Should banks build their own blockchain infrastructure?
Table of contents:
Key takeaways:
- Full internal development offers maximum control alongside the highest operating commitment;
- Integrated infrastructure can reduce development burden and accelerate multi-chain deployment;
- External providers introduce dependencies that require due diligence, resilience planning and viable exit routes;
- A hybrid architecture allows banks to retain strategic control while drawing on specialist blockchain engineering where ownership adds little competitive value.
Complete internal ownership offers little advantage compared with a carefully designed hybrid model.
Banks gain the greatest strategic value from controlling customer relationships, governance, risk policy, proprietary data and the commercial systems through which digital-asset products reach clients.
Specialist functions such as blockchain connectivity, wallet technology, transaction orchestration and network operations can often be integrated from external providers.
Building internally makes more sense when blockchain technology forms part of the bank’s competitive advantage. Perhaps when transaction volumes justify permanent specialist teams, or when institutional requirements demand unusually deep technical control.
The decision ultimately concerns where ownership creates economic and strategic value.
Lyubomyr Pavlyk is Strategic Web3 Partnerships Executive at Coinspaid, where he works across technology partnerships and business growth in Web3. He has more than 12 years of experience in senior management and business development across insurance and fintech, alongside experience funding, building and advising technology ventures spanning blockchain, cybersecurity, AI and data. More about Lyubomyr
Why banks need blockchain infrastructure in the first place
Digital money is entering payments, deposits, settlement, custody and capital markets.
The Bank for International Settlements has spent several years examining tokenised commercial bank money, programmable settlement and tokenised securities. Its Project Agorá recently demonstrated atomic cross-border settlement using tokenised central bank reserves and commercial bank deposits, with more than 40 regulated financial institutions participating in the project. Further testing with real-value transactions is planned.
Swift is travelling a similar path. In July 2026, it announced that 17 banks across six continents were preparing to pilot live transactions through its blockchain-based ledger, using tokenised deposits to support continuous cross-border payment availability.
These initiatives bring several capabilities into the banking technology estate:
- Stablecoin and tokenised-deposit payments;
- Cross-border settlement;
- Digital-asset products;
- Tokenised securities;
- 24/7 payment operations;
- Programmable transactions and conditional settlement.
A bank can build the technology required to interact with blockchains itself, integrate specialist software, or divide ownership between internal and external systems.
What does blockchain infrastructure for a bank include?
Blockchain infrastructure for a bank is the technology connecting banking systems, controls and applications with blockchain networks and digital assets.
A production environment can encompass:
- Blockchain connectivity to read and submit transactions across supported networks;
- Wallet and key management governing addresses, signing and asset access;
- Transaction orchestration covering fees, routing, retries and status management;
- Confirmation monitoring to determine when transactions satisfy internal settlement rules;
- Compliance systems including KYT, sanctions screening and risk scoring;
- Liquidity and conversion systems linking digital assets with treasury operations;
- Reporting and reconciliation translating blockchain activity into financial records;
- APIs, webhooks and observability connecting blockchain operations with the bank’s technology estate.
While a blockchain records transactions, banking-grade infrastructure makes that activity usable across treasury, compliance, finance, risk and customer-facing applications.
What does building blockchain infrastructure in-house mean?
A bank owning its blockchain infrastructure becomes responsible for node and API availability, transaction signing, network upgrades, forks, new asset integrations, key security, monitoring, incident response and reconciliation. Each additional blockchain introduces its own behaviour, fee mechanics, confirmation characteristics and software changes.
Security creates another permanent obligation. Private-key systems deserve especially rigorous controls because a signing failure carries different consequences from an ordinary application error.
Ultimately, building blockchain infrastructure creates a permanent operating responsibility.
When should banks build blockchain infrastructure in-house?
Building deserves serious consideration when:
- Blockchain engineering forms part of the bank’s competitive advantage;
- Transaction volumes are high enough to support dedicated teams economically;
- Regulatory, security or internal policy requires direct control of specific components;
- The bank already maintains specialist blockchain and cryptographic-security capabilities;
- External systems cannot accommodate the institution’s technical requirements;
- A long-term digital-asset strategy depends on proprietary architecture.
Large institutions developing tokenised deposits, institutional settlement systems or highly differentiated custody technology may place considerably greater value on internal engineering than a regional bank adding stablecoin payments for corporate clients.
