The Breakdown - Fintech Might Absorb Crypto | The Breakdown

Episode Date: February 24, 2026

With no clear external enemy left, crypto may be facing its next antagonist: fintech. This episode explores whether crypto is winning — or being domesticated. Plus, a conversation with Nick Almond. As always, remember this podcast is for informational purposes only, and any views expressed by anyone on the show are solely their opinions, not financial advice. – Follow Blockworks Research: https://x.com/blockworksres Follow Nick: https://x.com/DrNickA Follow David: https://x.com/dcanellis — Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/ —-- Timestamps: 00:00 Intro (01:42) The Birth of TradFintech (05:04) Make Way, Crypto Natives (08:55) Rising Tides (10:40) DAS Promo (11:30) Interview with Nick Almond - - Disclaimer: Nothing said on The Breakdown is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Host and guests may hold positions in the companies, funds, or projects discussed.

I think we can all agree that it's looking like a bear market for crypto. The real question is how long it will last? And we could sit here and count all the reasons why we're headed for another winter. The dad flywheel ran out of fractal steam perhaps. Or it's all part of the four-year halving cycle, which many had believed wasn't relevant anymore. But it turns out that crypto is just as cyclical as ever. Maybe it's all political and crypto is collateral damage in the fewer all surrounding the Trump administration's handling of the Epstein files. Or it's social, with the general public really not interested anymore.

The very vocal reaction to Coinbase rug-pulling Backstreet Boys' karaoke in the middle of the Super Bowl would then be a proxy for retail sentiment across the board. The real explanation could be much more visceral than any of that. The reason crypto is down, and not just even the prices, but culturally speaking as well, is because there are just no enemies left. The US government no longer an issue, and fraudsters and blowhards like Doe Kwan, Alex Mashinsky and SBF all on gone. Securities regulators, also much more amenable under Trump with former SEC. seat-chaired Gary Denzel being the last great unifying villain that Crypto has ever had to rally against. At this point, I would probably say that we're now destined to witness crypto go straight

PVP. In fact, I wrote as much in August last year. And now, nearly six months later, I'm struggling to pinpoint exactly who Crypto would be fighting events internally, outside of perhaps Ethereum Layer 2, given Vitaly's recent Netium. And then it dawned on me. FinTech. FinTech might not be Crypto's enemy, per se, but it's clearly meant to be Crypto's

antagonist for the next cycle. I'm just not sure either camp realizes it yet. I'm your host David Canellis, and this is The Breakdown. Let's get to it. Nothing said on The Breakdown is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are opinions, not financial advice. Host and guests may hold positions in the company's funds or projects discussed.

First, I want to draw your attention to what was happening this time last decade, not within crypto, but within finance, or what we would now call TradFi. The world had just watched Uber and Airbnb totally disrupt the taxi in hotel industries and mapped those expectations onto fintech startups. But banks were a whole different beast to taxi companies and hotel chains. Joshua Reich, who co-founded Simple, regarded as the first neobank, told the Wall Street Journal in late 2015 that he'd founded the company with the idea that by just not sucking, we will win.

We had a little bit of bravado back then, but there's a reality that to be in financial services, you have to work with banks. But that made for a complicated relationship between the fintechs, who were initially positioned to be combative, and the tradfai types. The article goes on to explain that banks not only competed with the upstarts for customers, but also provided some of the key infrastructure they needed to grow. Lenders, for instance, can offer capital, depositors and expertise with dealing with regulators, while banks hope to secure greater access to younger customers through their partnerships with

and acquisition of fintech startups. It's this dynamic that feels eerily similar to what's happening with crypto and fintech right now. I'm going to battle off a few old quotes for you real quick. Take a look at what Dwellar co-founder Ben Mild sent back then. Time humbles you. Working with banks is the difference between running a sustainable business and just another venture-funded experiment. Brett King, CEO of Mobile Banking App Moven, who once wrote in 2010 that the death of retail banking is here, later said that if I have my disruptors hat on all the time, they will just see me as the enemy. And while all the acquisitions

were probably inevitable and not really unique to what happened to Fintech, most telling of all was something that Simples then-Com's chief, Krista Berlincourt said, in reference to a visit from BBVA's bankers and lawyers after the Spanish banking giant bought simple in 2014. We're a little younger and nerdier, but I like to think of us as one fantastic extended family, she said. And okay, that was then. Now it's 2026 and we've got about two dozen marking companies across all of finance integrating with crypto, mostly by accepting stable coin payments or offering custody and trading services in partnership with crypto natives. And that's actually divided across the more Tradfi type incumbents like FIS, FIS, FISA,

