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Breaking: Latest Compromises Proposed by Crypto Firms to Banks let us know what is coming. To break the deadlock and salvage the bill, crypto industry representatives have floated targeted concessions focused on integrating community banks more directly into the stablecoin ecosystem. These proposals aim to address banks’ fears of disintermediation while giving smaller institutions new revenue opportunities: 1. Placing portions of stablecoin reserves with community banks • Instead of reserves being concentrated at large custodians (e.g., BNY Mellon) or megabanks, crypto issuers could allocate a meaningful share to community/regional banks. • This would recycle dollars back into the local banking system, supporting lending and reducing outflow concerns. It could also diversify reserve custody, potentially improving stability and earning banks custodial fees. 2. Enabling community banks to issue their own stablecoins via partnerships • Smaller banks could partner with crypto firms (e.g., tech providers or issuers like Circle) to launch branded or co-issued stablecoins. • This positions banks as active participants rather than competitors being disrupted—potentially allowing them to offer digital dollar equivalents tied to their deposits, attract crypto-native customers, and generate new fee income. • Examples from related developments include state-level experiments (e.g., North Dakota’s planned “Roughrider” stablecoin via its state-owned bank partnering with community lenders) and broader explorations of tokenized deposits. These ideas represent a pragmatic olive branch: crypto concedes some ground on reserve concentration and yield structures in exchange for broader regulatory approval, while banks gain direct involvement and potential upside in the growing stablecoin market (projected by some forecasts to reach trillions in capitalization).