Posted by Colin Lambert. Last updated: May 19, 2026
A crypto partner is not just for PoC…
The rush by traditional finance into digital assets increasingly resembles a familiar scene from financial history: everyone wants a partner, everyone wants a platform, and everyone thinks they’ve found the future. And valuations? They’re off the charts.
Over the past 18 months, banks, exchanges, custodians, asset managers and infrastructure providers have announced a dizzying array of partnerships with crypto-native firms. Payments companies are integrating stablecoins, custodians are exploring tokenisation, and FX and securities firms are experimenting with blockchain-based settlement and collateral management. FX is apparently sitting on $27 trillion of idle money. The promises are huge and meaningful.
On one level, this all feels inevitable. Digital assets have clearly survived the “is this real?” phase. The conversation has moved on from the old chestnut that blockchain is a solution looking for a problem. FOMO has definitively taken over and there is nobody that does this better than financial institutions.
But under the rush to compete and avoid being left behind, there is another question lurking beneath the partnership announcements and pilot programmes: can all of these crypto and infrastructure firms actually survive?
History suggests not.
The comparison with the dotcom era is an obvious one, perhaps too obvious, but it remains useful. The late 1990s produced an explosion of internet infrastructure companies, marketplaces and online platforms that initially attracted mind-boggling valuations, before many of which disappeared almost as quickly as they arrived. Yet the internet itself obviously transformed the global economy. Amazon, Google and others became household names that shoulder the vast majority of stock market gains, and incidentally, global commerce.
The lesson seems to be that it’s more about nuance and picking winners than being proved right or wrong. The FUDsters will probably never be fully convinced that DLT is anything but a waste of time and money. The crypto evangelists may never fully find out what the BIS does. Ultimately, neither of these extremes matter; what does make a difference is which companies ended up successfully executing on reshaping distribution while achieving integration into existing structures. And of course, the big one: commercial viability.
For infrastructure, banks and large institutional firms tend to consolidate around providers that offer reliability, regulatory credibility, and either operational scalability or balance-sheet strength. The technology may matter, but the bottom line matters even more.
The same dynamic may now be emerging in digital assets. Consider the rush to launch stablecoins. Just how new entrants can scale is an issue that looms large today. While dominant players found applications in trading and emerging markets, what use case can emerging players fulfill?
The picture is even muddier in the infrastructure space. There are currently dozens if not hundreds of firms offering tokenisation platforms, stablecoin infrastructure, digital asset custody, blockchain settlement rails, wallet technology, collateral management tools and interoperability layers. Some are highly-sophisticated, others are undoubtedly opportunistic. Many are competing to become the “connectivity layer” between traditional finance and blockchain-based infrastructure.
The problem is that traditional finance rarely lives with fragmentation for long, unless it’s beneficial for major players (or it’s the FX platform landscape.) For infrastructure, banks and large institutional firms tend to consolidate around providers that offer reliability, regulatory credibility, and either operational scalability or balance-sheet strength. The technology may matter, but the bottom line matters even more.
This creates an uncomfortable reality for some crypto-native firms. Winning a proof-of-concept with a global bank is not the same as becoming part of global financial infrastructure. Nor does every “strategic” partnership automatically translate into sustainable revenues.
Ironically, the winners may not necessarily be the firms with the most advanced blockchain technology. They may simply be the ones best able to make blockchain infrastructure invisible to the client.
In fact, many of today’s collaborations appear exploratory rather than fully committed. Traditional finance firms are learning, testing optionality and hedging strategic risk. Few institutions want to be left behind if tokenised finance scales rapidly, but equally few are prepared to bet their future infrastructure entirely on relatively young blockchain firms.
That does not mean the incumbents automatically win either. The ongoing battle between banks and crypto firms over yield in the shape of the Clarity Act demonstrates that crypto is forcing change in finance. Firms that two years ago couldn’t get a bank account are now applying for banking licenses.
This is a clear threat to traditional finance companies that still struggle with speed, integration complexity and internal silos – and in many cases, crypto-native firms remain significantly better at product development, user experience and rapid deployment. Some have built genuinely impressive infrastructure businesses with strong network effects and growing institutional credibility.
The likely outcome is therefore neither total disruption nor complete incumbent dominance, but consolidation. A handful of crypto infrastructure firms will probably emerge as market utilities or strategic partners to banks and market infrastructure providers. Others may become acquisition targets. Many will disappear.
Ironically, the winners may not necessarily be the firms with the most advanced blockchain technology. They may simply be the ones best able to make blockchain infrastructure invisible to the client. Because ultimately, most institutional clients are not looking for “crypto”. They are looking for faster settlement, better collateral mobility, lower operational friction and more efficient movement of capital.
And that is a much harder business than selling a vision of digital transformation. Just ask “TradFi” firms.