Native Crypto Modules for Banks | CoreFi

In December 2024, custody firm Taurus expanded its partnership with Temenos, bringing crypto wallets and digital asset management capabilities to Temenos's 3,000+ bank clients. The announcement was significant — but it also revealed a fundamental truth about the core banking industry's approach to crypto: even the largest vendors in the market are outsourcing digital asset capabilities rather than building them natively.

Temenos and Taurus. Thought Machine and Metaco (now Ripple). Mambu and its external exchange partners. Across the industry, the pattern is the same: core banking platforms treat crypto as a marketplace integration, not as a core capability.

This approach made sense three years ago, when crypto was still seen as a niche asset class with uncertain regulatory status. It doesn't make sense in 2026, when the blockchain-in-BFSI market is valued at $5-10 billion and projected to reach $60-258 billion by 2033, stablecoin transaction volumes exceed $27 trillion annually, and MiCA has established a comprehensive regulatory framework across the EU.

The gap between what banks need and what their core banking vendors provide is widening. And for technology decision-makers, the choice between bolt-on integrations and native capabilities has become a strategic one with long-term competitive implications.

The Current Landscape: A Competitive Audit

Let's be specific about what the major core banking vendors actually offer in crypto and digital assets:

Temenos provides digital asset capabilities exclusively through its Taurus partnership, launched in 2021 and expanded in December 2024. The integration offers crypto custody, trading, tokenization, and DeFi access across 10+ blockchain protocols. But it's a marketplace integration — the crypto functionality lives in Taurus's infrastructure, not in Temenos's core ledger. Data synchronization, compliance reporting, and real-time position management all depend on API bridges between two separate systems.

Thought Machine offers a joint solution combining its Vault Core platform with Metaco (acquired by Ripple in 2023) for crypto custody, trading, settlement, and fiat-crypto bridging. Like Temenos, this is an integration between two distinct platforms, not a unified system.

Mambu supports cryptocurrency as a currency type within its ledger and has crypto-native clients like BCB Group (for SEPA connectivity) and Deblock (a French crypto current account provider). But exchange, custody, and blockchain connectivity rely entirely on external partners.

Skaleet (French origin, strong in Africa and emerging markets) has crypto payment acceptance and fiat-crypto settlement capabilities — arguably the most native crypto functionality among the competitors, though still limited in scope.

Tuum (Estonian, €25M raise in February 2024) lists "Digital Assets and Crypto" as a partner category but has no visible native module.

10x Banking (UK-based) has no visible crypto or blockchain capabilities at all.

FIS has a "Crypto and Digital Assets" page but details are thin and oriented toward large institutional clients.

The pattern is clear: no major core banking vendor offers comprehensive, native crypto and digital asset capabilities. The best available options are marketplace partnerships where crypto functionality is bolted onto the core banking system rather than built into it.

Why Bolt-On Integrations Fall Short

Marketplace integrations work well for many use cases. Payment gateways, KYC providers, and credit scoring services can all function effectively as external integrations. But crypto and digital assets present unique challenges that make the bolt-on approach structurally problematic.

The Ledger Synchronization Problem

In a bolt-on model, the bank's core ledger tracks fiat positions while the crypto partner's system tracks digital asset positions. These two ledgers must be constantly synchronized to maintain an accurate view of customer balances, risk exposures, and regulatory positions.

This synchronization introduces latency, reconciliation complexity, and failure modes that don't exist with native capabilities. When a customer converts euros to USDC, two systems must update simultaneously. When a stablecoin payment settles on-chain, the core banking ledger must be notified and updated. When regulatory reporting requires a consolidated view of all customer positions — fiat and crypto — data must be aggregated from multiple systems.

For a bank with dozens or hundreds of daily crypto transactions, this overhead is manageable. For a bank that wants crypto to be a core part of its product offering — with thousands of customers actively using stablecoin payments, tokenized deposits, or crypto trading — the synchronization burden becomes a genuine operational bottleneck.

The Compliance Gap

MiCA, DORA, and existing AML regulations require comprehensive, real-time monitoring of both fiat and crypto transactions. When these transactions live in separate systems, compliance teams face several challenges:

• Fragmented transaction monitoring: Suspicious activity that spans both fiat and crypto channels may not be detected if monitoring occurs in separate siloes
• Inconsistent reporting: Regulatory reports must consolidate data from multiple systems, introducing reconciliation risk and reporting delays
• Audit complexity: Auditors must trace transactions across system boundaries, increasing audit costs and findings risk
• Travel Rule compliance: Cross-border crypto transfers require originator and beneficiary information that must be sourced from the core banking system and transmitted with the on-chain transaction

A native crypto module within the core banking platform eliminates these challenges by maintaining all transactions — fiat and crypto — in a single compliance perimeter.

The User Experience Friction

From the end user's perspective, bolt-on integrations create seams. The customer experience of converting between fiat and crypto, managing a unified portfolio of traditional and digital assets, or making payments that span both rails is only as smooth as the integration between the two systems.

Banks that have implemented crypto through marketplace partners report common UX pain points: delays in balance updates when converting between fiat and crypto, separate authentication flows for crypto operations, and inconsistent interfaces between the banking app and the crypto widget. These friction points don't just annoy customers — they suppress adoption.

The Vendor Lock-In Risk

When a bank's crypto capabilities depend entirely on a third-party partner, the bank is locked into that partner's technology choices, pricing model, and product roadmap. If Taurus changes its API or pricing, every Temenos bank using the integration is affected. If Metaco/Ripple pivots its strategy, Thought Machine's crypto story changes overnight.

