Cryptocurrency's explosive growth in specific regions is not only disrupting traditional financial order but also pushing banking systems in various countries into a triple dilemma—soaring compliance costs, fluctuating regulatory policies, and surging security threats.

In plain terms, banks are now caught in the middle, feeling the most pressure. On one side, they must cope with the intense pressure of international sanctions; on the other, they have to deal with the unpredictable shifts in local policies.

**The Tightening Noose of Compliance**

At the international level, global financial regulators are tracking virtual assets with alarming precision. The transparency of blockchain makes major VASPs (Virtual Asset Service Providers) key targets, and any misstep can lead to secondary sanctions and hefty fines—just look at Binance’s $4.3 billion settlement to see how costly it can be. This forces banks to upgrade KYC/AML procedures, conduct real-time screening, and track cross-border remittances. These measures can eat up 15%-20% of operational costs, squeezing profit margins significantly.

Local situations are even worse. Policies swing frequently between "ban" and "permit," sometimes tightening restrictions on fiat-crypto exchanges, other times loosening them. Banks are utterly confused about what constitutes compliance—this uncertainty itself is a risk. Plus, underground gray markets are emerging constantly (fake identities, illegal agents, etc.), making it as difficult as finding a needle in a haystack to distinguish legitimate transactions from money laundering.

**Security Defenses Are Crumbling**

The popularity of crypto has attracted all kinds of threats. Banks and exchanges have become prime targets for hackers. Cyberattack techniques are becoming more sophisticated—from simple phishing to targeted APTs (Advanced Persistent Threats)—and defending against them is becoming increasingly costly. These attacks are not just about stealing money; many aim to undermine confidence in the financial system.

The system’s own vulnerabilities are also exposed. Traditional banking IT infrastructure was designed for conventional finance, and suddenly integrating high-frequency crypto trading and smart contract verification puts enormous pressure on systems. Once vulnerabilities appear, the consequences can be catastrophic.

**Rebuilding or Exiting?**

Banks have no choice but to evolve rapidly in this financial revolution. Increasing technological investments, updating risk control models, and adapting to new regulatory frameworks all require huge capital and strategic foresight from management. Otherwise, they risk being gradually eroded by emerging fintech firms and decentralized platforms. This is not alarmist talk but the reality that is already unfolding.