The following is the opinion and analysis of the writer:
Omar Antelo
On any given morning in Arizona, before the sun fully rises, Latino entrepreneurs are already at work. Restaurant owners unlocking their doors. Contractors reviewing bids over coffee. Boutique owners checking inventory before customers arrive.
These businesses are not abstract statistics. They are families’ livelihoods, neighborhood anchors, and the backbone of our local economy. Behind many of them stands a community bank.
For years, I have worked alongside Hispanic business professionals and entrepreneurs through Rumbo al Éxito, the organization I founded to foster collaboration and collective growth for Latino businesses. I’ve seen firsthand how relationships with local bankers often determine whether a business survives a slow season, expands into a second location, or secures the working capital needed to make payroll.
That is why a loophole in the GENIUS Act should concern every Arizonan.
The law was designed to regulate stablecoins, which are digital tokens pegged to the U.S. dollar, and wisely included language prohibiting issuers from paying interest; however, crypto companies have found a loophole that allows them to offer “rewards” through partners and affiliates. These rewards incentivize consumers to move their money out of community banks and into digital wallets.
When deposits leave community banks, lending capacity shrinks. And when lending shrinks, small businesses feel it immediately. If this loophole isn’t closed, we could see a $110 billion decrease in loans for small businesses.
Community banks rely on local deposits to make local loans. They do not have the same access to global capital markets as megabanks. Every dollar deposited by a family or small business becomes part of the lending pool that finances a food truck, a mechanic shop, or a first-time mortgage.
Arizona is home to more than 640,000 small businesses, employing over a million people.
Latino entrepreneurs represent one of the fastest-growing segments of that community. Yet many still face structural barriers to capital, including lower average household wealth and limited access to large institutional lenders. Community banks often bridge that gap because they know their customers personally and understand the neighborhoods they serve.
There is another serious consequence: the erosion of the Community Reinvestment Act. Community banks are required under CRA to meet the credit needs of low- and moderate-income communities. Stablecoin issuers are not. If deposits migrate from regulated banks to digital platforms with no reinvestment obligations, we effectively weaken one of the most important tools for ensuring capital flows back into underserved neighborhoods.
Innovation in financial technology can be positive. Many Latino entrepreneurs embrace digital tools and new payment systems. But innovation should strengthen communities, not hollow them out. We also can’t forget that any money moved into crypto is no longer protected by the FDIC, meaning that if those platforms crash, anyone who has invested is at risk of losing it all.
The GENIUS Act’s stablecoin loophole risks doing just that by quietly redirecting billions of dollars in deposits away from institutions that lend locally and into platforms that have no obligation to reinvest in Arizona’s neighborhoods.
In the business community I serve, teamwork is everything. We succeed by supporting one another — referring clients, sharing resources, building trust. Our financial system should operate with the same principle. Deposits made in our communities should help power our communities.
Congress should close this loophole before the damage becomes visible in shuttered storefronts and stalled dreams. Because when community banks lose deposits, Arizona’s small businesses lose opportunity, and our entire economy loses momentum. I hope Senator Gallego and his colleagues on the Senate Banking Committee work to close this loophole and make sure that community banks are not at risk in any upcoming crypto legislation.
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