Banks Fear Blockchain Because It Cuts Their Fees

A new panel discussion in Paris revealed that big banks are hesitant to use public blockchains. The main reason, according to a top executive from a $1. 74 trillion asset manager, is that blockchain technology removes the need for banks to act as middlemen in transactions. When a smart contract can settle trades instantly, the fee that banks usually earn disappears. The speaker pointed out that many traditional finance models are built around collecting these transaction fees. If a blockchain can do the job more cheaply, those revenue streams are threatened. This creates a clear conflict between innovation and profit for the industry.To illustrate cost savings, the executive shared data from a tokenized money‑market fund that ran on a public blockchain. The average cost per transaction dropped from about $1. 30 to $1. 13, a noticeable reduction for large volumes of trades. Meanwhile, the same asset manager announced a partnership that will let institutional investors move assets between stablecoins and their tokenized fund using an on‑chain workflow. This shows that banks are still looking for ways to keep custody services, but they must adapt to the new technology. Ultimately, the shift toward digital assets will depend on creating standardized, low‑cost compliance systems. Even though some users value privacy and independence, most investors will still prefer a regulated custodian to protect their holdings.