The North Carolina Bankers Association (NCBA), along with the American Bankers Association (ABA) and other state banking associations, issued a strong call recently for regulatory action to safeguard local communities against emerging financial risks. The associations are urging North Carolina Senators Thom Tillis and Ted Budd to prioritize closing loopholes that allow stablecoin reward programs to draw essential deposits away from regulated financial institutions and into loosely regulated platforms.

Community banks, particularly those in North Carolina’s towns and rural areas, rely on local deposits to reinvest directly into their surrounding economies through small business loans, mortgages, and consumer lending. The associations warn that stablecoin reward loopholes are circumventing traditional regulations, offering incentives that divert these critical funds.

“The issue is simple: when deposits leave our community banks for loosely regulated platforms, the investment capacity for Main Street suffers,” said Peter Gwaltney, NCBA President/CEO. “Our community banks reinvest deposits right back into our neighborhoods, financing local growth and recovery. Allowing stablecoin platforms to operate with this loophole is an indirect subsidy for entities that are not as highly regulated and a direct threat to the financial stability of our towns.”

The associations highlighted that these stablecoin reward programs create an uneven playing field and pose systemic risks by moving consumer funds to platforms lacking the protections offered by chartered banks.

The request directly supports a joint advocacy effort to ensure that any regulatory framework, such as one related to the proposed GENIUS Act, addresses these gaps comprehensively. The associations recently collaborated on a formal letter detailing these concerns, underscoring the necessity of a level playing field for regulated institutions.

The joint letter from the ABA and state associations regarding these gaps can be reviewed here: https://www.aba.com/advocacy/policy-analysis/joint-aba-and-state-associations-letter-regarding-gaps-in-genius-act

The NCBA and ABA maintain that swift action is required by Congress to protect consumers, preserve the financial health of community banks, and ensure that deposits continue to fuel the growth of local economies across North Carolina.

To view a helpful FAQ about Stablecoin reference the following: https://www.aba.com/-/media/documents/reference-and-guides/07312025-stablecoin-faq.pdf?rev=d0364cbc4eee4fd2b69f54baf16d83a9

For additional details and talking points, please reference the following:
https://ncbankers.org/wp-content/uploads/2025/10/2025-Stablecoin-One-Pager-NC.pdf