Alabama State Senator Keith Kelley raised alarms about the GENIUS Act, a federal stablecoin bill, expressing concern for small community banks in rural areas. In an op-ed for 1819 News, Kelley highlighted a loophole in the law that could incentivize withdrawals from local banks, thereby threatening their lending capabilities. He noted that community banks rely heavily on local deposits for funding and that losing these deposits could severely impact their ability to support local economies, especially rural farming communities where cash flow is critical. The senator criticized the potential for cryptocurrency platforms to offer financial rewards to users, suggesting that this could undermine traditional banking operations without adhering to the same regulations. In August, the Bank Policy Institute warned that the GENIUS Act might lead to significant deposit outflows from traditional banks. The implications of this act have sparked debates about regulatory clarity and competition between U.S. and foreign stablecoin issuers.

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