Minting Question

Traditional banks look at stablecoins with a mix of suspicion and competitive anxiety. They look a lot like deposits, but they sit outside the banking system. Crypto-native banks take the opposite approach — they embrace stablecoins as a core product.

A federally chartered crypto-native bank can potentially allow customers to deposit stablecoins directly, and in some cases, enable the minting of new stablecoins against those deposits. This blurs the line between traditional deposit-taking and stablecoin issuance in a way that makes regulators uncomfortable but customers enthusiastic.

But there's a major economic constraint. Under the GENIUS Act, stablecoin reserves must be held one-to-one — every dollar of stablecoin supply must be backed by a dollar of reserves. Banks cannot fractionalize stablecoin reserves the way they can with traditional deposits, where a single deposited dollar can support $8–13 in lending.

“If you're a bank and the way that you're thinking about stablecoins is that I'm going to go and compete with Tether or Circle, that's probably not the best idea. Within the GENIUS Act, you have the one-to-one reserves. You cannot fractionalize the reserves backing up your stablecoin. You have to keep $1 for one stablecoin, whereas normal deposits, you can lend them out 13 times. So you make a lot more money on deposits.”

— Gwera Kiwana, CEO of Sling Money (Episode 34)

So crypto-native banks aren't trying to become the next Tether. The economics just don't work for a bank whose primary business model is lending. Instead, stablecoins serve as a utility layer — a way for customers to move value, settle 24/7, and bridge between crypto and the traditional financial system. The real revenue comes from lending, custody, and treasury services.

Crypto-Backed Lending: The Killer Feature

If stablecoins are the utility layer, crypto-backed lending is where the money is. Banks have a structural advantage here — lower cost of capital, regulatory frameworks for collateral management, and infrastructure for loan servicing. Combine that with accepting Bitcoin or ETH as collateral and you get something no exchange or DeFi protocol can replicate.

“Banks have a significant advantage in lending and cost of capital. If I woke up and in my bank app it said, 'Hey, do you have Bitcoin? Deposit this Bitcoin as collateral for a loan' — either being able to get an attractive interest rate on a personal loan, or even for something like a mortgage — that's where it feels like you could actually get customers who are customers of a bank today to take Bitcoin from Coinbase and deposit it into a bank.”

— Cuy Sheffield, Head of Crypto at Visa (Episode 39)

The crypto lending market has a chequered history. The collapse of CeFi lenders like Celsius, BlockFi, and Voyager in 2022 demonstrated what happens when crypto lending operates without proper risk management or regulatory oversight. Those failures were largely caused by rehypothecation — using customer assets as collateral for the company's own speculative bets.

A federally chartered bank doing crypto-backed lending operates under completely different constraints. Regulators require capital reserves, risk-weighted asset calculations, and limits on concentration risk. The loans are over-collateralized by definition — if Bitcoin drops 30%, the bank liquidates the collateral to protect depositors, exactly as a traditional margin loan works.

“One of the teams I built out at Goldman was the Bitcoin lending desk, and it was the first 24/7, 365, genuinely fully automated business. We were happy to do that for institutions, because they know what they're signing up for. For individuals, there's an extreme adverse reaction and fear within large banks, because you have this whole customer relationship.”

— Oli Harris, Founder of Arda Global (Episode 39)

And that's where crypto-native banks have the edge. They don't have a legacy customer base that might react badly to crypto risk. Their customers are the crypto economy. They can build lending products designed for the volatility of digital assets from day one, rather than trying to fit Bitcoin into a mortgage underwriting model designed for real estate.

The Three Hardest Things About Starting a Crypto Bank

Building a crypto-native bank is extraordinarily difficult. Diogo Mónica, who sits on the boards of two federally chartered banks, identified three primary challenges from direct experience:

1. Capitalization. Raising capital for a bank charter is nothing like a startup raise. Investors are committing capital to an entity with lower expected returns than venture-backed tech companies, higher regulatory burden, and a longer time to profitability. Raising over $600 million in equity capital for a bank with no customers takes serious conviction from backers.

2. Regulatory approval. Obtaining a full OCC charter, FDIC insurance, and clearing the organizational phase can take years. The current administration has accelerated the process for crypto-focused applicants, but the bar remains high. Preliminary approval, conditional charter, organizational phase, and finally a full launch — each step has its own requirements, examinations, and potential for delay.

