New national research shows a gap between awareness and practical application, with strong demand for guidance and tools

WASHINGTON, D.C. – Prosperity Now, in collaboration with Blockchain Foundation and Intersect Public Affairs, today released new national research examining how local and small financial institutions, such as Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs), are assessing digital assets.

The report, Digital Assets and Community-Based Financial Institutions: Opportunities, Constraints, and Readiness, is supported by the W.K. Kellogg Foundation and draws on a national survey of 150 organizations as well as focus groups with practitioners and subject matter experts. It provides a field-informed view of how CDFIs, MDIs, and other local lenders are evaluating this evolving area.

Building on the initial research focus on consumer demand, operational considerations, and institutional readiness, the findings provide a clearer picture of how these dynamics are taking shape across the field.

The findings point to a clear pattern: while demand and awareness are growing, most institutions remain in an early stage of assessment as they evaluate risk, operational fit, regulatory expectations, and feasibility.

“Our research makes clear that CDFIs, MDIs, and other local lenders want to be a trusted, knowledgeable resource for their clients on digital asset tools,” said Marisa Calderon, President and CEO of Prosperity Now. “But wanting to help and being able to help are two different things. Institutions are navigating a complex environment that includes risk considerations, operational constraints, and evolving regulatory expectations.”

What we see in this research is strong interest paired with real questions about how these tools fit within existing models. Institutions want clearer guidance, practical resources, and a better understanding of what responsible engagement looks like in practice.”

“Since our 2024 report, Blockchain Foundation has advocated for regulatory clarity for CDFIs and MDIs. We are thrilled to partner to build on that initial research to deepen understanding and we are encouraged by the survey results that highlight the work still to be done to ensure that small financial institutions are not be left out of the future of digital finance,” said Cleve Mesidor, Executive Director of Blockchain Foundation.

The findings also reflect how institutions are prioritizing risk management and consumer protection as they evaluate new technologies.

“This research underscores that while interest in decentralized finance and digital assets is growing, community banks are rightly prioritizing risk, trust and consumer protection. At the W.K. Kellogg Foundation, we support efforts like this to ensure innovation is grounded in equity and expands opportunity for the communities these institutions serve,” said Susie Lee, Program-Related Investments Officer at the W.K. Kellogg Foundation.

Key findings:

• Awareness is widespread, but familiarity is limited. Nearly all respondents (98 percent) have heard of cryptocurrencies, yet only 28 percent report being familiar or very familiar with digital assets. Among CDFIs, that drops to 17 percent.
• Most institutions are not yet engaged operationally. More than 80 percent of respondents have not explored digital assets in their programs or operations. Among CDFIs, that figure rises to 89 percent, and 86 percent report no internal discussion or exploration of digital assets. These responses reflect an environment shaped by risk considerations, limited familiarity, and evolving regulatory expectations.
• Interest is focused on internal operations, not new products. When institutions do consider use cases, they point to functions such as payroll, procurement, supply chain management, and identity verification.
• Risk considerations and operational constraints shape decision-making. Concerns about fraud, cybersecurity, volatility, and regulatory uncertainty consistently rank highest across respondents.
• There is strong demand for practical guidance. More than 70 percent of respondents want accessible resources on risk protections, consumer safeguards, and regulatory considerations, with a preference for webinars, short videos, and toolkits.

The findings reflect a sector that is actively tracking developments in digital finance while remaining in an early stage of assessment.

They also highlight a gap between awareness and practical application. For many institutions, the next step is not immediate adoption, but access to guidance, tools, and examples that help them evaluate relevance, manage risk, and determine appropriate next steps within their operating environment.

The findings also point to a need for continued research, practical guidance, and tools that help institutions better understand and assess these technologies in a real-world context.

As digital finance continues to evolve, this research establishes a baseline for understanding how local financial institutions are approaching digital assets and what factors are shaping their decision-making today.

Read the full report here.