The Institutional Role of Banking in 3.0

What happens to banks when finance becomes programmable, transparent, and user-owned?

In this episode of the Weekly ROAR Podcast, Dustin Hedrick and Brandon Billings explore the evolving role of financial institutions in the era of Banking 3.0. As Web3 technologies reshape the global financial system, banks are no longer just custodians of capital—they are becoming infrastructure providers within a decentralized ecosystem.

This conversation unpacks how traditional banking functions like custody, settlement, and compliance are being reimagined through blockchain, smart contracts, and real-time transparency—and why early adoption is critical for long-term relevance.

•  The shift from traditional banking to infrastructure and utility roles 
•  How custody, settlement, and compliance are evolving in a Web3 world 
•  Why early adoption and system upgrades are essential for competitive advantage 

Resources & Links:
 https://example.com/whitepaper-banking3.0

https://web3resources.com

https://regulationblockchain.com

If this episode challenged your perspective, follow the podcast, share it with someone in finance or technology, and stay connected as we explore the future of Banking 3.0.

Weekly ROAR Podcast with Dustin Hedrick & Brandon Billings
Sponsored by https://www.r0ar.io/

Transcript

SPEAKER_01 0:04

Alright, folks, we're back again for your weekly roar. And my name is Dustin. I'm here with my dear friend, closest friend, best friend in the world, and the guy who's functioning in co-CEO role in this world of crypto with me in the roar, Brandon Billings. Today we're gonna be a little bit heady. Sorry, we gotta go there. A lot of times we're talky, scripty, whatever. Today we gotta go deep in a white paper because we've got something to release, and that is the formal white paper for what the banks become in a web 3 world. So we're gonna talk about the institutional role in banking 3.0. The rise of web 3 does not signal the end of banking. As a matter of fact, it's it's something that is incredible. It signals the end of banks as they've traditionally operated. Um, and I say it's incredible because for those of you who've had any challenges with banks or the banking world or finances or whatever, if you've been through things like I've been through, this is this is needed, wanted, desired change. In a banking 3.0 world, financial institutions do not vanish. They're gonna specialize. As an asset, ownership, settlement, and trust move closer to users and code. Banks are gonna evolve from custodians of money into operators of financial infrastructure, compliance, and confidence. So, I mean, just honestly, asset ownership, settlement, trust, it's more in the hands of users and code, and it needs to be. Banks are gonna become the custodians of those, and because studies of the money, they're gonna be the operators and the compliance officers and the confidence builders. So this paper outlines the new institutional roles banks are uniquely positioned to occupy and why their participation is not optional, but essential. I know I got haters out there, Crypto Maxis. They're like, What are you talking about? Legacy banking's evil. Listen to me. We need each other in this world. And I'm saying to you, legacy banks out there, we're open for business. So come talk to us at Roar if no one else, we need you here.

SPEAKER_00 2:20

Balance sheets to infrastructure. Historically, banks have generated value by holding customer assets, intermediating transactions, uh, managing credit risk. But in banking 3.0, value increasingly shifts towards operating nodes and settlement infrastructure, providing liquidity to on-chain markets, ensuring system reliability and uptime. Banks become financial utilities, monetizing thoroughput, uh, availability, and trust guarantees rather than opacity or delay. That would be wonderful, wouldn't it? Yeah.

SPEAKER_01 3:00

That last statement's a little loaded. Two, custody becomes a service, not a requirement. Self-custody is a core promise of web three, but it's not universally practical. People are scared of it. Banks are uniquely positioned to offer institutional grade key management, multi-signature custody, recovery insurance, and compliance overlays. And in this model, custody is opt-in, transparent, and provable. It's going to align user sovereignty with institutional assurance.

SPEAKER_00 3:38

Absolutely. And as financial rules move on chain, enforcement shifts from discretion to determinism. Uh, banks evolve into smart contract validators, compliance oracles, identity and risk attestation providers. Rather than blocking access, institutions help define who can do what, under which rules, and enforced uh cryptography, or cryptographically rather, uh, and audible and in real time.

