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Prosperity Now, Blockchain Foundation, W.K. Kellogg Foundation Launch New National Project Examining Digital Assets Risk & Readiness

WASHINGTON, D.C. — As adoption of digital assets grows among American consumers and households, Prosperity Now has launched a groundbreaking national research initiative supported by the W.K. Kellogg Foundation (WKKF) to explore how small financial institutions are navigating decentralized finance (DeFi). The first-of-its-kind project, which is being conducted in collaboration with Blockchain Foundation and Intersect Public Affairs, will assess market readiness, customer demand, and reputational risk as Community Development Financial Institutions (CDFIs), Minority Deposit Institutions (MDIs), and other local finance groups respond to increased retail demand for digital assets.

“Community lenders shouldn’t be left behind as the financial system evolves,” said Marisa Calderon, President and CEO of Prosperity Now. “This research will help clarify what questions financial institutions are asking, what support they need, and how innovation can align with business goals and customer trust.”

This pioneering project builds on Prosperity Now’s commitment to expanding financial access through practical, community-informed solutions; complements WKKF’s existing efforts with CDFIs and MDIs; and expands on Blockchain Foundation’s 2024 policy report focused on how CDFIs, MDIs, and credit unions can deliver digital assets, along with risk mitigation services, to the earliest and largest adopters of cryptocurrencies.

“As Wall Street and big banks receive federal guidance on digital assets and tokenization from regulators, it is not realistic to assume that CDFIs, MDIs and others simply want to, or should, sit on the sidelines. Further, given growing concern over crypto ATMs in local communities, these neighborhood institutions could be safer alternatives. Blockchain Foundation is thrilled to partner with the W. K. Kellogg Foundation, Prosperity Now, and Intersect on this innovative national effort to assess how Main Street financial establishments that are on the frontlines of adoption are contemplating the cryptocurrency space,” said Cleve Mesidor, Executive Director of Blockchain Foundation.

“Web3 and decentralized infrastructure present a powerful opportunity to redesign financial systems that are truly inclusive,” said Susie Z. Lee, Program Related Investment Officer at the W.K. Kellogg Foundation. “As local financial institutions explore these technologies, this research will help ensure that innovation serves the communities historically excluded from traditional capital markets.”

The institutions at the heart of this study serve working-class and younger consumers who have been early holders of digital assets but have historically lacked access to traditional financial systems. While large banks have faced volatility over the last decade, CDFIs and MDIs have remained stable and continue to be trusted by patrons. Their community-centered approach, long-standing relationships, and financial inclusion mission position them as vital players in the future of digital commerce. Yet, debates around trust, safety, and risk in Web3 and DeFi too often occur without input from the institutions closest to the communities most affected.

This initiative aims to harness necessary data and information to help bridge that gap and answer key questions. The research is being implemented across three critical dimensions:

• Customer interest and demand

• Risk assessment and institutional readiness

• Reputational and operational considerations

The project will include focus groups, a national survey, and a report to be released in fall 2025. The analysis will feature insights and recommendations to help public and private institutions and stakeholder groups better understand the potential capacity of this unique segment of the traditional banking system as it relates to the rapidly growing crypto market. Blockchain Foundation will contribute technical expertise throughout the research process and Intersect Public Affairs will support dissemination and education activities.

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