2025 will be the year, banks jump back to digital assets and turn years of caution due to a challenging legislative and market environment. Following the withdrawal of SAB 121 and new guidance from an important federal bank regulator, Banks is now back in the course of developing crypto strategies to serve their clients and remain competitive.

What we see now is renewed interest from banks everywhere – from credit unions and community banks to medium and regional players to Wall Street giants. What is at stake for banks is existing and potential client relationships as they compete for market share among retail and institutional participants who want to participate in digital assets. Banks leading the way will be able to differentiate their products and create capital -efficient income streams.

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For reasons for both cultural and technological, many banks can end either a license for custody to be used internally or cooperation with a crypto-native sub-custom. One of the most important decisions that a bank should make is who they choose as a custody partner – a critical question that cyber security events continue to make headlines.

From security and regulatory status to time to market, what should banks consider when diving back into digital assets?

Time to Market and Legislative Status

One of the first things every bank should consider is how their approach will affect time for market strategy and competitive positioning. For banks, working with a regulated custodian is more than just a box control exercise.

To collaborate with a crypto depot that has built up a comprehensive risk management and compliance infrastructure-from AML and KYC controls for information security policies giving the banks a streamlined go-to-market strategy. Banks and their crypto partners should not only speak the same language, but regulated on the same foot.

Crypto partners have to demonstrate that they meet – and exceed – bank regulating expectations. This can help get regulators and senior banking on board, in addition to creating peace between clients.

Security and elasticity

Banks that come in crypto will do it quickly, but also safe to maintain their clients’ hard -earned confidence. Therefore, banks often put security front-and-centers in search of a crypto depot.

As a baseline, any crypto-detention partner must take an end-to-end approach to security involving multiple lines of defense for each transaction. The detention partner must also have in place robust technology to ensure that any transaction reflects the client’s intention. Keeping assets legally separate from other clients and the company can help mitigate the risk.

Finally, detention solutions should meet the strict operational resilience standards that are kept in order to scale with the bank’s digital asset business.

Integrated solution

Banks should also consider easy integration into existing systems as well as the ability to support future product and income streams. Crypto -detention integration into core bank systems can help optimize revenue options, operational efficiency and market time.

Safe custody is really the basis for additional offers – from security lending to trade to effort. When the banks seem to meet the demand for the client after full participation in the ecosystem, it is to work with a custodian who offers an integrated package of services.

This year will be a turning point for crypto-recording across traditional banks of all sizes, with crypto-native custody solutions that give a clear path for banks to remain competitive and meet the client’s demand.