In short, control has economic value when the bank can use it.
Case study: J.P. Morgan builds
J.P. Morgan has been building blockchain technology through what is now Kinexys since 2015, creating its own permissioned network for institutional payments rather than treating blockchain connectivity as an isolated technology function.
Kinexys Digital Payments operates as both a blockchain-based deposit ledger and payment network, allowing clients to move funds across borders around the clock and automate transactions through programmable payments. By April 2025, J.P. Morgan reported more than $1.5 trillion in cumulative transaction volume across Kinexys products and average daily volumes above $2 billion.
J.P. Morgan has the client base, transaction volumes and engineering resources to turn proprietary blockchain infrastructure into a commercial banking capability – circumstances in which building can create strategic value.
When does ready-made blockchain infrastructure make more sense?
Customers rarely choose a bank because its engineers operate nodes particularly well. Yet failures in node connectivity, fee estimation, transaction broadcasting or confirmation monitoring can interrupt an entire digital-asset product.
External infrastructure can therefore make sense when a bank wants:
- Faster implementation;
- Access to specialist blockchain engineering;
- Support for several networks;
- Continuous maintenance and network updates;
- Lower initial capital expenditure;
- An opportunity to test demand before committing substantial internal resources.
A provider can distribute engineering costs across multiple clients, while an internal team gives the institution greater authority over architecture and development priorities.
Neither advantage automatically outweighs the other.
Build vs buy vs hybrid blockchain infrastructure
| Decision Factor | Build In‑House | Integrate Infrastructure | Hybrid |
|---|---|---|---|
| Time to market | Usually longest | Usually shortest | Moderate |
| Upfront investment | High | Lower | Moderate |
| Ongoing maintenance | Primarily internal | Primarily provider‑led | Shared |
| Control | Highest | Depends on architecture | High over selected systems |
| Security responsibility | Primarily internal | Shared with provider | Divided by component |
| Multi‑chain expansion | Requires additional engineering | Usually easier | Selective |
| Compliance integration | Highly customisable | Depends on APIs | Custom policy with integrated tools |
| Vendor dependency | Low | Highest | Reduced through modular design |
| Internal expertise required | Extensive | Lower | Targeted |
| Best suited for | Strategically differentiated technology | Faster deployment and standard capabilities | Banks balancing control with specialisation |
Why the hybrid model often works for banks
Banks already operate through a mixture of proprietary systems, specialised software and external technology.
- Keep control where value is proprietary: customer relationships, bank governance, risk policy, commercial rules, proprietary data and customer-facing products.
- Integrate where specialisation carries greater value: blockchain connectivity, node operations, wallet technology, transaction orchestration, monitoring and network-specific maintenance.
The resulting principle can be compacted: Own differentiation. Integrate specialist complexity.
A bank can, for example, retain control of private keys, transaction permissions and risk rules while consuming connectivity and transaction-management software externally. Buying technology therefore does not necessarily mean surrendering custody or institutional authority.
Case study: Deutsche Bank’s external settlement network
Rather than constructing an entirely proprietary blockchain settlement network, Deutsche Bank invested in Partior, a blockchain-based settlement platform backed by several major financial institutions, and integrated the network into its cross-border payments business.
In September 2025, Deutsche Bank completed its first euro-denominated cross-border payment through Partior in a transaction with DBS. Deutsche Bank acted as the settlement bank while DBS acted as beneficiary bank. The two institutions also connected the blockchain network with existing financial systems, allowing the payment to operate across blockchain and conventional banking environments.
What are the risks of using external blockchain infrastructure?
External technology transfers certain engineering responsibilities while introducing dependencies of its own.
Banks should examine provider concentration, service availability, cyber security, data handling, integration dependence, contractual service levels and the ability to migrate away from a supplier.
Regulators already approach third-party technology through this framework. The Basel Committee’s current third-party risk principles, published in December 2025, address banks’ increasing dependence on external service providers and establish a common baseline for governance and risk management.
According to the principles, banks should perform due diligence on critical providers, assess their resilience, maintain contingency arrangements and develop viable exit strategies.
A sound architecture therefore anticipates provider failure before procurement begins. Mitigation can include modular integrations, portable data, provider redundancy, institution-controlled keys where appropriate and well-tested migration procedures.
