In this episode of The Crypto Exchange, co-host Genna Garver talks with John D’Agostino of Coinbase Institutional and Chris Kennedy of Regions Bank. They discuss their working paper, “Banks May Preserve the Deposit – but Lose the Depositor,” which is aimed at community and regional bank boards.

Their core argument is that crypto is not what is draining community bank deposits. The bigger risk is losing the next generation of clients, such as digital-native startups, to fintechs and G-SIBs that offer modern payment rails. Both guests say a cautious approach is understandable because stablecoin and tokenized rails are still small compared with legacy systems. They also warn that waiting too long could leave banks behind.

Their advice is to “buy the rails, build the intelligence, own the relationship.” In practice, that means using vendors to connect to multiple networks rather than building custom systems, and avoiding direct digital asset custody. Banks should instead focus on client insight and local trust. Both suggest that boards ask where their future clients will come from.

Transcript: Banking in a Multirail Era: Strategies for Preserving the Customer Relationship (PDF)