I have spent my career representing rural Alabama. I know firsthand what makes small towns thrive: strong families, hard work, and the ability to build something with the right tools and support. In districts like mine, that support often comes from our community banks.
Community banks are not just financial institutions; they are partners in growth. They help a young couple buy their first home. They make it possible for a farmer to purchase a new tractor. They offer a small business owner the loan needed to expand and hire a few more folks from the neighborhood. In rural communities, these banks are woven into the fabric of daily life, and our local economies rely on them.
But now, a dangerous loophole in the GENIUS Act threatens to pull the rug out from under these banks and by extension, the communities that depend on them.
One of the GENIUS Act’s goals is to prevent stablecoin issuers, cryptocurrency providers that offer “stable” digital tokens, from offering interest or yield to their customers. The goal was simple and sound: to ensure these companies do not act like unregulated banks and lure consumers into risky territory with promises of easy returns.
But as it stands today, a loophole in the GENIUS Act allows stablecoin issuers to offer those same financial incentives through affiliated third parties. It’s a clever workaround that completely undermines the spirit of the law. And while it might benefit crypto firms and large investors, it will come at a serious cost to small-town America.
Here’s why that matters: community banks rely on deposits from local customers to make loans. They do not have billion-dollar safety nets. They are not backed by hedge funds. They are local institutions that need your deposits to lend back to your community. If people start pulling those deposits out of their local banks to chase high yields in crypto, that pool of lending capital shrinks fast.
And when community banks cannot lend, the ripple effects are felt immediately. A family cannot get the loan to build a new home. A farmer might delay replacing outdated equipment. A local shop owner puts off expansion or worse, closes their doors. That’s how rural economies stall out.
This loophole effectively incentivizes moving money away from institutions that invest in real people and real communities and toward digital assets that do not have the same obligations or oversight. Stablecoins are not protected by the FDIC. If something goes wrong, the folks who moved their money into those products will have little to no way to get their money back.
Rural Alabama cannot afford to have its financial lifelines cut off. Community banks have weathered recessions, natural disasters, and pandemics by staying focused on local needs. They deserve a level playing field, not a policy that favors speculative technology over stable, proven financial institutions.
Our leaders in Congress, especially Senator Katie Britt and her colleagues on the Senate Banking Committee, should work to close this loophole. Enforce the GENIUS Act as it was written and intended. Make sure crypto firms cannot offer yield and ensure our community banks remain strong.
Our rural communities are resilient, but we should not be forced to compete with unregulated markets that play by different rules. Let us stand up for what works and protect the institutions that have always stood by us.
