Senator Keith Kelley from Alabama has raised serious concerns about the potential negative effects of the new stablecoin legislation known as the GENIUS Act.
Senator's Concerns About the GENIUS Act
In an op-ed for 1819 News, Kelley argued that a loophole in the bill could “devastate” local economies, particularly in rural areas of Alabama. His warning came two months after the bill was signed into law by President Donald Trump.
Local Banks Under Threat
The senator pointed out that the bill allows cryptocurrency platforms to distribute financial incentives, encouraging account holders to withdraw funds or close accounts at small community banks. “Unlike large banks, community banks depend on local deposits to fund their lending,” Kelley explained.
Calls for Stronger Oversight
Banking groups have echoed these concerns, warning that the GENIUS Act could lead to deposit outflows as high as $6.6 trillion. “Allowing these cryptocurrency companies to function like banks, offering rewards or yield-bearing products, without requiring them to play by the same rules is not innovation,” Kelley said.
The situation surrounding the GENIUS Act remains tense, as stakeholders are calling for tighter definitions and safeguards during the drafting of final rules.