Western Union, Mastercard, MoneyGram, Visa and Walsh. But also newer fintechs are incorporating crypto and blockchain into their core products. Maybe to keep up with PayPal, including Remitly, Checkout.com, Stripe and Robinhood. It's at this point that you might start to wonder whether crypto is eating fintech's lunch in the same way that Mark and Driesen once said the software is eating the world. We did even replace software with crypto and online with on-chain in Mark's original essay from 2011 and we would end up with something that pretty much sums up the current state of fintech and traditional finance more broadly, with more and more major businesses and industries being run on-chain and delivered as crypto services.

So we're now in a situation where we are witnessing FinTech's most powerful players strengthening their own offerings, both by using the existing chain infrastructure and by building their own crypto rails. Soon, Stripe will have its own chain, tempo, and FinTech stable coins like Clana USD will be piped through Stripe's massively popular payments platform. Robin Hood will have its own Ethereum layer two and offer tokenized stocks to its 27 million funded users. users. When you zoom out, it seems like it was always inevitable, but the reality is that crypto is happening on a very small stay within Tradfai. Visa has previously said that a stable coin settlement volume has reached an annualized run rate

of 4.6 billion dollars. That's probably not reflective of actual customers spending USDC as they would their credit cards, and more to do with Visa or partners in Visa's network, using stable coins to move money between institutions as part of settlement flows, funding and treasury movements, large payments between two parties rather than relying on legacy bankwise. And if there is really $4.6 billion in stable coin settlements occurring within Visa's payments ecosystem over a single year, that would only amount to 0.032% of Visa's total payments volume for 2025. That's about one-third of one-tenth of 1%. The cynical read here is that rather than eating fintech alive

and winning outright, crypto has become a tool for fintech incumbents to leverage a highly engaged but much smaller ecosystem to do their marketing for them. That the appearance of being technologically progressive as in open to treating stable coins as the same as any other form of digital cash is enough to modernize branding and market positioning across both Tradfai and FinTech. And if it helps bring in fee revenues that otherwise wouldn't have been captured no matter how small, then that's good enough. It's also a great hedge for when trillions of dollars flows into stable coins over the next four or five years as predicted by US Treasury Secretary Scott Besant. Stablecoin legislation back

by US treasuries or T-bills will create a market that will expand U.S. dollar usage via these stable coins all around the world. Two trillion is a very reasonable number, and I could see it greatly exceeding that. And besides, crypto wins regardless. While Ethereum, Arbitrum, Solana and Stella didn't really need legitimizing, PayPal effectively did exactly that when it rolled out its own stable coin on those networks. It's difficult to quantify, but PayPal launch in its own stable coin may have triggered a deep foundational shift in how TradFi and FinTech perceived the value and utility of tokenization on public chain networks. The real trickies then, of course, demonstrating that users actually want to use those stable coins.

And at least in PayPal's case, that does appear to be true. PayPal USD in the past six months has grown its total supply from under $1.2 billion, generally $4 billion, thanks in no small part to PayPal realizing that incentives are what makes the difference when it comes to finding traction with crypto users. and quickly establishing his own earn program, which at least in the US pays out a percentage yield on PYUSD deposits held in PayPal and Venmo. So what's the not so cynical read? It would be that crypto is indeed eating the fintech world, and over the coming decade we will see the rest of fintech capitulate and start rolling out on-chain services or else be left behind as the rest of the global economy shifts onto crypto rails.

