Listen to article \u2022\u00a00:00 min<\/p>\n
Happy 250th birthday, America! As we celebrate our republic, we are reminded that one of our nation\u2019s greatest strengths has been embracing change and innovation while building safeguards that protect the people and communities that fuel our economy.<\/p>\n
This goes for banking, too. It\u2019s easy to forget, but this nation didn\u2019t always have a stable monetary system. President Andrew Jackson fought the powerful elite to decentralize savings and lending. Even the almighty dollar was once up for debate; it wasn\u2019t until the 1870s that Congress would issue \u201cgreenbacks\u201d everyone could count on.<\/p>\n
Financial innovation has succeeded because policymakers took the time to ensure new ideas strengthened, not weakened, the foundation of our economy. But innovation should never come at the expense of the families and farmers that depend on community banks, the backbone of America\u2019s financial system.<\/p>\n
These institutions put local deposits to work in the communities they serve, providing loans that help them thrive. More than 99% of businesses<\/a> in Pennsylvania are small businesses, and small farms \u2014 those generating under $250,000 in revenue \u2014 make up 85%<\/a> of the 49,000 farms in our state. Agriculture contributes $27.5 billion<\/a> to Pennsylvania\u2019s gross state product, and farms, like small businesses across the state, depend most on the kind of relationship-driven lending community banks provide.<\/p>\n Unfortunately, state legislation currently being considered in Harrisburg poses a serious threat to local lending and the communities that depend on it.<\/p>\n House Bill 2647<\/a> would allow faceless crypto platforms and payment stablecoins (price-stabilized cryptocurrencies) to operate alongside community banks, but without the same Federal Deposit Insurance Corp. (FDIC) insurance requirements, antidiscrimination rules, capital requirements, and other public protections community banks are obligated to maintain.<\/p>\n Beyond weakening consumer protections, the Independent Community Bankers of America<\/a> estimates yield-bearing stablecoins could pull $1.3 trillion in deposits from community banks nationwide, cutting local lending capacity in Pennsylvania by approximately $35 billion. Every dollar that leaves a community bank is one less dollar available to help a family buy a home, an entrepreneur start a business, or a farmer plant next season\u2019s crops.<\/p>\n If legislation allowing state licensing of payment stablecoin issuers advances without adequate safeguards, it will weaken local lending and undermine Pennsylvania\u2019s economy.<\/p>\n That is why the current stablecoin debate deserves careful attention.<\/p>\n