Banking 2.0: How Crypto Payments Are Forcing A Rebuild Of Banking Infrastructure

Over the last two years, banking stopped being the only way money moves. Stablecoins have quietly become the new default for cross-border settlements, on-chain treasuries, and remittance corridors.  Crypto payments are ‘nearly instant, incur lower costs, [and] offer nearly 100% uptime,’ since they bypass batch cutoffs and manual compliance checks.

Most banks are only now realizing they’re no longer at the center.

For years, financial innovation focused on the front-end. The cards got better, and apps became smoother. But beneath the surface, money still moved like it was 1985—through clearinghouses, cutoff times, and batch settlements.

Then came stablecoins and crypto payments.

They didn’t upgrade the old system. They introduced a new, always-on, programmable, and global system. Now, banks are scrambling to rebuild their infrastructure before crypto payments finish making legacy rails obsolete.

Which Are The Key Drivers in The Shift Towards Crypto Payments?

Legacy payment systems have multi-day cross-border transfers and fees that can exceed 20% of the remittance value, at times. Crypto payments help avoid slow correspondent banking and eliminate the high costs.

Key drivers of this shift include:

• Instant Global Settlement: Blockchain-based transfers clear in seconds anywhere in the world. Payments move as fast as data with no waiting for banks to open.
• Lower Costs and Capital Efficiency: Stablecoins cut out multiple middlemen. Firms no longer need to prefund foreign accounts. They can send a token and trust it will be redeemed at par abroad. Visa estimates this could free up billions by reducing idle capital in corporate treasuries.
• Programmability and New Features: On-chain payments can carry rules. Businesses can automate payroll, conditional escrow, subscriptions or royalties directly via smart contracts. This ‘programmable money’ enables features that legacy rails can’t easily support.
• Transparent, Wallet-based Finance: Every transaction is visible on-chain. Users transact with wallet addresses instead of bank accounts, broadening access. In stablecoin networks, anyone with the internet can pay or be paid without opening a bank account.

Payment apps are now integrating stablecoin options directly into checkout. Stripe allows a USDC payment option alongside cards. Many businesses, such as AI startups, report shifting ~20% of revenues to stablecoins because they settle near-instantly at roughly half the transaction cost.

In 2025 alone, stablecoin volumes exceeded $40 trillion across public chains, according to the Stablecoin Insider Year-End Report. More tellingly, over 70% of those flows were non-exchange activity: payments, treasuries, tokenized RWAs. That’s not crypto trading. That’s a money movement.

The Rise of Embedded Crypto in Fintech and Commerce

A rising trend in fintech, neobanks, and other payment networks is ‘invisible’ crypto, where businesses use embedded stablecoin rails so users never see a wallet.

Fintechs and platforms are weaving crypto payments into familiar interfaces. Stripe lets merchants accept stablecoins, like USDC on Ethereum and Polygon, for subscriptions and payouts. These crypto receipts then automatically convert to fiat in the background.

Stripe findings reveal how some fast-growing US AI companies drawing 60% of revenue internationally have shifted ~20% of volume to stablecoin payments, to cut cross-border fees in half and eliminate multi-day delays.

These embedded rails are already live in many apps, enabling use cases like:

• Global Payroll and Gig Payments: Traditional companies and DAOs now pay remote teams in stablecoins. What once took 5+ days via banks or PayPal now clears in seconds for minimal cost. Local users redeem to their currency via on/off ramps.
• Gaming Economies: In-game purchases or upgrades are funded by stablecoins. Players buy tokens with fiat and transact in-game. Settlement happens immediately on-chain, slashing platform fees.
• Digital Commerce & Subscriptions: Recurring payments use on-chain subscriptions. Stripe’s new system uses smart contracts so users don’t re-sign each payment. Merchant invoices can auto-pay via crypto, reducing failures.
• NFT Marketplaces: In NFT marketplaces, embedded crypto checkout allows buying blockchain art with a credit card. On the back end, it mints a stablecoin payment without the user handling keys.

In all these cases, the end-user sees only a normal payment flow via card, app wallet, etc., while stablecoins run unseen under the hood. This ‘invisibility’ is critical for adoption. It means Web2 users can enter Web3 without even realizing it, because fintech apps handle KYC, compliance, and conversion behind the scenes.

Banks Are Also Entering the Crypto Era

Banks themselves are quietly modernizing and recognizing the efficacy of crypto as payment rails. Major banks and consortia are planning their own tokenized currencies and Rails. In mid-2025, JPMorgan unveiled JPM Coin, a dollar-based deposit token for its clients on the Ethereum-based Base network. B2C2, Mastercard, and Coinbase successfully completed transactions using JPM coin.

Other big U.S. banks, such as Bank of America, Citi, and Wells Fargo, have convened on a joint project to issue a collateralized digital dollar under new regulations. In Europe, banks have launched a euro-based consortium stablecoin for intra-EU settlement under MiCA.

