ICBA Chair Warns Against Stablecoins Becoming Deposit Substitutes, Advocates for Prohibition on Yield
Alice Frazier, Chair of the Independent Community Bankers of America (ICBA) and President and CEO of Potomac Bank, has voiced concerns that stablecoins could become deposit substitutes, particularly if they are allowed to pay interest and rewards on deposits. Speaking on the 'This Month in Banking' podcast, Frazier emphasized the ICBA's focus on ensuring the Clarity Act keeps stablecoins strictly as a payment tool and prohibits them from offering yield. The ICBA argues that if stablecoins offer yield, it would negatively impact community banks and their ability to lend locally, as it would draw deposits away from traditional banking institutions. The ICBA is actively advocating for this prohibition, engaging with lawmakers and utilizing grassroots action centers to raise awareness about the stablecoin yield issue. 