On a long enough timeline, all companies become crypto companies and all that. That may well prove to be true, but I want to caution you in taking such an easy road through all of this. Fintech may be realising that there are efficiencies to be had and fees to be earned by understanding how they'll fit into the new on-chain economy. But the sheer size and weight of these institutions, and not just the trad-fi ones, but the Fintech unicorns turned incumbents themselves, means that they have their own gravitational pulls. And when Nick Armand, the head of governance at the Gito Foundation, explained in a recent episode

of the breakdown that the Overton window has shifted in terms of decentralization in crypto, it's worth asking both who and what caused it to shift and why. It's a broad generalisation, but it's one that largely rings true. Tradfi, for the most part, absorbed FinTech, either by outright buying the competition or funding their way into their cap tables, to the point that the line between Tradfai and FinTech was and still is a distinction without a difference in most cases. Squint your eyes and turn your head a bit and you'll see what's happening with crypto looks eerily similar, into Continental Exchange investing in Polymarket, for instance, or Stripe

acquiring bridge or MasterCard's push to buy up zero hash. And so the question is then this. exactly when does crypto become just a way for FinTech giants to gain access to a younger, more degenerate audience in the same way that FinTech was once a gateway for TradFi to find new customers. It's worth thinking about what happened to FinTech, which was essentially domesticated as it was absorbed by traditional finance and whether crypto could be about to be absorbed by FinTech. The truth could even be more bleak than that, that crypto is fast becoming a feature within FinTech rather than a standalone alternative. The way things are

going, it will be FinTech that owns the user relationship while crypto is the back-end plumbing. Fintech is monetizing stable coins, crypto debit cards and treasury operations, while crypto tokens themselves are capturing less value than many expected. And this is only going to get worse as Fintech builds their own crypto rails so as to maximize their own potential upside if and when their presence in the crypto space converts to real users, revenue and mine share. There's a real risk here that whatever value Fintech brings to crypto will accrue to the interface, owned by the Fintech giants themselves, and not to any particular chain ecosystem

and its associated native coin. Now, all crypto can hope for is that the tempos and the Robert Hood chains will be so popular with fintech users that capital really does flow into their networks and stable coin product and then flows out again into the rest of the crypto-a-system. A rising tide lifts all boats, crypto, trad-fire or otherwise, but only if they're in the same waters, the same extended family. If the reason crypto is down really is because there isn't any grand unifying antagonist to rally against, then perhaps what's missing is a sense of rivalry.

And that might only come if there is a clear differentiation between FinTech, the world of trusted third parties, and the crypto-slash blockchain eco-system. I put all of this to returning guest, Nick Armand, and here's some of what he had to say. Quick break before we continue. Blockworks's flagship institutional conference, Digital Asset Summit, is back in New York City this March 24th through 26th. Das brings together allocators, asset managers, policy makers, and the builders actually shaping crypto's next phase. Not the hype cycle, but the infrastructure and capital behind it. This year summit represents over $4 trillion in assets under management, with more than 150 speakers and 750 institutions in attendance. Speakers include leaders from firms like BlackRock

and Franklin Templeton, senior policy makers and regulators. Don Wilson of DRW will be there, alongside core crypto infrastructure teams across Bitcoin, Ethereum and Stablecoins. If you're looking for a serious institutional grade view of where digital assets are headed in 2026, this is where that conversation happens. Use code breakdown 200 for $200 off. Learn more at blockboats.com slash events. Now, back to the show. With me is returning guest Nick Armand, their head of governance at the Judo Foundation. Welcome back, Nick. Hi, David.

Good, see you again. Cool. Okay, so the topic of today is, yeah, FinTech and whether crypto is becoming fintech or the other way around, whether fintech is going crypto. So I suppose a good way to start this is, you know, Solana is so crypto-native. And J-DOTA itself is also crypto-native within that context, too. So do you feel like you're working in fintech or do you feel like you're working in fintech? or do you feel like you're working in crypto these days? It's an interesting question.