Institutional Stablecoins

Under the new regulations, banks in the US and the EU can issue tokens themselves. Banks like ANZ (A$DC), Bancolombia (COPW), SMBC (yen coin), and others have live currency-backed tokens for minutes-speed transfers. These bank-issued coins let the bank maintain reserve control and on/off-ramps, preserving trust while gaining instant rails.

Tokenized Deposits

Some banks are converting ledger deposits into digital tokens on permissioned ledgers. These behave exactly like bank deposits with full KYC and regulation, but settle in real-time. These tokenized deposits sit within core banking frameworks. Only the settlement mechanism changes. Pilots, like Project Acacia in Australia, show tokenized deposits seamlessly interacting with stablecoins and even wholesale CBDC for atomic settlement.

Fintech Partnerships

Many banks are leveraging specialized partners. For example,

• Cross River and Evolve Bank provide white-label banking infrastructure to crypto platforms.
• Circle’s USDC stablecoin partners with BNY Mellon for reserve custody, and Paxos holds reserves at State Street and BMO.
• Citigroup recently tied up with Coinbase so institutional clients can move fiat and USDC smoothly.
• Even the Zelle network, backed by large banks, plans to add USD stablecoin corridors for international payments.

The Federal Reserve notes that banks could earn new fee income by providing settlement accounts and custodial services for stablecoin platforms. In effect, banks may unbundle their services. Payments could migrate to blockchain rails, while banks retain lending functions.

Institutions that integrate crypto infrastructure, including on- and off-ramp providers like Transak alongside custody and compliance systems, stand a better chance of retaining customer relationships as payments move on-chain. Others risk disintermediation. As Fed analysts warn, if customers hold digital dollars off-banks, the traditional deposit-funded model is under pressure.

Banking 2.0: How Banks and Fintech Are Modernizing Software and Compliance

A Banking 2.0 infrastructure requires new software and compliance tools. Banks and fintechs are investing in blockchain-based payment engines, token-custody systems, and analytics.

Modern crypto APIs and SDKs, offered by providers like Transak, let developers integrate compliant fiat-to-crypto and crypto-to-fiat rails without building payments, compliance, and liquidity infrastructure from scratch.

For example, Transak offers APIs that orchestrate global compliance workflows, KYC/AML checks, liquidity access, and settlement, allowing apps to onboard users and enable stablecoin flows through a single integration.

On the compliance side, on-chain analytics firms, including Chainalysis, Elliptic, and TRM Labs, now offer real-time transaction monitoring and sanctions screening for crypto. Smart contracts and digital compliance layers can automatically check AML/KYC and reserve backing for every payment.

Regulators are also catching up. Between 2023 and 2025, a wave of rules, including MiCA in the EU, licensing in the UK and Asia, and the GENIUS Act in the US, require stablecoin issuers to hold liquid reserves and undergo audits. In practice, this means any ‘Banking 2.0’ system must integrate blockchain risk controls, record-keeping, and identity checks into the underlying rails.

Where Transak Fits in the Banking 2.0 Stack

As stablecoins force a rebuild of banking infrastructure, one thing becomes clear that most banks and fintechs aren’t ready to go native on-chain.

Transak comes in here:

• As a compliant fiat-to-crypto onramp, Transak helps apps, wallets, and even banks give users instant access to stablecoins, without leaving the product.
• As an infrastructure provider, Transak handles global compliance orchestration, identity, and liquidity so platforms can settle on-chain safely.

Recent integrations with MetaMask and others show how Transak has evolved beyond basic onboarding into a broader payments and access layer for stablecoin-based applications.

As ‘Banking 2.0’ takes shape, Transak enables fintechs, apps, wallets, and select financial institutions to connect to stablecoin infrastructure without rebuilding payments, compliance, and liquidity stacks from the ground up.

How are Emerging Markets Coping with the Shift?

While much focus is on regulated markets, crypto payments have already transformed finance in many emerging economies. In countries with weak banking infrastructure or unstable currencies, stablecoins often serve as a store of value and payment medium.

For example, Visa-sponsored surveys show that up to 50% of crypto users in places like Nigeria or Turkey hold “digital dollars” to save and transact. Remittances in emerging markets normally take 3–7 days, with ~6–7% fees. That’s changing.  Turkey moved ~$63 billion in cross-border payments in 2024 via crypto rails.

Central banks in some EMs are also engaging. The Eastern Caribbean has a blockchain-based DCash, and countries like Nigeria are exploring digital currencies to leapfrog dated banking systems.

Banking 2.0 is not just a Silicon Valley thing. It’s already real in much of Asia, Africa, and Latin America, where mobile and crypto adoption leapfrog legacy banks.

Banking 2.0 Will Be Hybrid, But Settlement Will Be On-Chain

Banks won’t disappear. Fiat won’t vanish. But the control points in financial systems are shifting. In the next 3–5 years:

• Settlement will be on-chain
• Compliance will be automated
• Access will be decentralized

Stablecoins aren’t replacing banks. They’re rebuilding the rails beneath them. Those who adapt now, by partnering with infra providers like Transak, will own the new distribution layer.

Want to plug your app or fintech into real-time stablecoin rails? Explore Transak’s infrastructure and accelerate deployment timelines compared to building in-house.