Institutional players are up to new tricks. Recently, a blockchain financial company’s move to apply for a federal trust bank license has sparked heated discussions. Their core business targets the institutional stablecoin ecosystem—issuance, custody, and exchange in one seamless process. Over the past year, they secured $3.3 billion in institutional orders. What’s behind this operation?

Simply put, it’s about transforming stablecoins from the "gray area" into the "mainstream." Institutional funds have a strong demand for stablecoins, focusing on efficiency and compliance. But the problem is that traditional banks are generally reluctant to engage with crypto assets. So, some players have decided to obtain their own banking licenses to seamlessly connect stablecoins with traditional finance—b bypassing middlemen.

The logical chain is quite clear. First, compliance licenses have become a hard requirement for institutional entry, giving stablecoin services a legal framework and directly lowering barriers to entry. Second, Wall Street and traditional financial institutions’ funds may shift massively toward the crypto market, with stablecoins serving as the most convenient transition channel. Third, this custody and exchange model could potentially unlock cross-chain ecosystems in the future, making stablecoin applications on public chains like Solana, Polkadot, and Avalanche even more attractive.

But risks must also be clearly understood. U.S. regulators’ attitudes toward "crypto banks" are often unpredictable, and the outlook for license approval remains uncertain. Meanwhile, there are many competitors—various stablecoin issuers have long been eyeing institutional orders, and this company's moat may not be very deep. Ordinary investors should be especially cautious; the volatility of institutional-grade stablecoins could be much more sensitive than expected. Don’t follow the trend blindly.

This indeed seems like a new battleground between traditional finance and the crypto world. Ultimately, it all depends on how regulators decide.