I do feel like Gito feels very crypto to work at. Attitude, sort of the pace, frontier technology. It certainly doesn't feel like what I conceptualize fintech as. Is it getting more institutional? It's more of the conversation becoming about how we interact with institutions and is more of it becoming about conversations around ETFs and ETPs and custodial integration, things like that. Yeah, absolutely.

There's more of the conversation is increasingly taking institutional form, but it's also, you know, frontier technology. And we're sort of deep in architecting how blocks are built. And it feels very new in that sense. It's new market structure and a new world that we're playing in. But there is certainly an element of the synthesis happening. between the sort of traditional world and crypto. Yeah, and it's difficult because, yeah, the frontier technology thing,

by warrant of that definition, you're going to start with a relatively small user base and then have to go out and find new users. And when it comes to financial technology, those users are with fintech companies or with, you know, very modern and technologically progressive tradfi firms that understand how to roll out a very good consumer app.

So it's inevitable that you have to, you know, I don't want to say like poach the users of fintech, but you are playing for the same market. So, you know, when you see fintech's, you know, rolling out their own crypto integrations and targeting the crypto audience, are you kind of looking at that as well? They're coming for crypto users or they are trying to bring cryptocurrency. to their user base. I guess is the question. Yeah, this is an interesting question.

I think there's certainly an element of these large banks looking at the kind of users that are in crypto. You know, they're Zoomers, digital natives. Are they using this as a kind of sort of as you mentioned in your speech at the beginning. Is it just marketing? Are we just adding, tacking on crypto to access Zuma deposits? And I think there's an element of that and there is a value for them to do that, right? To appear to be a modern bank pushing into frontier technology and consequently I trust it more to stay relevant. And I think there's an element of that.

One of the most heartwarming things are like one of the things that may be the most optimistic that FinTech giants like kind of do get it was, I mean, when PayPal rolled out, PayPal USD and they first rolled out like crypto support within the app. And for I think it was maybe six or eight months, it was a walled garden. It was a closed ecosystem. You could get crypto in or you could at least purchase crypto within the PayPal app, but you couldn't get it out. But eventually they did roll out withdrawal. So PayPal was then a proper on-ramp for the crypto ecosystem.

And I totally get that, you know, we don't want to say we pick on Stripes Tempo, but tempo like kind of does represent this next phase of crypto's evolution to where they are integrating more closely with fintech. And the intention there is that it is an interoperable network and all that's great. That's that it's still really dependent on how Stripe users will interact with the stuff that's on that chain and whether they do decide, well, it is going to be worth it to use Stripe as an on-rap or it's just okay that I can exist within this net. network and never really branch out into the rest of the ecosystem. And I mean, to some degree, it's all perfectly fine, but it would almost be advantageous for crypto to use fintech as a funnel to bring in, I don't want to say mass adoption, but bring in more liquidity, more usage. And I just, I just, I'm not sure how realistic that funnel will end up being just because of the

size of, of the stripes and the Robin Hood. and stuff like that. And maybe it has a lot to do with how these ecosystems are structured, you know, and then going on to Robin Hood chain, how it's an Ethereum L2. And there's a big discussion over how those are meant to monetize and really benefit the greater Ethereum network. So I guess like what I'm trying to get to is how is it that crypto can really influence the conversations still to the point where,

there is a there is a motivation for users to not just stop their crypto experience with the stripes and the robin hoods and actually go and explore on chain and kind of maximize what they're doing within the ecosystem in that context yeah i think um i think this is that do i think that there's going to be um you know trillions in stable coin liquidity uh moving into moving into onto onto blockchains over the next few years. Almost certainly. Do I think that's going to come and buy people's coins out of the trenches? No. I think there's going to be entirely different channels of where this liquidity flows through. And it's very unlikely that those two worlds will cross over, right? I think what percentage of the users that come on and end up transacting effectively on

blockchains will have that mostly abstracted from the do they even know they're using a blockchain you know tempo is the back end um but to them it's shopify and does that mean they're then going to go to a bridge you know and bridge into you know salano or onto the main net probably not i think it's an entirely different user persona so will some of it and for it practically only needs to be you know single digit percentages of that for it to really make a a big difference in the wider crypto ecosystem. But I think, yeah, largely these two worlds are going to be really quite separate, I think. I just wonder how long it is until, you know, not just the G2s, but all the different

parts of this growing ecosystem, how long is it between we need to differentiate ourselves from tradfive and fintech to where, well, we actually need to be fintech. and just own that. Because a lot of FinTech is just, it's very venture-based. It's very, it's very, it's very, it's very seed. Because there's no tokens in FinTech. This is, this is really the thing. And I would love it to be the fact that all crypto startups will have tokens.

