Bridging traditional finance and crypto: ETFs, stablecoins, tokenized funds and banks

Traditional finance and crypto are no longer separate worlds. As of October 2026, you can reach crypto through a brokerage ETF, banks can hold it for customers, card networks settle in stablecoins, and Wall Street funds issue shares as blockchain tokens. This guide explains each bridge and what it means for you.

What "TradFi" means and why the bridge matters

"TradFi" is shorthand for traditional finance: banks, brokerages, asset managers, card networks and payment systems. These firms move most of the world's money under long-established rules.

Crypto offered an alternative system with its own rails. For years the two kept their distance, partly because regulators discouraged banks from getting involved. That changed quickly in 2024 and 2025, and the result is a set of bridges that let money and assets move between the two worlds in regulated ways.

Spot crypto ETFs

The most familiar bridge is the exchange-traded fund. On January 10, 2024, the SEC approved the first US spot bitcoin exchange-traded products, which hold actual bitcoin rather than futures contracts. Spot ether ETFs followed and began trading on July 23, 2024.

In September 2025 the SEC approved generic listing standards that let exchanges list qualifying commodity-based products, including some crypto funds, without a separate rule filing for each one. Since then, US funds tracking several other assets have launched.

An ETF lets you get price exposure in a normal brokerage or retirement account, with no private keys to manage. The trade-off is that you own fund shares, not coins: you pay an annual fee, can trade only during market hours, and cannot send the shares to a wallet. Our crypto ETFs guide covers the details.

Stablecoins in payments and the GENIUS Act

A stablecoin is a token designed to hold a steady value, usually one US dollar, backed by reserves such as cash and short-term Treasuries. Stablecoins are the crypto product most used for actual payments, from cross-border transfers to business settlement.

The GENIUS Act, signed into law on July 18, 2025, created the first federal framework for payment stablecoins. It sets rules for who may issue them, requires reserve backing and regular disclosure, and places issuers under federal or state supervision.

Our stablecoins hub compares the major dollar stablecoins, their reserves and their regulatory status.

Tokenized Treasuries and money market funds

Tokenization means representing ownership of a traditional asset as a token on a blockchain. The most developed example is the tokenized money market fund, which holds short-term US government debt.

• Franklin Templeton BENJI. The Franklin OnChain U.S. Government Money Fund launched in 2021 and was the first US-registered money market fund to use a public blockchain as its official record of ownership. One fund share equals one BENJI token, and it started on Stellar before expanding to other networks.
• BlackRock BUIDL. The BlackRock USD Institutional Digital Liquidity Fund launched in March 2024 on Ethereum, with Securitize as tokenization provider. It was BlackRock's first tokenized fund on a public blockchain and is aimed at institutional investors.
• Ondo Finance. Ondo issues tokenized Treasury products such as OUSG, built for institutional investors, and USDY, a tokenized note backed by short-term Treasuries and bank deposits. The ONDO token is a governance token and gives no claim on those assets.

Why does this matter? Tokenized funds can move between approved holders around the clock and can serve as collateral in on-chain markets. For most individuals, though, eligibility rules limit access, and the underlying risk is the same as the fund itself. Browse our real-world assets category for related tokens.

Tokenized gold

Gold was one of the first real-world assets to be tokenized. The two largest examples work in a similar way: each token represents one fine troy ounce of gold on a London Good Delivery bar held in a vault.

• PAX Gold (PAXG) is issued by Paxos, with gold held in London. Paxos converted to an OCC-supervised national trust bank after receiving approval in December 2025.
• Tether Gold (XAUT) is issued by a Tether company, with gold stored in Switzerland and quarterly reserve reports.

Both track the price of gold, not the dollar. Before buying, check redemption terms carefully: getting physical metal back usually requires large minimums or whole bars, and fees apply.

Banks and crypto after the 2025 rule changes

For several years, US bank regulators discouraged banks from crypto activity. In 2025 most of those barriers came down. The key steps, in order:

In practice, more banks and brokerages now offer crypto custody, trading or stablecoin services, and some crypto firms have become federally chartered trust banks themselves. Circle, for example, announced final OCC approval for its national trust bank in July 2026.

