Banking in the Age of Blockchain

Banking is one of the oldest and most conservative industries in the world.

Traditionally resistant to change, financial institutions face growing pressure to innovate amid stiff competition. Fintech companies and blockchain technology present new challenges to the banking sector.

Depository for assets

Financial institutions like banks usually do two simple things: hold money and lend money. Bank deposits can take on many forms: cash, bonds, jewelry, stock certificates, precious metals, and much more.

Blockchain technology is a new addition to the traditional stable of bank deposits, and it may shake up the industry like never before. Storing the assets is only part of the job for a bank. Issuing proof of assets and maintaining collateral is an important role for bankers in the economy. Lending and credit are often based on secured collateral. Cryptocurrency depository services could be a new way to establish collateral for loans, lines of credit, mortgages, letters of credit, and surety bonds.

The potential market is endless if society can learn to rely on blockchain deposits.


Collateral forms an essential part of the banking system at its core. Deposits-on-hand is one of the key metrics to establish a bank and maintain a suitable capital base. Typically, banks used a limited list of collateral for loans: cash, bonds, real estate, vehicles, and a few others. Cryptocurrency as collateral is a new idea with a lot of potential applications. The blockchain could hold the key to a better system of collateral to establish the underlying trust in the financial system.

Financial Power

Cryptocurrency assets grew at a pace that is truly unbelievable. The market capitalization of the crypto market grew from zero to hundreds of billions in a very short time. Traditional collateral assets like real estate and bonds took hundreds of years to establish a trusted valuation and reliable means for securing collateral. Land deeds, property title registration, and mortgage law all work together to provide liquidity and loan capital for millions of investors, business owners, and individuals. The cryptocurrency market is still in its nascent stages, but it’s clear that a reliable system of collateral registration and security could unlock billions of saved capital held within cryptocurrency assets.


The basis of many bank lending programs is solid collateral. From car loans to mortgages, a large portion of consumer and business loans are made using a form of guarantee on physical or financial assets. The financial industry is very efficient working with collateral and loan security on a wide variety of assets, but there is a growing need for cryptocurrency-collateralized loans. Think of all that capital, sitting in exchanges and wallets all over the world. The world needs a reliable system of collateralization for cryptocurrency to unlock the true potential of this new form of capital wealth.


Collateralization and financial wealth are too constrained today. National borders, outdated banking regulation, and poor interconnectivity of financial systems are slowing down progress all over the world. A better system of banking using blockchain assets and a better depository network would improve the flow of capital, lower transaction costs, and improve the accessibility of loan capital for investors, governments, and consumers alike.

This article was initially published at
Depository Network (DEPO) is a high-tech infrastructure enabling lenders worldwide to accept digital assets as collateral.

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