US Community Banks Are Shrinking—Crypto Could Be the Cure, Says Digital Chamber

U.S. community banks face extinction-level risk as they ignore crypto rails and real-time payment tech, warns top digital asset advocate.

Crypto Offers Lifeline as US Community Banks Continue to Shrink

Cody Carbone, newly appointed chief executive officer of the Digital Chamber, voiced concern Wednesday on social media platform X about the accelerating decline of community banks in the United States.

The Digital Chamber chief highlighted a decades-long contraction in the number of banks, pointing to what he sees as a missed opportunity for innovation in the sector. He posted: “Sad. U.S. community banks have been swallowed as the number of U.S. banks has fallen from ~10,000 in the mid‑’90s to just 4,046 today.” The executive added:

Community banks could’ve carved out a moat by innovating and launching real‑time payments, crypto custody & stablecoin rails, etc. as big banks moved slowly. Instead, many will end up merger fodder.

His remarks reflect a broader frustration within the digital asset community regarding the lack of technological agility among smaller financial institutions.

Carbone was appointed CEO of the Digital Chamber in March 2025, succeeding founder Perianne Boring, who now serves as board chair. As the leading U.S. trade association for blockchain and digital assets, the Digital Chamber, under Carbone’s leadership, is prioritizing legislation focused on stablecoins and market structure, aiming to establish clear regulatory frameworks that foster resilience and sustainable growth in the industry.

By failing to adopt transformative technologies, Carbone warned, many community banks have positioned themselves for absorption by larger institutions. While banking giants gradually modernize their offerings, smaller players without robust digital strategies find themselves unable to compete. Advocates for decentralized finance (DeFi) argue that a pivot toward crypto integration and blockchain-enabled services still offers a potential path forward for these institutions—if they act quickly. Such a move could not only stave off mergers but also reestablish community banks as innovators in an evolving financial landscape.