Transaction-level study of crypto exchange activity at community banks finds $2.77 flowing out for every $1 returned; full report available at KlariVis.com.
KlariVis, a performance intelligence platform serving over 150 community banks, today released The Quiet Spread, an analysis of 225,577 Coinbase-related transactions across 92 community banks, revealing that the behavioral infrastructure for deposit flight to crypto platforms is already in place at the vast majority of community banking institutions nationwide.
The report arrives as Congress negotiates the CLARITY Act, which would determine whether crypto exchanges and stablecoin platforms can officially pay yield on digital asset holdings, a practice Coinbase is already conducting by characterizing payments as a “customer loyalty program” to avoid the GENIUS Act’s prohibition on interest.
90% of community banks in the study had customers actively transacting with Coinbase.
Among the 53 banks where transaction direction could be determined, $2.77 left for every $1 that came back, a net outflow of $78.3 million over 13 months.
Among money market accounts, where banks’ most yield-sensitive customers hold deposits, 96.3% of Coinbase-related transaction volume was money leaving.
If patterns hold nationally, over 3,500 of America’s 3,950 community banks have similar customer activity.
“The on-ramps are built. The behavioral pattern is established at nine out of ten community banks we examined,” said Kim Snyder, CEO and founder of KlariVis and a former community bank CFO.
“Right now, this activity tracks crypto market cycles, speculative trading, not yield-seeking. If the CLARITY Act fails to close that loophole, it would give every fintech and exchange a legal green light to compete for bank deposits without bank regulation.”
Community banks hold $4.9 trillion in deposits that fund 60% of the nation’s small business loans under $1 million and 80% of agricultural lending.
The report details how smaller banks face disproportionate exposure, and how even modest deposit losses carry a multiplied impact on the credit available to the communities these banks serve.
The full analysis, including directional flow data by account type, deposit-size breakdowns, and lending impact estimates, is available for download here.
With CLARITY Act negotiations shaping the regulatory landscape, critics warn that such patterns could push crypto yield activity into mainstream funding channels, potentially altering bank funding and lending in local communities. KlariVis notes that the on-ramps are built and the behavioral pattern is established, underscoring the need for clear policy to address deposit competition between banks and crypto platforms.
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