PRESIDENT’S MESSAGE What’s at Stake With Stablecoins for Community Banking By DEXTER SCHRODT President and CEO, NICB One of the most consequential policy debates playing out in Washington right now centers on stablecoins, and its outcome will have real implications for how community banks operate in the years ahead. I want to take a few minutes to walk you through where things stand, what the data tells us and what we can do about it. The GENIUS Act, signed into law last July, was a meaningful first step. It requires stablecoin issuers to maintain one-to-one reserves and prohibits them from paying interest or yield to holders, a recognition that stablecoins should function as payment tools, not as substitutes for bank deposits. Those provisions reflected a principle we have long advocated for: The rules of the road should be the same for everyone competing for the same customers. However, gaps remain. While issuers themselves are barred from offering interest, affiliated exchanges and digital platforms have introduced “rewards” and yield programs tied to stablecoin holdings that function much like interest-bearing accounts. What Congress prohibited directly is now happening indirectly through intermediaries. The scale of this trend deserves our attention. The stablecoin market grew 49% in 2025, reaching over $312 billion, and the U.S. Treasury estimates stablecoins could displace up to $6.6 trillion in deposits if yield incentives continue to expand. ICBA’s analysis suggests that allowing crypto intermediaries to pay interest on payment stablecoins could reduce community bank lending by $850 billion due to a $1.3 trillion reduction in industry deposits. A recent study of 92 community banks found that nine out of 10 already have customers transacting with platforms like Coinbase, and for every dollar that came back, $2.77 left. These are not abstract projections. They reflect the movement of real dollars out of our communities. 4 NEBRASKA INDEPENDENT BANKER
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