Congress Should Not Leave Small Community and Minority Banks Out

December 5, 2025

Congress is developing Digital Assets Market Structure legislation through the Senate Agriculture and Banking committees to establish regulatory frameworks for cryptocurrency and blockchain technologies. The authors argue that Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs)—which serve underserved rural and urban communities—risk being excluded from the digital asset ecosystem if lawmakers don't address their needs. They advocate for including a federal study in the legislation to examine how these smaller institutions can safely offer digital asset products and services to their communities.

Who is affected

Community Development Financial Institutions (CDFIs) and their approximately 1,400 member lenders
Minority Depository Institutions (MDIs)
Underserved rural and urban communities served by these institutions
Millions of Americans who rely on smaller community financial institutions
Communities in Republican congressional districts (60% of CDFI headquarters/branches)
Large financial institutions and fintechs already experimenting with digital assets
U.S. Senate Agriculture and Banking committees

What action is being taken

Congress is actively working on Digital Assets Market Structure legislation
The U.S. Senate Agriculture and Banking committees are developing the legislation
Large institutions and fintechs are currently experimenting with tokenization, on-chain identity solutions, and blockchain-enabled lending
Banks are receiving regulatory guidance regarding decentralized finance

Why it matters

This legislation matters because it will determine whether financial innovation benefits all Americans or only well-resourced institutions, potentially creating a bifurcated financial system. CDFIs and MDIs serve communities most vulnerable to exclusion from transformative financial shifts, and without regulatory clarity, these institutions may be unable to offer digital asset services to their clients. The issue affects U.S. competitiveness, financial inclusion, and whether underserved communities gain access to potentially cost-saving technologies like blockchain-based remittances and lending. Without including these smaller institutions in policy considerations, Congress risks repeating historical patterns where innovation benefits wealthy areas first while underserved communities are left behind.

What's next

Lawmakers should include a federal study in the Digital Assets Market Structure legislation
The proposed study would examine how CDFIs and MDIs can safely and compliantly offer digital asset products
The study would explore regulatory and technical barriers preventing these institutions from adopting digital asset tools
The study would investigate ways digital assets could lower costs for remittances, small-dollar lending, and community development financing
The study would identify safeguards needed to protect market participants while enabling innovation

Read full article from source: The San Diego Voice & Viewpoint