3. Deposit base. This is the classic chicken-and-egg of banking: you need customers to generate deposits, but you need deposits to offer competitive products. The “teenage years,” as Mónica describes them, are the period where a bank is too small to attract large institutional depositors but needs scale to become economically viable.

“Starting a bank is brutal. The three hardest things — capitalization, regulatory approval, and getting to scale on your depository base. You're not big enough for real players to use you, but you're not small enough to just be scrappy. You have to jump those teenage years.”

— Diogo Mónica, GP at Haun Ventures (Episode 70)

But the timing advantage in 2026 is real. The industry has been debanked for years. There's enormous pent-up demand from crypto companies, DAOs, stablecoin issuers, and technology firms. The first banks through the door have a captive audience of customers who have literally nowhere else to go.

How Traditional Banks Are Responding

Not every bank serving crypto needs to be built from scratch. A parallel track is emerging where traditional banks are adding crypto capabilities to their existing platforms — and having some success doing it.

BBVA's launch of Bitcoin and Ethereum trading for all retail customers in Spain marked a turning point. This wasn't a pilot for high-net-worth clients. It was full retail access through the bank's main mobile app, integrated with all their other financial services. As their head of digital assets put it: “We aim to offer the best investment and transaction-based solutions to our customers.”

The approach of adding crypto to existing banking is distinct from building a crypto-native bank. Traditional banks retrofit — adding crypto trading, custody, and potentially stablecoin products on top of legacy core banking systems. The advantage is existing distribution, brand trust, and regulatory standing. The disadvantage is that every new crypto feature has to be negotiated through compliance teams, risk committees, and technology stacks that weren't designed for 24/7 digital asset operations.

“Stablecoins, in some ways, can be more challenging for banks to deal with because it's somewhat close to home. They take deposits, and now you've got this new form of money that's not exactly a deposit — it could be competitive, it could be complementary.”

— Cuy Sheffield, Head of Crypto at Visa (Episode 39)

The market will likely support both models. Large incumbents will serve their existing customers who want crypto exposure without leaving their bank. Crypto-native banks will serve the crypto industry itself — the exchanges, stablecoin issuers, DeFi protocols, mining companies, and technology firms whose needs go far beyond “add a Bitcoin button to the app.”

What This Means for Stablecoins

Crypto-native banks aren't just a banking story. They're a key piece of stablecoin infrastructure. For the stablecoin market to grow from $400 billion to $2 trillion in supply, it needs banks that can natively handle stablecoin flows — on-ramping, off-ramping, custody, and settlement.

Today, stablecoin companies often need multiple banking relationships, complex compliance arrangements, and workarounds to bridge between on-chain operations and the traditional financial system. A crypto-native bank eliminates that friction. Stablecoin deposits go in, fiat comes out, lending happens against digital assets, and the entire system operates 24/7 without the weekend settlement gap that plagues traditional stablecoin payment flows.

That feeds directly into the broader charter race. As more purpose-built banks launch, traditional institutions face a choice: develop crypto capabilities or cede the market to banks that were designed for it from day one.

Key Takeaways

• Crypto-native banks are purpose-built institutions — not traditional banks with crypto features bolted on. They have different capital structures, technology stacks, and operating models designed from day one for digital assets.
• Higher capital ratios and liquidity buffers (12%+ tier-1 leverage, 60%+ liquid assets) make them structurally more conservative than typical banks, compensating for the higher-risk customer base they serve.
• 24/7 operations are a defining feature. Crypto markets never close, and a bank built for the crypto economy has to match that schedule — including weekend settlement and real-time stablecoin flows.
• Stablecoins are a utility layer, not the core business. One-to-one reserve requirements under the GENIUS Act mean banks can't fractionalize stablecoin deposits. The revenue comes from lending, custody, and services — not from competing with Tether on issuance.
• Crypto-backed lending is the competitive advantage. Banks have lower cost of capital and regulatory infrastructure that exchanges and DeFi protocols can't match, making institutional and personal crypto-collateralized loans a natural product.
• Timing matters. Years of debanking have created pent-up demand. The first crypto-native banks to launch have a captive customer base that has been underserved — or completely unserved — by the traditional banking system.