Digital assets are entering a new phase of institutional integration, according to Silicon Valley Bank, which says the industry is shifting from experimentation to embedded financial infrastructure. After a period marked by volatility and regulatory uncertainty, 2026 is shaping up to be the year when crypto technologies become part of mainstream banking, treasury management and capital markets operations.
Anthony Vassallo, senior vice president of crypto at Silicon Valley Bank, said institutional adoption is accelerating as clearer regulatory frameworks and stronger compliance standards take hold. Rather than focusing purely on price cycles, financial institutions are increasingly investing in custody services, lending platforms and settlement systems built around blockchain rails. The emphasis is moving toward production level systems that connect directly with existing financial plumbing.
Venture capital activity reflects that shift. While total deal counts have moderated, average investment sizes have increased as capital concentrates in firms with scalable infrastructure and enterprise ready products. Investors are directing larger checks toward custody providers, tokenization platforms, stablecoin issuers and companies building compliance aligned services. This suggests a maturing market where funding is tied more closely to long term adoption prospects than short term speculation.
Stablecoins are central to this transformation. Dollar backed tokens are increasingly viewed as a digital extension of the traditional banking system, offering near instant settlement and programmable payment features. Regulatory frameworks introduced in major jurisdictions, including the United States and the European Union, have strengthened reserve requirements and disclosure standards. As oversight becomes clearer, banks and corporations are exploring stablecoins for cross border payments, treasury operations and liquidity management.
Traditional financial institutions are also expanding their crypto capabilities. Large banks have moved into custody and collateral services for digital assets, while others are testing token based settlement solutions. The boundary between crypto native firms and established banks is narrowing as both sides pursue full stack service offerings. Industry consolidation is expected to continue as exchanges, custodians and infrastructure providers combine to offer integrated platforms.
Tokenization of real world assets is another growth area highlighted in the bank’s outlook. Onchain representations of cash equivalents, government securities and money market instruments have grown significantly, supported by asset managers seeking faster settlement and improved transparency. By placing traditionally offchain assets on blockchain networks, institutions can reduce operational friction and enhance liquidity management.
Artificial intelligence is also intersecting with crypto infrastructure. A growing share of venture capital in the sector is flowing to companies building AI enabled wallets, automated compliance tools and agent based transaction systems. These technologies aim to make blockchain interactions more seamless for users while embedding digital assets into everyday financial applications.
The broader narrative emerging from institutional reports is that digital assets are evolving from a standalone sector into a foundational layer for modern finance. Rather than remaining confined to trading platforms, blockchain based systems are being integrated into custody, settlement and capital market workflows.
