Kevin Paintner, chairman of the Independent Community Bankers of America’s Digital Assets Subcommittee, said on Jan. 14 that lawmakers should extend prohibitions on yield-bearing payment stablecoins to include crypto exchanges, affiliates, and other intermediaries. Paintner made the statement in an opinion column published by CoinDesk as Congress continues to debate digital asset market structure legislation following the GENIUS Act’s initial restrictions on stablecoin yield.
The issue is significant for community banks and local economies. Community banks hold $4.8 trillion in deposits supporting $4 trillion in total lending activity, according to industry data. These institutions provide more than double the small-business loan share compared with regional and large banks and account for 81 percent of farm real estate debt held by commercial banks. Small businesses rely heavily on relationship lending from these local institutions for credit access, according to the Independent Community Bankers of America.
Paintner said, “Continuing to allow crypto intermediaries to pay interest or yield on payment stablecoin holdings could reduce community bank lending by 850 billion dollars due to a 1.3 trillion dollar reduction in the industry’s deposits. America’s Main Streets will pay the price if money is siphoned out of their communities to be held in reserves backing yield-bearing payment stablecoins.” According to Paintner’s column published by CoinDesk, he also said, “The GENIUS Act took the first step in addressing the risks posed by yield-bearing payment stablecoins by prohibiting payment stablecoin issuers from offering yield, interest, or other considerations to payment stablecoin holders. Now, lawmakers must protect communities across America by extending this prohibition to crypto exchanges, affiliates, and other intermediaries.”
Small businesses create more than half of new jobs nationwide and employ nearly 73 percent of private-sector workers according to government reports. Community banks maintain the only physical banking presence in one in five U.S. counties and hold nearly two-thirds of rural deposits while representing 71 percent of all bank branches in rural areas. Their lending activity directly supports local economic resilience according to industry data.
The stablecoin market capitalization stands at approximately $316 billion with annual transaction volumes exceeding $33 trillion according to market trackers. Treasury estimates project that the sector could reach trillions of dollars by decade’s end. The GENIUS Act established an initial federal framework for payment stablecoins and prohibited direct yield payments by issuers while leaving intermediary arrangements subject to further legislative review according to market data.
Paintner serves as regional president for Wyoming at American National Bank and chairs the Digital Assets Subcommittee of the Independent Community Bankers of America. He brings nearly 30 years of experience in business, consumer, and agricultural lending supporting local economic development through community banking.
