( ENSPIRE Perspective ) Op-Ed by Jermaine Huell, Vice President of 100 Black Men of NY
I have the privilege of working alongside leaders who are committed to leveraging the collective talent, abilities, and energy of our network to achieve meaningful gains for the Black community. Our mission is rooted in action. We mentor our youth, promote wealth-building strategies, and raise awareness of the health disparities that continue to affect our neighborhoods.
We are also focused on the economic development and well-being of Black families and small businesses. That’s why I feel compelled to speak out about a loophole in the GENIUS Act, which prohibits stablecoin issuers from paying reward-like incentives to their stablecoin holders, that would allow crytpo platforms to pay yield to stablecoin holders.
What does this have to do with you?
At first glance, earning yield on digital assets may sound like harmless innovation; however, beneath the surface lies a serious threat to our community banks—the very institutions that anchor economic stability to Black businesses and families.
Community banks play an outsized role in underserved communities. They provide small business loans to local entrepreneurs and finance first-time homebuyers. Banks support churches, nonprofits, and neighborhood developers. They are often the only financial institutions willing to invest in communities that have historically been redlined or overlooked.
If crypto platforms are permitted to offer yield on stablecoins, deposits will inevitably flow out of traditional banks and into digital wallets promising higher returns. Large national banks may be able to absorb that shock. Community banks cannot. In New York alone, we’d be looking at between $7.8 billion and $15.6 billion in deposits leaving our banks.
When deposits leave community banks, lending capacity shrinks. And when lending shrinks, opportunity shrinks with it. The barber seeking to expand to a second location, the caterer needing capital to purchase new equipment, the family hoping to buy their first home—these aspirations depend on local banks having the liquidity to say yes.
There is another layer of harm that cannot be ignored. The Community Reinvestment Act (CRA) was designed to require banks to meet the credit needs of the communities they serve, including low- and moderate-income neighborhoods. It has been one of the few policy tools that compels investment in historically marginalized areas. But stablecoin platforms operating outside the traditional banking framework are not subject to the same obligations. Allowing them to siphon deposits away from regulated institutions undermines the very intent of the CRA.
For the Black community, the consequences would be profound. We are already navigating a persistent racial wealth gap, limited access to affordable capital, and systemic barriers to economic mobility. Weakening community banks would only exacerbate these disparities. Innovation should not come at the cost of equity.
Closing the yield loophole in the GENIUS Act is not about resisting innovation. It is about ensuring that financial modernization does not destabilize the very institutions that support economic progress in underserved communities. Our Senators should heed these warnings and push for legislation that will close this loophole.
We can embrace innovation while preserving accountability. We can expand financial opportunity without hollowing out community banks. And we can modernize our financial system without abandoning the communities that need stability the most.
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