Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—ICBA voices concerns over digital assets framework, (Oct 9, 2025)
Organizations Mentioned:Federal Reserve Bank of Kansas City | Independent Community Bankers of America
A prohibition on stablecoin issuers paying interest on stablecoins is a necessary restriction to preserve credit availability in local communities, the organization said.
The Independent Community Bankers of America (ICBA) is urging lawmakers considering a regulatory framework for digital assets markets to ensure that any legislation prohibits the payment interest or yield to payment stablecoin holders by digital asset exchanges and affiliates. “Prohibiting crypto exchanges and affiliates from offering interest, yield, or rewards on payment stablecoins—as the GENIUS Act does for payment stablecoin issuers under its purview—will maintain the intended purpose of stablecoins for payments and help avoid a flight of FDIC-insured domestic deposits to global crypto conglomerates that do not have the same regulatory oversight or local commitment as community banks,” ICBA President and CEO Rebeca Romero Rainey said in a press release. “This is a critical guardrail needed to preserve access to credit in Main Street communities and keep funding in the real economy to sustain growth,” Rainey stressed. “America’s local communities cannot afford for Congress to change course on this critical issue and undermine a community banking system that is fundamental to our nation’s economic health.”
The ICBA press release noted warnings from the Treasury Borrowing Advisory Committee and Federal Reserve Bank of Kansas City “that digital assets pose a significant threat to the deposits that banks use to fund lending to U.S. businesses and would impair credit availability in communities across the country.” ICBA further warned “crypto exchanges [are] actively working to replace community banks,” [and that] disrupting this critical source of credit would pose significant harm to local communities.”
ICBA characterized the Genius Act’s restriction on the payment of interest and yield by payment stablecoin issuers as a first step, and “is calling on lawmakers to address payment of interest or yield by other digital asset market participants, which are the focus of the market structure legislation, to maintain Americans’ access to credit.”
Companies: Independent Community Bankers of America
LegislativeActivity: BankingOperations CommunityDevelopment FinancialStability FinTech InterestUsury