By Kevin Harris and Cleve Mesidor
Congress is actively working on groundbreaking legislation that would provide much needed regulatory clarity. The Digital Assets Market Structure legislation being developed by the U.S. Senate Agriculture and Banking committees can be better positioned to foster economic growth, promote financial education, and support guard rails for the early and vibrant segments of Americans who actively leverage digital assets.
In Washington, debates over crypto are too often conflated with tensions with Wall Street incumbents, entrenched regulatory turf wars, and the race for global competitiveness. As a result, a critical voice is often absent from deliberations: small financial institutions that have long been the backbone of underserved rural and urban neighborhoods. As Congress considers legislation governing digital assets, it has an opportunity to take a simple transformative, bipartisan step to ensure they are not once again left behind and left out. Lawmakers should include a federal study examining how Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) can safely and compliantly offer digital asset products. The time for this level of regulatory clarity is now!
Ensuring Access To The Future of Digital Finance
This is not a niche concern. It is a matter of financial inclusion, U.S. competitiveness, and necessity for a market structure framework that fuels innovation across rural and mainstream America.
Whether policymakers embrace or resist them, digital assets—from tokenized deposits to stablecoins to blockchain-based payment rails—are increasingly shaping the financial landscape. Large institutions and fintechs are already experimenting with tokenization, on-chain identity solutions, and blockchain-enabled lending. As these technologies become part of mainstream financial transactions, millions of Americans could be locked out if their local community institutions are not part of policy considerations.
CDFIs and MDIs serve precisely the communities most vulnerable to being excluded from transformative financial shifts. If legislation ignores their needs and capacities, we risk repeating a familiar pattern: innovation benefiting the well-resourced first, leaving everyone else to catch up later—if at all.
Including a federal study is not a radical act. It does not endorse any particular digital asset product, mandate their adoption, or loosen regulatory standards. Instead, it offers something essential: clarity!
While banks are receiving regulatory guidance regarding decentralized finance, this clarity does not extend to this unique subset of the financial system.
Data show that CDFIs support more than 1,400 smaller lenders operating in rural and urban areas that aren’t adequately served by larger banks. Of the roughly 5,900 headquarters and branches of these community lenders, 60 percent [1]are in Republican congressional districts and 55 percent are in states with two Republican senators.
A Federal Study of CDFIs & MDIs Whose Time Has Come
A well-designed federal study would explore important questions. This could include examining how digital asset services could responsibly expand financial access in underserved communities; the regulatory and technical barriers that prevent CDFIs and MDIs from piloting or adopting these tools; ways digital assets lower costs for remittances, small-dollar lending and community development financing. Additionally, federal research could offer insights into safeguards for market participants and new entrants that offer protections, while also enabling innovation. This is a smart approach as policymakers continue crafting balanced rules that reduce uncertainty for small institutions, and prevent a bifurcated financial system where only large players can innovate.
CDFIs and MDIs have been asking for guidance to better understand regulations, compliance and how to best protect their clients and institutions. Including this federal study in Senate digital assets market structure legislation will serve to ensure they won’t be left navigating this new terrain alone or disadvantaged relative to larger, better-resourced competitors.
Economic Equity Cannot Wait Any Longer
This is a unique moment in policymaking and rulemaking. If we want a financial system that works for everyone, we must ensure that the institutions closest to underserved communities are prepared—not sidelined—as digital assets evolve.
Congress has an opportunity to take a bipartisan, low-cost step toward ensuring that the next generation of financial innovation is inclusive from the start. A study supporting CDFIs and MDIs in the digital asset space is not just good policy—it is smart policymaking. It acknowledges that responsible innovation and increasing access are not competing goals but mutually reinforcing ones.
Kevin R. Harris is an entrepreneur and Former Executive Director of the Congressional Black Caucus and Cleve Mesidor is Executive Director of Blockchain Foundation.
