A market structure bill for digital assets threatens to weaken the financial ecosystem supporting Hispanic-owned businesses by spurring the migration of deposits from federally insured financial institutions to cryptocurrency platforms that don’t offer lending, the U.S. Hispanic Chamber of Commerce said in a letter to Senate leaders.
The Clarity Act would create a regulatory framework for crypto and other digital assets. The American Bankers Association and others have urged the Senate to use the bill to close a legal loophole that would allow digital asset service providers to pay interest or yield on payment stablecoins.
In its letter, the USHCC noted that Hispanic-owned businesses are among the fastest-growing segments of the U.S. economy, “yet they continue to face significant barriers in accessing affordable credit and capital.” Community banks remain a vital source of funding for these businesses, particularly those opening in low- to moderate-income communities.
The Clarity Act threatens the financial institutions on which Hispanic-owned businesses rely, the chamber said.
“As consumers and businesses move funds into digital asset products, community banks may lose the stable deposits they rely upon to support local lending,” USHCC said. “Economic research has found that significant deposit migration into stablecoins and related digital asset products could materially reduce the availability of credit for small businesses and agricultural borrowers. Community banks currently support a substantial share of small business lending in America, making them particularly vulnerable to widespread deposit outflows.”
The chamber urged senators to add provisions to the Clarity Act to mitigate the risk of deposit migration from community banks, and to protect the capacity of those institutions to serve minority-owned businesses and underserved communities.
