With the once impenetrable wall between Canadian banks and crypto quickly eroding, a publicly owned Alberta bank has big plans to expand its already sizable crypto business.

ATB Financial, which is owned by the Province of Alberta, has spent years quietly building a reputation as the go-to bank for Canada’s crypto industry, providing financial services to crypto platforms, miners and custodians that other Canadian banks deemed too risky to accept as clients. With Canada’s financial regulators signalling a new willingness to let banks experiment with crypto, ATB hopes to expand into even more services, such as bitcoin-backed lending, holding reserves for crypto assets pegged to the dollar and digital asset investment advice.

Brian Ford, vice-president of business solutions at ATB, predicted “cryptocurrency will be a key part of banking” in three to five years—including among Canada’s Big Five banks, which have so far barely engaged with the sector. When that happens, ATB hopes to use the goodwill it’s built up to maintain its lead, he said: “Our clients are quite dedicated to us, because we’ve been there from the beginning to support the industry.”

Crypto banking may seem like an oxymoron. A major goal of pseudonymous Bitcoin founder Satoshi Nakamoto, as laid out in the seminal Bitcoin white paper, was to make it possible for people to make digital transactions directly rather than relying on a third party like a bank to facilitate payments.

But for now, the overwhelming majority of Canadians deposit their paycheques into bank accounts, which means they need to move money from those accounts to buy crypto. Crypto companies also need bank accounts to pay their employees and fund their operations. Ford said ATB started providing basic business banking services for crypto companies in Canada six-and-a-half years ago, when no other bank would.

Other financial institutions have plenty of reasons to be wary. Crypto platforms have a long history of going up in flames amid allegations of fraud and money-laundering failures, and crypto assets are notoriously prone to wild price fluctuations.

“Up until this year, the conventional wisdom was the correct one, which is that you want to keep that volatility away from banks,” said Hilary Allen, a law professor at American University in Washington, D.C., who researches new financial technologies. Banks “have a lot of government subsidies and support, and you don’t want to put that behind what is essentially speculative gambling.”

Today, conventional wisdom has taken a wild swing in the other direction. The U.S. is taking a much friendlier approach to crypto regulation under President Donald Trump, whose family has deep ties to the industry and whose campaign was fuelled by crypto donations.

In July, the U.S. passed the GENIUS Act, which could pave the way for companies from Walmart to big banks to issue their own stablecoins, or crypto assets pegged to the value of the dollar. Canada is responding by developing federal stablecoin legislation, while its top banking watchdog recently said he won’t stop banks from experimenting with the technology.

Ford said the crypto industry has matured a lot in recent years. ATB only works with regulated firms and uses blockchain analysis tools to verify their customers actually have the assets they say they have. The bank turns a lot of business away that doesn’t meet its high standards, he said. “We say no a lot more than we ever say yes,” he added.

ATB nonetheless sees a major opportunity in stablecoins, Ford said. Under the U.S. GENIUS Act, stablecoins must be backed by high-quality liquid reserves, such as cash in bank deposits or short-term Treasury bills.

ATB already holds the reserves for a Canadian dollar stablecoin called CADC and plans to hold the reserves for a new stablecoin being issued by Calgary’s crypto trust company Tetra Trust, which it backs along with National Bank and a consortium of other big names in Canadian fintech.

“Stablecoins will probably be a big part of where the payments industry goes in the future,” Ford said. “We want to participate in that and be a leader.”

Stablecoins and banks linked to crypto have had some high-profile failures, and Alberta taxpayers would ultimately be on the hook in that worst-case scenario at ATB, said Robert Ascah, a research fellow at the Parkland Institute, an Alberta think tank. The bank is both owned and regulated by the province, which he said creates “a huge range of conflicts of interest.”

Ascah, who has also worked for both ATB Financial and Alberta Treasury, which oversees ATB, said crypto would have to account for a much larger portion of ATB’s business before it became a significant risk. He said the risk posed by ATB’s crypto experimentation is acceptable as long as the province is keeping an eye on it.

Asked whether Alberta signed off on ATB’s crypto experimentation, Marisa Breeze, a spokesperson for Minister of Finance Nathan Horner, said the province “does not interfere in operational matters, and safeguards are in place to prevent conflicts of interest.” ATB’s oversight “supports innovation while protecting consumers and financial stability,” she said.

ATB will need to be cautious in valuing the digital assets backing its loans, Ascah warned, since they’re volatile, lack cash flows, and aren’t tied to any real-world assets. Toronto-founded Ledn is the only major crypto lender to survive the crash of 2022, and ATB would be the first Canadian bank to venture into this line of business.

Ford said the standards ATB must follow are identical to those of federally regulated banks. One way being owned by the province helps ATB is that Alberta has actively encouraged crypto businesses to set up shop there for years, he said.

“We want to make sure we’re effective and we’re safe in how we nurture crypto businesses across Canada,” he said. “We want to do it all in a—I don’t want to say risk-free way, but in a risk-managed way.”