SPEAKER_01 4:11

Exactly. Number four, liquidity providers in programmable markets. This is super cool. In Web3 native finance, liquidity is fragmented, global, and automated. Banks bring deep capital reserves, risk management expertise, and market stabilization mechanisms. Trust me, we have had to do this for ourselves. And Roar, we've had to deal with deep capital reserves ourselves. We've had to build them. We've had to deal with risk management ourselves. We've had to partner with third-party platforms, partners, and solutions, as well as develop our own market stabilization mechanisms. These are challenges. They're challenges, but banks are going to bring that naturally and natively. And it's just going to be super natural for us to stabilize. By supplying liquidity to decentralized and hybrid markets, banks earn yield while reducing volatility and improving capital efficiency.

SPEAKER_00 5:11

Legacy settlement systems rely on trust, reconciliation, and delay. In banking 3.0, settlement is programmable. Finality is cryptographic. Delays are intentional and not structural. Banks that operate settlement layers or integrate smart contract rails reduce costs while increasing transparency.

SPEAKER_01 5:35

Number 5A, familiar systems are what we're going to need to upgrade for banking 3.0. We're working on it. So we see this. We see the ISO needs. We see the software needs. We see the infrastructure needs. We get it. And we're actually, we got white paper on white paper on that. But just to summate, here's familiar systems upgraded for web or for banking 3.0. Banking 3.0 does not ask institutions to abandon what works, it asks them to modernize it. And I just think about the fact that I used to walk in banks in um just maybe even less than 10 years ago and see Windows 95 on some systems. And I'm going, oh my God, I know that. That's Windows 95. God help us. It's insecure. And I remember, you know, still seeing Windows XP, and I'm going, oh my goodness. And they said, oh, but our solution only works there. We never were able to bring in the now. That's a problem. Now we've seen modernization in a lot of ways, but we need to see modernization now. It's just the same idea because there were risks associated with Windows 95 and XP that were not addressed, that are now. Same thing now. Many Web3 mechanisms are direct evolutions of legacy financial infrastructure. It's going to get you faster, better, quicker, and lighter. Lighter. So, for instance, legacy system is Swift Messages. The banking 3.0 equivalent is smart contract settlement. And why it matters? It moves banks from instruction-based trust to guaranteed execution and finality. Legacy system had central securities and depositories. Banking three-point equivalent, on-chain ledgers, why it matters, replaces reconciliation with shared immutable truth. Let me tell you something. I'm dealing with some bankers out there that are trying to replace their central securities depositories with another one just like it. And I'm going, ah, don't bring that to blockchain. Because smart contracting, it's just so much easier through on-chain ledgering or whatever to do what we do. Legacy system is custodial vaults. And banking 3.0 equivalent could be validators and key management. Why it matters? It shifts custody from ownership to verification, security, and recovery services. It's actually protective. Legacy system, internal balance sheets, banking 3.0 equivalent, tokenized assets. Why matters? It enables real-time visibility, risk assessment, and capital efficiency, let alone the fact that, well, they can't just print it when they want to or do what they want with it or fake it to make it. I'm just saying I'll say this: for every $1 you put in the bank, they spend nine of it. If that math doesn't work for you, guess what? It doesn't work for the world as well. Legacy system compliance teams banking 3.0 equivalent is regulatory code. It's functional. What if you don't have all these humans with subjective and it's just freaking code? What if you don't have in the in the asset world SEC with their guidelines or their bulletin? And I'm just picking on y'all because I'm pissed at it. You got code in a blockchain. I'm the guy who says that abuse is not knowing how to avoid punishment. That's abuse. So if you're out there and you're creating bulletins in code, the regulations that are not truth and are not North Stars, but they're just uh able to give you the ability to beat people up. That's abuse and bullying. And I'm calling you out on the spot. Legacy system compliance teams are bullies. Banking 3.0 equivalent, regulatory code, why it matters, transforms policy from after-the-fact enforcement, hello, into preventative architecture with no room for abuse on either side. That one right there is worth more than all of it. We don't need no Howie tests. We don't need no SEC bulletin. We don't need some guy who creates policy backwards and then plies it backwards, like former presidents who said we changed the IRS code so you owe money for back years. Just saying this is truth, and it's an oracle, and it becomes embedded, immutable, and stayed and constant. Abuse and bullying ends. The strategic implication is clear. Banks already understand these systems. Banking 3.0 simply makes them faster, more transparent, and globally interoperable, as well as less of a big fat bully. Institutions that recognize this early can upgrade their role without losing relevance or control. So if you're on here and um you're a crypto maxi, I know I've already ticked you off by saying legacy banking is going to make it in the future at some level. And if you're on here and you're a legacy banker, I'm sure I just pissed you off or a regulator because I just said what I said, but I mean it. So there you go. I'm happy to make everyone upset equally.

