The Independent Community Bankers of America (ICBA) says consumers worry that digital assets will harm community banks.
ICBA President and CEO Rebeca Romero Rainey says their polling proves that Americans “strongly support community bank views amid the ongoing debate over digital assets market structure.”
Rainey alludes to the stablecoin yield discussion, which legacy banks dislike because it may compel them to compete and raise interest payments to deposit holders. This could impact traditional banks’ bottom lines as consumers earn more for their money, leaving less for banks. Yield or interest payments for stablecoin holders are the biggest issue holding up the CLARITY Act, the crypto market infrastructure legislation that will help fuel the future of finance by improving financial services for consumers and businesses.
The ICBA survey of claims:
- 65% say it is important for policymakers debating crypto policies to ensure digital assets policy avoids harming bank lending in local communities.
- 62% say policymakers should ensure crypto policy preserves consumer access to insured deposit accounts.
- 74% say banking with a bank based in their local community is important to them.
- 74% say that when deciding where to place money and investments, it is important that the institution is part of the regulated banking system.
- 73% say it is important that banks make lending decisions locally, within the community in which they operate.
Of course, survey questions can be crafted to drive a preferred response.
Patrick Witt, the White House Executive Director of the President’s Council of Advisors for Digital Assets, took umbrage at the ICBA’s claims, declaring the lobbying group was “doing its members a huge disservice over this issue.”
Witt stated on X:
“… an outright prohibition on stablecoins rewards is dead on arrival. Were ICBA to succeed in defeating CLARITY over this issue (doubtful), their “reward” would be that GENIUS controls. Which, if ICBA’s argument is to be believed, would be catastrophic to their members. As they say: play stupid games, win stupid prizes. Instead of committing continued lobbying malpractice, ICBA should be enthusiastically supporting the compromise that Senators Tillis and Alsobrooks have reached, which addresses the issue of idle yield head-on in a way that can actually become law.”
The legacy banking sector has leveraged its lobbying skills, money, and FUD to delay approval of the CLARITY Act. This is harmful to consumers. Competition is good, and banks can issue stablecoins as well. They can also offer yield or rewards to stablecoin holders. The only thing harming community banks is the industry itself.
