The banks would NOT have to temporarily convert currency into bitcoin.  I could see them sending blocks of fed notes (1,000,000's  100,000's  10,000's) with marked satoshi's/colored coins.  Of course they would still have to pay transaction fees with bitcoins.  I believe it would still be bullish from Bitcoin being acknowledged.  It just would be a way more subdued trip to the moon since they would not need a billion dollars of bitcoin to transfer billion dollars of fed notes just a few marked satoshi's.