Xapo Bank Director Warns of Challenges for Banks Entering Digital Custody

In accordance with Bijié Wǎng, Joey Garcia, director of Xapo Bank, warned at the ZebuLive conference in London that traditional banks face significant operational and regulatory challenges when entering the digital asset custody space. He noted a $12 billion funding gap in traditional custody systems due to the lack of spot ETFs, forcing reliance on intermediaries. Garcia highlighted Xapo's advantage in transitioning from a Bitcoin custodian to a licensed bank, while traditional institutions attempting reverse integration face greater resistance. He predicted that despite the complexity, banks will shift toward third-party providers and integrated service models.