BNY Mellon CEO: Banks Won't Be Replaced by DeFi, Rather They Are the Key Bridge for the Next Phase of Crypto Adoption

New York Mellon Bank (BNY Mellon) CEO Robin Vince clearly stated at the Digital Asset Summit in New York that the next phase of cryptocurrency adoption will heavily depend on large traditional financial institutions. He dismissed the idea that DeFi will replace banks, emphasizing that traditional banks have a vast customer base and infrastructure, making them the best bridge for tokenization.

(Background: North American banking giant BMO partners with CME and Google Cloud to launch the “Tokenized Cash” platform, targeting 24/7 real-time settlement)

(Additional context: Wall Street giants enter the game! Wells Fargo applies for “WFUSD” trademark, fully deploying crypto trading and stablecoin payments)

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• Large banks are not being eliminated but are the “adoption vehicles” for the crypto market
• Focusing on “heavy” assets, pushing forward with tokenization
• Regulatory battles: “Clear Act” and stablecoin yield disputes
• A long journey of 5 to 15 years

In the digital asset space, the idea that decentralized finance (DeFi) will bypass or replace traditional banks has been prevalent. However, Robin Vince, CEO of BNY Mellon, challenged this view at the Digital Asset Summit in New York on Tuesday.

Large banks are not being eliminated but are the “adoption vehicles” for the crypto market

Vince stated that for cryptocurrencies and digital assets to reach the next stage of growth, the participation of large financial institutions will be indispensable. He believes that a technology seeking adopters can sometimes struggle, but with existing large customer bases and robust infrastructure, banks will be the best “adoption vehicle” for this technology.

He mentioned that as one of the first major institutions to offer digital asset custody services, BNY Mellon is ready to serve as the most effective bridge between traditional finance and the digital financial ecosystem, providing all the support that digital asset providers need from traditional finance.

Focusing on “heavy” assets, pushing forward with tokenization

Regarding specific applications, Vince focused on the field of “tokenization,” especially converting traditional financial products into digital versions. He revealed that the bank has already created digital tokens for money market funds and new share classes, issuing existing funds in tokenized form to encourage broader market adoption.

Looking ahead, Vince expects digital asset adoption to prioritize areas where traditional systems are currently inefficient. He bluntly stated that the current lending and real estate markets are quite “clunky,” and these inefficient traditional markets are the most likely to benefit early from tokenization technology.

Regulatory battles: “Clear Act” and stablecoin yield disputes

While optimistic about technological prospects, Vince strongly urged that trust and clear regulation are the ultimate keys to industry growth. He warned that if the market remains in chaos like the “Wild West,” up to 90% of traditional financial services firms will want nothing to do with it.

“We need clarity and rules of the road. This hesitation is slowing down adoption.”

Currently, U.S. lawmakers are working to establish a safe digital asset investment framework for institutional investors. Although the “GENIUS Act,” focused on stablecoins, has already passed, the revised version of the “Digital Asset Market Clarity Act” is still in flux. This week, lawmakers shared updates on the draft behind closed doors on Capitol Hill, paving the way for a Senate Banking Committee hearing.

However, the draft has sparked significant controversy over how to handle stablecoin yields. Early feedback from the crypto industry indicates that the wording regarding stablecoin yields is narrow and vague. Under pressure from traditional banks (such as traditional lending institutions), the latest compromise only allows rewards linked to “user activity” and strictly prohibits paying interest on “stablecoin balances.” This regulation reflects the ongoing power struggle between the crypto industry and traditional finance over how to classify these digital products.

A long journey of 5 to 15 years

Facing both technological evolution and regulatory challenges, Vince warned that patience is essential. He described this financial transformation as a long journey of 5, 10, or even 15 years, with progress entirely dependent on breakthroughs in technology, regulatory improvements, and increased market participation. Despite the long and uncertain road, Vince emphasized that none of these challenges should dampen the industry’s enthusiasm for initiating this transformation.