ISO 20022 and the payment rails

Behind the scenes, bank payment systems have moved to a common message format called ISO 20022. Fedwire switched on July 14, 2025, and Swift's cross-border payments followed when coexistence with the old format ended on November 22, 2025.

This is an important upgrade for banks, but it is about message formats, not about which assets they use. It does not approve or require any cryptocurrency. Our ISO 20022 guide separates the facts from popular myths.

Swift is also experimenting with blockchain technology directly. It announced a blockchain-based shared ledger in September 2025 and said in July 2026 that the ledger was ready for initial use, with 17 banks preparing to pilot tokenized deposit payments.

Card networks and payment firms using stablecoins

Some of the clearest real-world use of crypto is happening inside payment companies, often invisibly to consumers.

• Visa launched USDC settlement in the United States in December 2025. Cross River Bank and Lead Bank began settling with Visa in USDC over the Solana blockchain, with broader US availability planned through 2026. Card users see no change.
• Mastercard said in 2025 it would enable several stablecoins, including USDC, PYUSD, USDG and FIUSD, across its network and joined Paxos' Global Dollar Network.
• Stripe completed its acquisition of the stablecoin infrastructure company Bridge in February 2025 and has since expanded stablecoin payment tools for businesses.

The common thread is settlement: moving money between institutions faster, including on weekends, while the customer experience stays the same.

How the bridges fit together

These pieces increasingly work as one system. A simple example shows how.

A business abroad pays a US supplier in a dollar stablecoin. The supplier's payment provider receives the stablecoin and, if the supplier wants dollars in the bank, redeems it with the issuer. The issuer holds its reserves partly in short-term Treasuries, sometimes through money market funds. Meanwhile a card network might settle with a bank in the same stablecoin over the weekend, and the bank might keep some of its customers' crypto in custody under the 2025 rules.

No single step is exotic. Each relies on a traditional institution, such as a bank, fund manager or card network, using blockchain rails for part of the job. That is the real story of TradFi and crypto in 2026: gradual plumbing changes rather than one dramatic switch.

Risks that come with the bridges

Regulated wrappers reduce some risks and add others. Keep these in mind:

• Issuer and custodian risk. With stablecoins, tokenized funds and tokenized gold, you depend on an issuer's reserves, records and redemption process. USDC briefly lost its dollar peg in March 2023 when some of its reserves were stuck at the failed Silicon Valley Bank.
• Technology risk. Tokens live in smart contracts and wallets. Bugs, lost keys or sending to the wrong address can cause losses that a bank cannot reverse.
• Access limits. Many tokenized funds are open only to institutions or qualified investors, and issuers can freeze tokens to meet legal requirements.
• Rules still settling. GENIUS Act regulations are not final, and agency guidance can change with new leadership. Treat today's rules as a snapshot.
• Fees. ETFs charge annual expense ratios, tokenized funds charge management fees, and redemption of tokenized gold carries its own costs.

What it means for regular people

These bridges make crypto easier to reach and, in some cases, better supervised. They do not remove risk.

• Easier access. You can buy crypto exposure in a brokerage or retirement account, and more banks can offer crypto services.
• Same price risk. An ETF or bank-held position still rises and falls with crypto markets. Use the habits in our risk management guide.
• Know what you own. An ETF share, a stablecoin, a tokenized fund share and a coin in your own wallet each come with different rights, protections and fees.
• Self-custody is still an option. If you want direct control, our wallets guide explains how. If you prefer a regulated custodian, that path is now wider than before.
• Taxes still apply. Selling crypto, ETF shares or tokenized assets can trigger taxes. See our crypto tax guide.

For ongoing coverage of laws and rule changes, see our laws and regulations hub.

Questions to ask before using any bridge

1. What exactly do I own? Fund shares, a claim on an issuer, or a coin I control?
2. Who holds the underlying asset, and who supervises them?
3. How do I get out? Check trading hours, redemption rules, minimums and fees.
4. What protections apply? Brokerage, bank and stablecoin protections differ, and none of them protect you from price falls.
5. Is the offer coming through a channel I trust? Use your own brokerage, bank or a reputable exchange, as covered in how to buy crypto safely.

Updated October 4, 2026 by The Crypto Guide editorial team. Educational content, not financial, legal or tax advice. Spot an error? Request a correction.