Article details stablecoins’ possible effect on community lending

With the Senate working to bring the Clarity Act digital assets bill to a vote as soon as this week, a new article explores the effects that rewards-based stablecoins could have on community bank lending.

Details: In the Business Alabama article, Alabama Bankers Association President Scott Latham says if significant local deposits move to the stablecoin environment, “the capacity for the banks to loan money out to you and me or the hardware store or the farmer or the first-time home buyer” begins to shrink.

Real-World Implications: An ICBA economic data analysis shows failing to extend the prohibition on stablecoin yield could reduce community bank lending by $850 billion due to a $1.3 trillion reduction in the industry’s deposits.

Pro-Community Bank Public Opinion: In an ICBA op-ed in the Washington Examiner last week, ICBA President and CEO Rebeca Romero Rainey said that while just 18% of Americans said they want lawmakers to prioritize crypto rules, 74% say locally based bankingis important to them.

Upcoming Vote: Ahead of the Clarity Act vote, ICBA continues encouraging community bankers to contact their senators about strengthening the bill’s prohibition on stablecoin yield.

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