I feel like it is going the other way. And throughout the, at least the bear market into the start of the next ball market, there won't be many token launches. So at that point, what is it that differentiates crypto from FinTech if there are no tokens? I think there will be. I don't think you can, I think the tokens are such an inevitability in crypto. And in fact, it won't be just tokens. It will be other things that are crypto-nated affordances that will be the differentiator.

For example, Gito has a Dow and the protocol is governed in a decentral. way radically different to anything that would even be considered inside Tradfi. This kind of attitude of unilateral control is crucial, foundational to, as is, you know, structured compliance and the real tension will come down to permissionlessness and like there's the features of crypto that are, that still remain, that really differentiate it's permissionless finance it has aspects of deep decentralization and has all of this new kind of economic system that is mediated by digital assets and we've not quite cracked how to

do that bit yet which is why we have we don't have many sustainable token economies and I think the pressure will be on to find that different now, I think. And I think we'll see both in that synthesis new kinds of financial technologies that will come out of the merger that are genuinely new and interesting. And we'll do a kind of cultural exchange across the boundary. But I think genuinely most of the really exciting stuff will be out at the fringes in people who are explicitly anti-corporate, who are looking for something completely new, who are doing sort of grassroots,

hacker building stuff, outside of the system, picking up a lot of the open source tools that are dropping because of the institutional funding that's coming in, is actually leaving behind a substrate of tools that can be used to create radically new things. And all of that's possible now.

You know, all we need is good people with good ideas. We're just in a little bit of funding to get them off the ground. And a lot of the problem is, is the institutionalization has already happened. Most of crypto, the reason why we don't have a flourishing app ecosystem at the moment is because they've not been funded for, you know, multiple years. We haven't funded DAPs, really,

and since the 2018 sort of cycle. So I think largely an institutionalization has already happened. We're already a kind of small subculture of real crypto builders that exist that are making the new stuff. And I think that'll just continue. I think that dynamic will, my hope is that we find some mechanism for boosting the more grassroots ecosystem initiatives, which again, I think will be a differentiator between no one, like no fintechs have a community, you know, and they don't have fans and things like that, whereas that does happen in crypto. Yeah. And it's, I mean, me and you both, we've been through multiple bare minds.

and ball markets and and this, I mean, it is still very early days. It does feel like a bear market, but this does feel different. I mean, maybe in the next six months, maybe if we speak to it, then we'll both, you know, really see that it's very grim out there. But it feels like, it feels different. It does feel a lot more optimistic of a bear market this time around. How are you feeling about that? Yeah, my theory on this is, it's, Buy a market's starting to get priced in. People are starting to accept. You know, I've heard more and more people say,

it's a bear market and we've kind of tacitly accepted that it's happening. I still think it's a bit touch and go. I don't think we deserve a full bear market this time. So my heuristic for sort of crypto bare markets is, do we deserve it? Is there enough scam that needs to be purged from the system? And I don't feel like we deserve it this time. For the first time, I think every previous bear market I felt like,

like, yeah, we absolutely deserve that. Whereas there's too much potential, there's too much moving at the kind of, at the big scale for it to feel like completely hopeless at this point, which is normally what a bear market feels like. So yeah, I'm not convinced we're going to have a multi-year full doldrums bear market. I can see us bouncing out of it soon. Let's leave it on that hopeful note. Thank you so much for joining us again, Nick.

and I'm sure we'll have you back again soon. Thanks. Cool. See you later.