Outsourcing technology never outsources the bank’s responsibility for managing its risk.
How should banks evaluate a blockchain infrastructure provider?
Banks should, first and foremost, establish:
- Who controls private keys and transaction signing;
- Which networks and assets are supported;
- How APIs, webhooks and reporting systems integrate with existing technology;
- How failures, blockchain reorganisations and network upgrades are handled;
- What monitoring and audit information the bank receives;
- How access rights and approvals are governed;
- What resilience, redundancy and recovery mechanisms exist;
- Where data is stored and processed.
Additionally, a technically impressive integration can become expensive when the provider owns too much of the surrounding architecture. Portability, therefore, deserves consideration at the design stage, rather than during an outage or contract dispute.
What different blockchain infrastructure models look like in practice
Coinspaid offers several ways institutions can consume blockchain software.
- Infrastructure-oriented model for businesses building digital-asset services including wallets, custody and payments. Its current architecture allows institutions to retain control over keys, assets and transaction signing while using underlying systems for blockchain operations and transaction management.This model suits an institution seeking substantial authority over its product and asset-management architecture while avoiding the burden of engineering every blockchain connection itself.
- Ready-to-launch infrastructure to run a blockchain payment business. It packages digital-asset payment and exchange software with merchant management, settlement, reconciliation, liquidity, compliance and transaction-monitoring capabilities.
Coinspaid lets the client take the build-versus-buy decision. One institution may want technical foundations on which its engineers construct a proprietary service. Another may place greater value on implementing a more complete software environment with fewer underlying components to manage.
Build, buy or hybrid? Five questions banks should ask
A bank can reduce a complex architecture decision to five questions:
- Is this capability a source of competitive differentiation? Strategic technology deserves stronger consideration for internal ownership.
- Can we operate it continuously? Development capability and production capability are different organisational assets.
- What is the five-year cost of ownership? Include engineering, security, upgrades, compliance integration, monitoring and incident response.
- What control does regulation or institutional policy actually require? Separate mandatory control from control acquired by preference.
- How quickly does the business need to launch? A two-year engineering programme carries an opportunity cost when competitors can enter sooner.
Build where ownership creates durable advantage or essential control; integrate where specialised technology can be sourced efficiently; combine both where the institution needs each.
Final takeaway on enterprise blockchain infrastructure
The strongest blockchain strategy for most banks begins by deciding what deserves to be owned.
Customer relationships, governance, proprietary product design and institutional risk controls often justify internal authority. Blockchain connectivity, network maintenance and other specialist technical functions can frequently be sourced more efficiently from companies whose engineering teams operate them continuously.
Current banking experiments reinforce the importance of making this architectural choice well. BIS Project Agorá is progressing toward real-value testing, while Swift is preparing tokenised-deposit pilots with 17 banks. Digital assets are becoming an increasingly serious component of banking technology.
FAQ – bank blockchain infrastructure
Banks often gain the most value from retaining customer relationships, governance, internal risk policy, proprietary data, commercial rules and strategically important product systems. Private-key control may also remain internal where custody architecture or institutional policy requires it. The correct boundary depends on the bank’s regulatory obligations, security model and digital-asset strategy.
Specialist blockchain connectivity, node operations, transaction broadcasting, wallet technology, confirmation monitoring, network maintenance and compliance tooling can all be accessed through external software. The strongest candidates are technically demanding capabilities that require continuous maintenance while providing limited differentiation to the bank’s customers.
Yes. Infrastructure can be designed so that an external system provides blockchain connectivity or transaction-management capabilities while the institution retains control over keys and signing. Coinspaid Core, for example, is currently presented as giving customers control over keys, assets and transaction signing.
Key risks include operational outages, cyber incidents, vendor concentration, data exposure, integration dependence and difficult provider migration. Basel guidance places responsibility on banks to understand third-party dependencies, conduct due diligence, prepare contingency arrangements and maintain workable exit strategies where external services support critical operations.
Blockchain infrastructure provides underlying technical functions such as network connectivity, wallet operations, transaction management and monitoring. A ready-made payment platform packages more of these components into software designed around commercial functions such as payments, payouts, settlement, reporting and administration. The former gives banks greater architectural freedom; the latter can reduce implementation work.
