Treasury Secretary Scott Bessent today said he will work to ensure there is “no deposit volatility” associated with a market structure bill for digital assets currently before Congress. Bessent also said the Treasury Department is “eagerly awaiting” for the Office of Management and Budget to release the Community Development Financial Institution Fund’s 2025 allocations, but acknowledged he did not know when that would happen.
Bessent appeared before the Senate Banking Committee for the second of two days of congressional testimony, during which he fielded questions on a range of issues. Among the topics was the market structure legislation. The American Bankers Association and other organizations are asking lawmakers to use the bill to close a loophole that could allow crypto firms to bypass the Genius Act’s prohibition on paying interest or yield on payment stablecoins.
Committee member Sen. Cynthia Lummis (R-Wyo.) asked about concerns from banks that deposits could dry up if large numbers of people invest their money in crypto instead, although she didn’t specifically mention closing the loophole.
“I’ve been a champion of these small banks and deposit volatility is very undesirable,” Bessent said. “It is the stability of those deposits that allows them to lend into their communities… and we will continue to work to make sure there is no deposit volatility associated with this.”
As for the CDFI Fund, Bessent said he couldn’t provide an answer to when the 2025 funds would be released because the OMB determines the terms and timing of the appropriations.
“As soon as it is released, we will follow statutory duty and release (the funds) to CDFIs,” he said.
Bessent was also pressed on President Trump’s support for a one-year, 10% credit card rate cap. Sen. Thom Tillis (R-N.C.), who opposes the cap, asked about the effects on just one area of the financial sector – asset-backed securities – should one be put in place. Bessent said the Treasury Department is still exploring that aspect.
“I think it would depend on the length,” Bessent said. “The president has called for one year. And we would also see if (credit card issuers) were able to cut costs.”
