Large Incumbents Moving Downmarket
Erebor
The real threat is that the biggest banks can copy enough of the product while starting with the customers Erebor still has to win. J.P. Morgan already runs blockchain based deposit and settlement infrastructure at enormous scale through Kinexys, while BNY and State Street are adding reserve custody, cash accounts, and digital asset servicing inside relationships with issuers, asset managers, and treasury teams that already trust them with core money movement.
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Kinexys is not a lab project. J.P. Morgan said at its 2025 investor day that the business had processed nearly $2 trillion since launch, and its blockchain platform already supports deposit accounts, settlement, and tokenized asset workflows. That is the clearest proof that an incumbent can bring on chain cash tools into mainstream transaction banking.
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BNY is moving from generic custody into stablecoin plumbing. Ripple selected BNY in July 2025 as the primary reserve custodian for RLUSD, and BNY also provides transaction banking services around that program. That places BNY directly inside the reserve, redemption, and operating cash stack that newer crypto native banks want to own.
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State Street is building the same bridge from the other side of the market. It says it supports regulated stablecoin issuance through dedicated Stablecoin Reserve DDA accounts and is deploying Taurus software for custody, tokenization, and blockchain connectivity. That means a large custodian can bundle on chain cash infrastructure with existing fund servicing and custody mandates.
The next phase is a race between focus and distribution. Erebor can still win customers that large banks underwrite slowly, especially crypto native operators and newer stablecoin businesses. But as incumbents productize programmable deposits, reserve banking, and digital asset servicing, the market will reward whichever provider becomes the default operating bank before these capabilities turn into standard bank features.