Coinbase’s Big Bank Crypto Pilots Mark a New Phase in Wall Street’s Digital Asset Push

As of December 5, 2025, Coinbase’s newly revealed partnerships with some of America’s largest banks have become one of the clearest signals yet that traditional finance is preparing to run on crypto rails.

At The New York Times’ DealBook Summit on December 3, Coinbase CEO Brian Armstrong said that “some of the largest banks” in the U.S. are now running pilot programs with the exchange focused on stablecoins, crypto custody and trading. ^[1]

Follow‑up reporting from crypto and fintech outlets indicates that JPMorgan Chase, Bank of America and Citigroup are among the institutions involved, building on earlier announced ties between Coinbase and these banks. ^[2] While the banks themselves have not yet confirmed the pilots publicly, the direction of travel is unmistakable: Wall Street is testing crypto infrastructure inside its core systems, not just at the edges.

Big US Banks Quietly Pilot Crypto With Coinbase

Armstrong’s remarks at DealBook confirmed what industry watchers have suspected for months: that major U.S. lenders are no longer content to sit on the sidelines while asset managers and exchanges dominate the digital asset narrative. ^[3]

According to multiple reports:

The pilots focus on three main areas – stablecoin-based payments and settlement, institutional crypto custody, and trading/execution services for digital assets. ^[4]
The banks involved are described as “some of the largest” in the country, with several outlets specifically naming JPMorgan Chase, Bank of America and Citigroup as early participants, citing sources familiar with the programs and prior partnership announcements. ^[5]
The programs are structured as low‑risk pilots, allowing banks to test crypto plumbing inside existing compliance frameworks before deciding whether to scale to full commercial offerings. ^[6]

The picture that emerges is one of cautious but deliberate experimentation. In effect, Coinbase is being plugged into the back end of U.S. mega‑banks as a white‑label provider of crypto infrastructure.

How Previous Deals Set the Stage

The December pilots don’t appear out of nowhere. Over the past year, Coinbase has quietly signed a series of bank integration deals that now look like early building blocks:

JPMorgan Chase: A July 2025 agreement reportedly tied Chase accounts and cards more tightly to Coinbase, including support for USDC‑based rewards and streamlined funding of crypto purchases for tens of millions of customers. ^[7]
PNC Bank: Also in July, PNC began allowing roughly 9 million customers to buy, hold and sell crypto via a Coinbase‑powered interface, while also providing banking services to the exchange. ^[8]
Citibank: A partnership announced in October 2025 focused on using Coinbase technology to move money for cross‑border payments, tapping tokenized dollars for faster settlement at large scale. ^[9]

Newer coverage now suggests that pilots involving JPMorgan, Citi and Bank of America have moved from concept to live testing, with a mix of internal flows and limited client use. ^[10]

Stablecoins, Custody and Trading: What the Pilots Actually Test

While the banks have kept details close, public reporting across Bloomberg, Tekedia, crypto trade publications and exchange blogs outlines a fairly consistent structure for the Coinbase pilots. ^[11]

1. Stablecoin Settlement Rails

The first pillar is stablecoins, particularly USD‑pegged tokens such as USDC, which Coinbase co‑issues and actively promotes for payments.

Banks are said to be exploring:

Internal settlements: Moving tokenized dollars between branches or business lines instead of relying on legacy interbank messaging systems.
Cross‑border payments: Using stablecoins to compress settlement times for corporate and institutional clients from days to seconds while lowering fees from the typical ~6–7% on retail remittances to a fraction of a percent, according to Tekedia’s analysis of potential savings. ^[12]
On‑chain treasury flows: Testing whether tokenized cash can be used for intraday liquidity management and collateral movement.

Analysts quoted by Tekedia argue that, if scaled, stablecoin rails could handle trillions of dollars in annual flows by the second half of this decade, directly competing with networks like SWIFT and Fedwire. ^[13]

2. Institutional Crypto Custody

The second pillar is custody – the safekeeping of assets – which is already a core bank function in securities markets.

