Key Highlights
- The Blockchain Association disputed major banks’ claims that stablecoin rewards could trigger significant deposit outflows from community banks, citing FDIC data and independent research showing no clear link between stablecoin growth and community bank deposit losses.
- Community banks’ share of U.S. domestic deposits has declined for decades, falling to about 13% by 2023.
- JPMorgan Chase and Bank of America alone held 22.4% of U.S. domestic deposits, indicating that broader banking consolidation predates stablecoin adoption.
The Blockchain Association stated that warnings from large banks to Congress about stablecoins causing deposit flight from community banks lack supporting evidence.
In an X post on Monday, the group cited Federal Deposit Insurance Corporation data showing a long-term shift of deposits toward noncommunity banks and recent growth in overall U.S. bank deposits following the GENIUS Act.
Deposit concentration in FDIC data
According to FDIC figures presented by the Blockchain Association, community banks’ share of total U.S. deposits declined from 32.9 percent in 2000 to 21.1 percent in 2010 and 13.9 percent in 2020.
Noncommunity banks’ share rose from 67.1 percent to 78.9 percent and then to 86.1 percent over the same periods. In dollar terms, community bank deposits stood at $1.848 trillion in 2000, $1.996 trillion in 2010 and $2.194 trillion in 2020, while noncommunity bank deposits grew from $3.762 trillion to $7.468 trillion and $13.580 trillion.
More recent FDIC Call Report data as of March 31, 2025, and the 2023 Summary of Deposits show the entire community banking industry, comprising approximately 4,300 banks, holding 13.0 percent of U.S. domestic deposits. JPMorgan Chase and Bank of America together held 22.4 percent.
The Blockchain Association noted that noncommunity banks held at least 87 percent of U.S. domestic deposits as of 2023, with community banks at 13 percent. It stated that JPMorgan Chase and Bank of America alone held more than one-and-a-half times the combined deposit share of the entire community banking industry.
Post-GENIUS Act deposit trends
The GENIUS Act was signed on July 18, 2025. The Blockchain Association reported that U.S. bank deposits increased in each subsequent quarter: $92.2 billion in the third quarter of 2025, $318.3 billion in the fourth quarter of 2025, and $389.7 billion in the first quarter of 2026.
The group stated that U.S.-based exchanges have paid rewards on USDC for more than four years under existing law. It said community bank deposits did not collapse during that period.
A CRA International analysis covering 2019 to 2025 found no statistically significant relationship between stablecoin growth and community bank deposit outflows.
Under worst-case assumptions the estimated impact was less than 7 percent; under realistic conditions it was under 1 percent. The analysis indicated that stablecoin market capitalization and community bank deposits generally moved in the same direction.
The Blockchain Association compared the situation to money market funds, Treasury bills and brokered certificates of deposit, which have offered higher yields than checking accounts for years without emptying deposit accounts.
It placed the size of the stablecoin market at approximately $300 billion and identified decades of consolidation into megabank platforms and money-market sweep products as the primary long-term factor in deposit shifts.
Banking industry position on related legislation
In an opinion piece published recently, Rob Nichols of the American Bankers Association stated that the ABA seeks to strengthen the CLARITY Act rather than prevent its passage. Nichols wrote that banks of all sizes support establishing a comprehensive regulatory framework for digital assets.
He identified one short provision in the approximately 600-page bill as needing clarification to implement the bipartisan goal of preventing stablecoins from functioning as shadow interest-bearing deposits while still allowing payments innovation. Nichols noted that the 2025 GENIUS Act already bars stablecoin issuers from offering interest or yield.
The remaining question, he said, is whether affiliates such as crypto exchanges can offer interest-like rewards that could encourage consumers to shift bank deposits into stablecoin wallets. Nichols described this as an effort to work around the GENIUS Act prohibition.
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