Alabama State Senator Warns GENIUS Act Could Harm Small Banks
The post Alabama State Senator Warns GENIUS Act Could Harm Small Banks appeared on BitcoinEthereumNews.com.
Keith Kelley, a Republican state senator representing Alabama’s 12th district, is sounding the alarm for the potential impact of the federal stablecoin bill, the GENIUS Act, two months after it was signed into law by US President Donald Trump. In a Wednesday op-ed for 1819 News, Kelley said there was a loophole in the GENIUS Act that, if exploited, could “devastate” the economies of rural areas like many in Alabama. According to the senator, the bill would allow “cryptocurrency platforms to distribute financial rewards,” incentivizing people to withdraw funds or close accounts at small community banks in the state. “Unlike large banks, community banks depend on local deposits to fund their lending,” said Kelley. “If those deposits decrease, their ability to offer loans to individuals, families, and small businesses will be significantly restricted.” He added: “For our rural farming communities in particular, where margins are thin and seasonal cash flow is critical, the loss of a trusted lending partner could be devastating.” Though signed into law on July 18, the GENIUS Act will not go into effect immediately. The law requires the US Treasury and Federal Reserve to finalize regulations related to the bill — a process the former began in August by calling for public comments focusing on detecting illicit activity. Related: Banking lobby fights to change GENIUS Act: Is it too late? Proponents of the GENIUS Act have argued that the bill will “drive innovation” to the US by establishing regulatory clarity for stablecoin issuers. Yet others have warned of issues with the law in addition to concerns about stablecoin issuers paying yields indirectly. “The foreign issuer loophole was not sufficiently fixed,” Timothy Massad, a research fellow at the Kennedy School of Government at Harvard University and former chair of the US Commodity Futures Trading Commission (CFTC), told…
Filed under: News - @ September 11, 2025 1:27 pm