In these pilots, banks lean on Coinbase’s infrastructure to:

Store digital assets such as Bitcoin, Ethereum and stablecoins in segregated, institution‑grade vaults.
Integrate that custody data into existing reporting and risk systems.
Satisfy regulatory demands around cybersecurity, compliance and auditability without having to build crypto custody stacks from scratch. ^[14]

CryptoRank and other market intelligence outlets note that custody pilots are often a precursor to full institutional services, because large asset managers and corporates are reluctant to hold digital assets without brand‑name custodians. ^[15]

3. Trading and Execution

The third component involves trading infrastructure. Here, banks test:

Routing client Bitcoin and Ethereum trades through Coinbase Prime or equivalent institutional APIs.
Integrating pricing, liquidity and execution into their wealth‑management and capital‑markets platforms.
Understanding demand, spreads and risk under live but tightly controlled conditions. ^[16]

Tekedia estimates that institutions who bring trading in‑house via integrations like these can retain dozens of basis points of spread revenues that would otherwise go to third‑party brokers – a meaningful incentive in low‑margin businesses. ^[17]

Armstrong’s Message: “Lean In or Get Left Behind”

If the technical details are cautious, Armstrong’s rhetoric has been anything but.

At DealBook, and in interviews echoed across Coindesk, Weex and other outlets, the Coinbase CEO drew a stark line between banks embracing crypto rails and those fighting them. He has repeatedly argued that the most forward‑looking institutions are “leaning into” the opportunity, and that those trying to block or delay digital assets will be “left behind” as regulation and customer demand converge. ^[18]

Importantly:

Armstrong framed 2025 as the year U.S. crypto regulation shifted from murky to mainstream, pointing to passage of a stablecoin bill, the so‑called GENIUS Act, and a bipartisan market‑structure bill that has already cleared the House and is moving through the Senate. ^[19]
He has urged Senators to back the CLARITY Act, legislation that would further define market‑structure rules for exchanges and token issuers, arguing that clear guardrails would unlock more bank participation. ^[20]
Coinbase has supported the pro‑crypto SuperPAC Fairshake, which raised tens of millions of dollars during the 2024 election cycle, in an effort to elect lawmakers who favor digital asset innovation within a defined regulatory framework. ^[21]

In short, Armstrong’s message to Wall Street is simple: the policy winds are turning; don’t wait until your clients demand services you haven’t built.

Larry Fink’s Bitcoin Pivot: From Skeptic to Macro Hedge

Armstrong was not alone on stage at DealBook. Sharing the platform was BlackRock CEO Larry Fink, whose evolving stance on Bitcoin has become a symbol of the broader institutional shift.

In the Decrypt interview and subsequent write‑ups:

Fink acknowledged that his early skepticism about Bitcoin was misplaced and now explicitly compares it to “digital gold” and a hedge in times of financial and geopolitical stress. ^[22]
He described Bitcoin as an “asset of fear” – something investors own when they worry about physical safety, capital controls or the long‑term erosion of fiat assets via deficits and inflation. ^[23]
BlackRock’s iShares Bitcoin Trust (IBIT), launched in early 2024, has grown into the largest U.S. spot Bitcoin ETF, with reports putting its market cap above $70 billion, cementing the asset manager’s role at the center of institutional Bitcoin exposure. ^[24]

Together, Armstrong and Fink sketched a picture in which:

Congress is advancing clearer rules,
Wall Street is building products and infrastructure, and
Crypto is treated less as a speculative sideshow and more as a strategic macro asset and payment rail.

A Global Wave of TradFi–Crypto Integration

The Coinbase pilots are the headline, but they sit within a much broader pattern of banks embracing digital asset infrastructure as of early December 2025.

European Banks Build Their Own Euro Stablecoin

In Europe, a consortium of ten major banks – including ING, UniCredit and BNP Paribas – has formed Qivalis, a new company that plans to launch a euro‑pegged stablecoin in the second half of 2026. ^[25]

Key details:

The project is explicitly framed as an effort to counter U.S. dominance in digital payments.
Qivalis will be based in Amsterdam and led by Jan‑Oliver Sell, who previously ran Coinbase’s German business, underscoring how crypto‑native experience is migrating into mainstream banking. ^[26]

Rather than partnering with an exchange for euro stablecoins, these banks are choosing to build their own infrastructure – but the strategic goal is similar: keep bank deposits relevant in a tokenized world.

Bank of America Expands Crypto ETP Access

Back in the U.S., Bank of America has announced that, starting January 5, 2026, wealth advisers at Bank of America Private Bank, Merrill and Merrill Edge will be allowed to recommend crypto exchange‑traded products to clients, with no minimum asset threshold. ^[27]

The bank:

Previously restricted access to Bitcoin ETFs to high‑net‑worth clients;
Now positions a 1–4% allocation to digital assets as potentially appropriate for investors comfortable with volatility;
Cites easing regulation under President Donald Trump and increasing institutional demand as reasons for widening access. ^[28]

While this move doesn’t rely directly on Coinbase, it reinforces the narrative that major institutions are normalizing crypto exposure inside traditional wealth‑management channels.

