Wallets & Liquidity: The On-Chain Flow Battle for Bank Access

The core battleground for bank revenue is no longer just about interest rates or fees. It is the wallet. As EY's digital assets leaders argue, the wallet is the strategy. Whoever controls this interface controls the client relationship, as it becomes the indispensable gateway for storing, moving, and managing tokenized value across payments, assets, and stablecoins.

This shift is powered by a massive flow of on-chain liquidity. Stablecoins now comprise 30% of all on-chain crypto transaction volume, a key catalyst for programmable transaction chains. This volume, which reached over $4 trillion in a single year, represents a new form of capital efficiency that traditional rails struggle to match. The wallet is the front door to this liquidity, making its control critical.

The strategic imperative is clear: prevent liquidity fragmentation. The goal is to ensure assets have a single, unified valuation regardless of whether they exist on-chain or in traditional form. As EY notes, stablecoins are the glue between the two worlds. For banks, ceding wallet control risks losing both the transaction flow and the valuable data that comes with it, leaving them as mere back-office handlers in a tokenized future.

Quantifying the On-Chain Flow Battle

The scale of the liquidity at stake is staggering. Global digital wallet spending reached $41.0 trillion in 2024, with wallets now accounting for 83% of all digital payment volume. This isn't just a trend; it's the dominant payment method worldwide, creating a massive, unified flow of capital that traditional banks must capture or cede.

Stablecoins are the engine driving the on-chain portion of this battle. They power $46 trillion in annual transactions, a figure that rivals the volume processed by legacy giants like Visa and PayPal. This $46 trillion represents a new, programmable layer of global liquidity that is rapidly becoming essential for cross-border payments and asset transfers.

The United States has become the epicenter of this crypto-driven transaction surge. US crypto activity surged by around 50% between January and July 2025, cementing its position as the largest crypto market by transaction volume. This explosive growth is the direct flow that banks risk losing if they don't integrate wallet and stablecoin access into their core offerings.

Catalysts and Risks: The Path to Wallet Dominance

The path to wallet dominance is now paved with regulatory legitimacy. Last year's passage of the GENIUS Act marked a critical turning point, conferring formal recognition on stablecoins and accelerating their integration into mainstream finance. This legislative catalyst has created a clear mandate for banks to act, as EY's Mark Nichols notes that the banking industry can't ignore the changes this momentum is driving.

The primary risk for banks that delay is fragmentation. The entire tokenized finance model relies on a unified valuation between on-chain and off-chain assets. If a bank's wallet ecosystem cannot seamlessly bridge these worlds, it risks becoming a disconnected node. As Nichols explains, stablecoins are the glue between the two worlds, and without that bridge, trust in the system erodes. This fragmentation would isolate banks from the programmable, high-efficiency flows that are redefining capital markets.

The strategic choice is now binary. Banks must decide whether to build their own wallet infrastructure, acquire a crypto-native platform, or partner with an existing provider. Their decision will directly determine their future access to the $46 trillion in annual stablecoin transactions and the unified liquidity that flows through the wallet. As EY's analysis concludes, who provisions the wallet will win the client relationship. The clock is ticking.