Banks vs. Blockchain: Will 2025 Transform the Payments Sector?

By Khumaer Bayas On Mar 18, 2025

Every year, new statements about blockchain technology’s rapid development in the banking sector appear. Since the industry is dynamically evolving, this implementation pace increases. However, banking isn’t a one-size-fits-all industry.

Obviously, technological adoption rates, legal systems, and regulations vary for different markets. Some regions implement new technologies such as blockchain more intensively, while others take a more measured approach. The clearest point is that financial institutions find blockchain a potential solution for a variety of challenges.

The global market for Fintech Blockchain was valued at $3.4 Billion in 2024 and is expected to reach $49.2 Billion by 2030, highlighting a growing demand for financial institutions in the implementation of this technology.

Already, two of the world’s largest financial institutions, Citi and Société Générale, have undertaken several steps to reshape conventional banking processes. The former has launched a tokenized inter-branch deposit system called Citi Digital Cash to streamline transactions within the bank’s network, while the latter has issued a euro-denominated stablecoin on Ethereum to make digital payments faster and more secure. Moreover, last month, the Governing Council of the ECB decided to expand its initiative to settle transactions recorded on distributed ledger technology (DLT) in central bank money.

So, how blockchain technology can potentially transform the banking sector and what challenges exist?

Challenges and Risks of Blockchain in Banking

Existing challenges of integrating blockchain in the banking sector include value transfer risks, which imply the absence of central intermediaries when peer-to-peer transactions are made, putting confidential information in danger.

The same is true about rights people in Europe have, recognized by the government, such as the “right to be forgotten,” which grants free access to European citizens to the information kept in external databases.

In addition, even though atomic settlement is widely recognized by regulators, this increases the need for cash, especially for big financial institutions like banks. In other words, the higher liquidity amplifies the risk that funding may not be available when needed. This is called a liquidity risk.

Methods Banks Integrate to Implement Blockchain in Day-to-Day Operations

Despite the process of blockchain integration in banking operations isn’t instant, there are many examples of how financial institutions have already embedded this technology into daily processes.

In general, improved transaction efficiency, better processing speed and a more effective cash flow for financial organizations are benefits on the surface. As for transaction speed, international payments have always been slow and expensive, while nowadays, blockchain streamlines these operations.

Instant payments are also being widely utilised by modern banks. This method plays an imperative role in controlling expenses and making reconciliation processes more reliable and cheaper. Moreover, adoption of instant payments mitigates the risks connected with malicious activity since real-time fraud detection mechanism is employed.

Additionally, compliance processes in banking demand a lot of time and resources. Blockchain streamlines procedures such as tracking transactions or clients’ verification, providing more transparent and well-structured verification mechanisms.

What Factors Will Help Banks to Adopt Blockchain in 2025?

Undoubtedly, the banking and payments industry will significantly shift toward cryptocurrency in 2025 due to changes in the political and regulatory landscapes. Not only is support from the recently assigned crypto-friendly SEC Chairman ensured, but Trump’s administration is also proactive in this stance. This means banks will have to adjust their policies and reshape processes.

By 2027, digital wallets are expected to handle over $25 trillion in transactions prevailing e-commerce and POS transactions. Besides, Markets in Crypto-Assets regulation (MiCA) was approved by the European parliamentaries and this framework establishes clearer rules for compliance and risk management, structuring financial institutions more efficiently.

In this regard, 2025 is promised to be innovative. All these technologies will make the global financial landscape more exclusive and decentralized.

Market News and Data brought to you by Benzinga APIs

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}

_{Aggregated From –}

_{Source link}

_{We do not take money from any political parties. We do not endorse In_dia’s ruling party BJP and In_dia’s Prime Minister’s position on keeping In_dia a closed market, ambiguous economy, and keeping India as a heavy taxing country so no one from outside world wants to do business here. It’s like denying In_dia its right in the world…}

_{BJP Government also discourages small and local media, coming down on them heavily regulating and using lawful actions along with soft threats from demented bureaucrat extremists and other extremist groups. On one hand, the mainstream media in In_dia is getting rich and on other hand the local small media is being strangulated. So if not automated or required, We do not willfully publish any content from In_dia or pertaining to that country.}

“The parasitic left-wing media and their bottom-feeding cronies have devolved into nothing more than freeloading scavengers, desperately leeching onto every possible news outlet to vomit their hatred for President Trump, Elon Musk, the GOP, and whatever shred of sanity remains in this world. If this portal ever falls prey to their filth—if any of their fraudulent, brain-dead propaganda worms its way into our automated news curation—then it’s open season on these slime-covered hacks. These sewer-dwelling propagandists, along with their PR lackeys and shadowy intelligence handlers, keep trying to smear us with their garbage. Like disobedient pets, they need to be dealt with. And dealt with they shall be—right here on Khumaer.us, the personal news battleground of Khumaer Bayas. Let’s expose them for the lying vermin they are!”