A New Blockchain Bank – and 24/7 Dollar Rails

Another development this week: former Signature Bank executives have launched N3XT, a blockchain‑based bank using Wyoming’s special‑purpose depository institution (SPDI) charter. ^[29]

According to Reuters:

N3XT will run 24/7 U.S. dollar payment rails oriented toward digital asset clients.
It will not make loans; all deposits will be fully backed by cash or short‑term Treasuries, with reserves disclosed daily.
The model aims to avoid the maturity mismatch and liquidity crunch that contributed to Signature’s 2023 collapse.

N3XT’s design illustrates how some banking entrepreneurs are effectively rebuilding payment and custody functions from the ground up with blockchain at the core.

Traditional Exchanges Move Deeper Into Crypto

In Europe, Germany’s Deutsche Börse has struck a strategic partnership with crypto exchange Kraken, initially giving Kraken clients access to the 360T foreign‑exchange platform and laying groundwork for white‑label crypto trading and custody products for banks and fintechs. ^[30]

Pending regulatory approval, some Eurex derivatives may eventually be tradable via Kraken as well – another example of incumbents and crypto firms meeting in the middle rather than competing from separate universes.

Cooperation and Confrontation: Banks’ Lobbying vs. Their Pilots

Interestingly, the quiet collaboration between banks and Coinbase exists alongside growing regulatory friction.

Bitbo’s summary of recent lobbying highlights that:

The Bank Policy Institute (BPI), chaired by JPMorgan CEO Jamie Dimon, warned Congress that stablecoins could erode the traditional credit‑creation model, and pushed for stricter language in the GENIUS Act. ^[31]
Community bank associations have urged regulators to deny Coinbase a national trust charter, arguing that the exchange’s custody and rewards programs pose competitive and consumer‑protection risks. ^[32]

Coinbase’s chief legal officer Paul Grewal has responded by accusing bank lobbyists of trying to dig “regulatory moats” to protect incumbents rather than consumers – a charge he’s repeated across blogs and social media. ^[33]

The net result is a paradox:

Front stage, some banks and trade groups warn loudly about crypto risks.
Back stage, many of those same institutions are quietly using Coinbase to explore how stablecoins and custody might fit into their future business models.

What It Means for Coinbase – and for Investors

For Coinbase, the bank pilots reinforce a strategic shift that has been visible in its financials and stock performance throughout 2025.

As Bitcoin has rebounded into the low $90,000s after a volatile November, COIN shares have climbed back into the high‑$270s, closing at $276.92 on December 3 and $274.05 on December 4. ^[34]
Analysts note that crypto‑linked stocks, including Coinbase, have rallied alongside renewed ETF inflows and expectations of a Federal Reserve rate cut. ^[35]

More importantly for long‑term investors, Tekedia and other commentators argue that:

Coinbase is gradually reducing its dependence on volatile retail trading fees,
And growing higher‑margin, recurring infrastructure revenues from enterprise clients – including banks that use its custody, settlement and prime‑brokerage tools. ^[36]

If the pilots with JPMorgan, Citi and Bank of America graduate into full‑scale integrations, Coinbase could become a sort of neutral “plumbing layer” for on‑chain finance, akin to how cloud providers power much of today’s web behind the scenes.

Why This Matters Beyond Crypto

Even for readers who never plan to own Bitcoin or USDC, the experiments unfolding in December 2025 could matter in very practical ways over the next few years.

If pilots like these succeed and regulators are satisfied:

Payments could settle in seconds instead of days, especially across borders.
Fees on remittances and corporate transfers could fall sharply, as tokenized dollars replace some correspondent‑banking chains.
Wealth‑management products could routinely include small allocations to digital assets, packaged inside regulated ETFs and managed accounts.
Banks might compete less on who has the best app and more on who offers the most efficient rails, whether those rails are on‑chain or off.

That’s the deeper story behind headlines about Coinbase and “big banks partnering on crypto pilots.” It isn’t just about one exchange signing three mega‑banks. It’s about traditional finance testing whether its future balance sheet, payments network and custody stack will run partly on blockchains