Crypto legislation like the CLARITY Act is being rammed through Congress, but is this really a policy change that the American people are demanding? Just 18% of respondents to a recent Politico poll said they want lawmakers to prioritize establishing rules for the cryptocurrency market. It’s not a grassroots mandate or priority, and you don’t need to look far to see why this forceful legislative push exists.
In 2024, the crypto industry’s main super PAC, Fairshake, spent roughly $195 million with the stated goal of electing a pro-crypto Congress. That paid off with the GENIUS Act passing last year, opening the door for stablecoin issuers to operate inside the nation’s financial system with far less oversight than the banks they compete with. The super PAC immediately amassed another $193 million by year’s end, positioning itself to spend at the same scale all over again.
Let’s be clear: Industries across the country legally hire lobbyists and run public affairs campaigns in Washington and congressional districts everywhere. This is nothing new. But the scale for crypto is unprecedented. Crypto corporations contributed nearly half (44%) of all corporate money to the 2024 elections, and it’s not hard to understand why: Only 27% of voters said they support legitimizing crypto as a mainstream financial asset, according to the Politico poll. When you can’t win the argument with the public, you try to buy it in Washington instead.
Today, the CLARITY Act is being jammed through in Washington — a bill that would give an unfair regulatory advantage to crypto firms and stablecoin issuers. As written, the CLARITY Act would damage the financial infrastructure most Americans depend on. If Congress does not ensure a robust prohibition on yield-bearing stablecoins, macroeconomic modeling projects a $1.3 trillion loss of deposits to community banks. This translates to an $850 billion decline in local lending across the country — which may seem abstract, but it represents a 21% contraction in community bank lending capacity. That could put nearly 350,000 small employer firms at risk of losing access to credit, affecting firms that support nearly 3.4 million employees. The impacts of this legislation are real — without a full prohibition on stablecoin yield, the communities that can’t afford a seat at Washington’s table will be the ones left paying the bill.
Community banks across America represent $4.1 trillion in consumer, small-business, and agricultural loans. Nearly 60% of U.S. small-business loans under $1 million and more than 80% of banking-sector agriculture loans are made by community banks — a direct result of the local expertise and relationships that no decentralized digital asset platform can begin to replicate. Americans understand how robust local lending is inextricably linked to the economic health of their communities — 74% say banking with a bank based in their local community is important to them, and 73% say it is important that banks make lending decisions locally.
CONGRESS RUNNING INTO DANGEROUS TRAP WITH HASTY CLARITY PUSH
Now, the CLARITY Act is simply the next item on crypto donors’ shopping list. Lawmakers must weigh the competing interests of a handful of giant crypto companies against the local communities and millions of consumers seeking credit. There should be nothing complicated about this: The families, small businesses, and farms in their districts are not writing seven-figure checks to super PACs. They are, however, depending on their elected representatives to ask hard questions before supporting legislation that could quietly decimate Main Street America.
Community banks are respected and trusted partners in their local communities with reputations built on decades of regulation and nearly a century of bank-funded deposit insurance. Crypto newcomers don’t want to compete on a level playing field. To avert harm to local communities and the real economy, Congress must ensure the CLARITY Act’s stablecoin yield prohibition is robust, transparent, and effective.
Rebeca Romero Rainey is president and CEO of the Independent Community Bankers of America.