SPEAKER_00 10:32

Oh, Dustin, if only we could get inside your head and understand how you really feel.

SPEAKER_01 10:44

This is a white paper recall. I'm about to spit drink all over my computer systems here. Awesome.

SPEAKER_00 10:49

Compliance does not disappear, it evolves. Banks help encode regulatory rules into smart contracts, enable real-time supervision, reduce fraud through transparency. This model benefits regulators, institutions, and users by replacing after-the-fact enforcement with preventative architecture.

SPEAKER_01 11:10

Just saying. I'm just saying. Number seven, competitive advantage through early adoption. Banks that engage with banking 3.0 early will influence standards and protocols, shape regulatory frameworks, retain customer trust, unlock new revenue streams. I know you like that one. And those that delay, you're going to become just access point. You're risking everything that you're just going to become an ATM, uh, you know, that someone can drive through and put their money over into blockchain from your depositor. You know, I mean, just that's it. So you're gonna become an access point to systems that you won't control or have a voice in. So why not stop fighting and join us?

SPEAKER_00 11:53

Yeah. Yeah, absolutely, Dustin. You know, I was just thinking my bank uh has access points like that. You can go to a drugstore or wherever, you can make those deposits right now. Doesn't have to be a bank. Yep. Um banks are not being disintermediated, they are being redefined. In banking 3.0, the institutions that thrive will be those that consciously choose to evolve from the balance sheet-centric intermediaries to transparent programmable infrastructure providers. This transition is not theoretical, it is already underway. Banks that embrace the shift early will help define technical and regulatory standards, preserve institutional relevance and trust, unlock new revenue models tied to infrastructure, validation, and liquidity, reduce systemic risk through transparency and automation. Those that delay risk being regulated to access layers for systems they neither control nor shape. In banking 3.0, banks do not own trust, they operate it.

SPEAKER_01 13:02

Boom. I'll just say here both Brandon and I have financial backgrounds. Brandon has worked in the banking sector, he's worked with loans and with businesses. I myself have worked with financial firms both as um a person who was in the financial world as well as a technology developer and even CTO for financial firms and law firms. And so I've been in the regulatory space, CPAs, law, financial firms, my companies have supported them. We built technology infrastructure and more. We've integrated systems, we've managed mergers and migrations in the Washington, D.C. metro area with some amazing best of class businesses out there. As a matter of fact, we we even had as a client the very first um survey company in the nation who employed George Washington. That was my client. So, you guys, we've done this. We've been here, we've spent time, we've cut our teeth on it. We haven't been here for just two minutes. We've been in the blockchain space, me since around 2010, the last five years together, Braden and I, as Roar and Fierce Labs, we have a background in this. If you are out here and you're in a banking situation or you're a part of us, especially smaller regional banks, we'd love to talk with you. If you want to just talk to us, consult with us, you know, ask questions, and or offer solutions because we've built a lot in this space. And if you're out there and you don't want to touch us with a 10-foot pool pole yet, but you're thinking about what Roar might mean in the future, just follow us on X or wherever you find us. Make sure your notifications are on because we got big news coming over the next four weeks that are gonna blow your stinking mind. Because, guys, if you're in the banking sector, we're coming to your world and we're gonna change it. So welcome to the now banks, legacy bankers. We can't wait to um make your acquaintance. We're excited about, we're excited about the expertise you're gonna bring to this blockchain space and how it's gonna exit us from a wild, wild west era. Regulators that are out there, let's get some stuff done at congressional level so we have some laws that don't abuse. And then if you're out there and you are a nerd in your mama's basement, like I am in my garage, my wife lets me be here. Welcome to the now. We're coming into the now. You're not just some secretive little weirdo super coder. We're about to affect banking and people's economic realities around the world for good. So let's do this together. You guys, thanks for tuning in your weekly roar. We're so glad you're on. We'll see you next time. Take care, everybody.

SPEAKER_02 15:44

Thank you for tuning in to your weekly roar podcast. See the show notes to learn more about the topics in today's episode, and be sure to subscribe so you never miss out on the latest high impact trends and strategies shaping the future of decentralized tech.