$1.3 Trillion in Deposits at Risk as US Banking Sector Tensions Rise Over Stablecoin Rewards
A heated debate is unfolding in the US over stablecoins and their potential impact on community banks. The Independent Community Bankers of America (ICBA) is calling for a complete ban on rewards linked to stablecoins, citing concerns that $1.3 trillion in deposits could leave the banking system if such assets are allowed to offer yields.
The ICBA estimates that this outflow could result in an $850 billion decrease in local loans. Rebeca Romero Rainey, leader of the ICBA, has taken a firm stance against any compromise on this issue, stating that 'there is no possible compromise in terms of resolution' and that the loophole around rewards must be fully closed.
The controversy centers around the CLARITY Act, which had previously reached a compromise among crypto actors to limit remuneration linked to stablecoins to certain activities. However, community banks are pushing for a more stringent regulation, arguing that this would address their main concern and mitigate potential risks.