Crypto Firms Offer to Park Stablecoin Reserves at Community Banks to Break US Regulatory Deadlock

Crypto firms have proposed routing stablecoin reserves through community banks and easing rules for those banks to issue dollar‑pegged tokens in a bid to unblock a stalled US market‑structure bill. Newer proposals reported by Bloomberg include requiring issuers to hold portions of reserves at community lenders, giving community banks larger roles in minting stablecoins, and permitting easier bank access to minting — measures intended to address deposit‑flight concerns. Analysts warn stablecoins could pull significant deposits (one estimate cites up to $500bn by 2028) while digital‑dollar supply has grown roughly 40% year‑over‑year. Industry views diverge: some crypto firms oppose allowing exchanges (e.g., Coinbase) to pay rewards on stablecoin balances, a practice banks say would siphon deposits. A White House meeting between crypto and banking groups ended without agreement. Senate Banking Committee Chair Tim Scott signalled openness to compromises that permit crypto rewards provided firms don’t present themselves as banks and that consumer and community bank protections remain. The House cleared the bill last year, but Senate progress is stalled until negotiators reconcile competing versions and secure broader bipartisan support.