Community banks across the United States are sounding an alarm to the U.S. Senate regarding stablecoins, warning that the digital assets could siphon trillions of dollars in deposits from traditional banking institutions. Over 100 regional bank executives, primarily through the American Bankers Association (ABA) and its Community Bankers Council, have urged lawmakers to close perceived loopholes in stablecoin legislation, specifically the recently passed GENIUS Act. Their main concern centers on stablecoin issuers and affiliated crypto exchanges offering indirect 'yields,' 'rewards,' or 'cashbacks' that effectively circumvent the statutory ban on interest payments, incentivizing customers to move savings out of traditional banks. This potential 'deposit flight' is feared to undermine community banks' ability to fund local lending for households and small businesses, with Treasury estimates cited by the ABA suggesting a risk to as much as $6.6 trillion in deposits. In stark contrast, financial giant JPMorgan maintains a calm and optimistic stance on stablecoins, viewing them as complementary financial tools rather than systemic risks to the broader financial system. JPMorgan CEO Jamie Dimon has indicated the bank's intention to increase its involvement with stablecoins, acknowledging their role in enhancing transaction efficiency, particularly for cross-border payments and 24/7 operations. The bank's blockchain unit, Onyx, is already moving to integrate its JPM Coin, a deposit token, with the Canton Network for real-time settlement of tokenized assets. This divergence highlights a fundamental debate within the financial industry regarding the integration and regulation of digital currencies. While the GENIUS Act provides a framework for payment stablecoins, and the CLARITY Act aims to clarify digital asset classifications and regulatory jurisdictions, the ongoing debate, as evidenced by Coinbase's potential withdrawal of support for the CLARITY Act over reward restrictions, underscores the complex challenges of balancing innovation with consumer protection and financial stability. Some research, however, suggests the impact of stablecoin growth on community bank deposits may be insignificant.