Banks and fintechs have three ways to offer crypto
Paxos outlines three operating models for banks and fintechs offering digital assets: build in-house, stitch vendors or use one regulated partner. (Read More)
Asanat Analysis — Why it matters
Paxos's framework codifies a maturation pattern in crypto infrastructure: the shift from monolithic platforms toward modular, integrated solutions. Banks and fintechs historically faced a binary choice—build proprietary stacks (costly, slow) or rely on unregulated third parties (compliance risk). The three-model thesis reflects industry recognition that regulated custodians and infrastructure providers now offer sufficient operational depth to serve as primary partners, reducing the need for expensive internal crypto engineering.
This signals a critical inflection point for regulated crypto service providers. Legacy financial institutions remain cautious about crypto but increasingly view it as a product distribution problem rather than a technology problem. Paxos's positioning as the 'one regulated partner' option directly competes with Coinbase Prime, Kraken, and emerging infrastructure players, but legitimizes the wholesale adoption model itself. The framework also implies regulatory consensus is solidifying enough that banks can outsource crypto compliance to a single vetted vendor without material regulatory friction—a material shift from 2022-2024 dynamics.
For the sector: expect consolidation among infrastructure providers and accelerated banking partnerships in 2025-2026. The 'stitch vendors' model suggests emerging API standards and interoperability expectations that will challenge smaller, single-purpose crypto service providers. This is net-positive for established regulated platforms but negative for fragmented, unregulated players.