This dependency is particularly concerning in a rapidly evolving market where new blockchain networks, custody solutions, and regulatory requirements emerge frequently. A bank needs the flexibility to adapt its crypto capabilities as the market evolves — flexibility that's constrained when those capabilities are controlled by a third party.

What "Native Crypto" Actually Means

A native crypto module within a core banking platform doesn't mean building everything from scratch. It means architecting the core system so that digital assets are first-class citizens alongside fiat currencies — treated with the same ledger precision, compliance controls, and operational reliability.

Specifically, native crypto capability requires:

Multi-asset ledger: The core ledger natively supports fiat currencies, stablecoins, tokenized securities, and other digital assets on a single, unified system of record. A customer's euro balance and USDC balance appear on the same ledger, with the same transaction history, and subject to the same reconciliation processes.

Unified compliance engine: All transactions — whether fiat or crypto — pass through a single AML/KYC/sanctions screening engine. Cross-channel suspicious activity detection works automatically because all data lives in one system.

Integrated position management: Risk, exposure, and capital adequacy calculations incorporate both fiat and digital asset positions in real time, without cross-system data aggregation.

Single API surface: External systems (mobile apps, web portals, partner integrations) interact with a single API that handles both fiat and crypto operations, eliminating the need for client applications to orchestrate between multiple backends.

Modular blockchain connectivity: The platform connects to blockchain networks through a pluggable architecture that can support new networks as they emerge — but this connectivity is managed by the core platform, not by an external partner.

The Build vs Partner Matrix

Native doesn't mean building everything in-house. The smart approach is selective: build what's core to competitive advantage, partner for specialized capabilities that don't differentiate.

Here's a practical capability-by-capability assessment:

• Crypto-asset ledger and multi-asset accounting → BUILD. This is the foundation. A core banking platform that can't natively account for digital assets will always be bolting them on. Extend the existing ledger rather than creating a separate one.
• Custody and key management → PARTNER. Institutional-grade custody requires HSMs, multi-party computation (MPC), insurance, and deep security expertise. Building this capability from scratch would cost $10 million or more and require 18+ months. Partners like Fireblocks and Taurus have spent years perfecting this. Integrate, don't replicate.
• Blockchain node connectivity → PARTNER. Running blockchain nodes is commodity infrastructure. Use SaaS providers like Alchemy, Infura, or Taurus for multi-chain connectivity.
• Stablecoin issuance platform → BUILD. This is a differentiating capability that extends naturally from tokenization. The ability to issue, manage, and settle MiCA-compliant stablecoins on behalf of bank clients is a core product — not something to outsource.
• On-chain transaction monitoring → PARTNER. Chainalysis, Elliptic, and TRM Labs have specialized expertise and regulatory credibility. Banks and regulators expect proven tools in this space.
• DeFi protocol integration → BUILD (selectively). Start with 2-3 major protocols. This requires smart contract expertise but can be a significant value-add for institutional yield products.

The key insight is that "native" refers to the ledger and compliance layer — the parts that must work seamlessly with fiat banking. For specialized crypto infrastructure (custody, nodes, monitoring), partnerships are the pragmatic and often the superior choice.

The Swiss Lesson: White-Label Works, But Infrastructure Matters

Switzerland provides a useful case study. Sygnum, a FINMA-regulated digital asset bank, has onboarded 20+ traditional banks for white-label crypto services, enabling regulated crypto access for roughly a third of Switzerland's population. PostFinance uses Sygnum's infrastructure. SGKB uses SEBA/Amina (now rebranded).

The model works — banks clearly want to offer crypto services, and many prefer to do so through a white-label provider rather than building capabilities in-house. But there's a cautionary note: both Sygnum and Amina have been operating at a loss, with combined losses exceeding CHF 200 million over six years.

The economics suggest that being a standalone crypto infrastructure provider for banks is difficult. The more sustainable model may be embedding crypto capabilities within a core banking platform that banks already need — making crypto an add-on module rather than a standalone purchase. The marginal cost of adding crypto to an existing core banking relationship is far lower than the cost of procuring a separate crypto infrastructure stack.

The Competitive Window

The current moment is unusual. MiCA has created regulatory clarity. Institutional demand for crypto capabilities is proven. But no core banking vendor has yet delivered native crypto as a core product rather than a marketplace integration.

This window won't last. Temenos, Mambu, and Thought Machine are all investing in deepening their crypto partnerships. The first core banking platform to offer truly native crypto capabilities — where digital assets live on the same ledger as fiat, with unified compliance and seamless user experience — will have a significant first-mover advantage.

For bank technology decision-makers, the implication is straightforward: when evaluating core banking platforms, assess crypto capabilities as a core criterion, not an afterthought. Ask whether the vendor's crypto offering is native or bolted on. Understand the architecture — is it a single ledger or synchronized separate systems? Evaluate the compliance model — unified or fragmented? And consider the vendor's crypto roadmap — are they investing in native capabilities or doubling down on partnerships?

The banks that will thrive in the next decade are those whose infrastructure can handle fiat and digital assets with equal sophistication. That starts with the core banking platform.

At CoreFi, we're building the core banking platform where crypto is native, not an add-on. With existing asset tokenization capabilities, a multi-asset ledger architecture, and the modular design to integrate with best-in-class custody and blockchain providers, we're closing the competitive gap that the industry has left open.

Because in a world where digital assets are becoming mainstream financial instruments, "we'll integrate with a partner for that" is no longer a sufficient answer.

Looking for a core banking platform with native crypto capabilities?

CoreFi combines traditional core banking with native asset tokenization and digital asset support — built for EU-regulated institutions. Schedule a demo to see how native crypto changes the equation.