At the African American Chamber of Commerce of New Jersey, our mission is clear: To economically empower and sustain African American communities and businesses through entrepreneurship and capitalistic initiatives. We believe in creating the conditions for Black-owned small businesses to thrive, not just for the sake of profit, but for the broader well-being of our communities, families and future generations.
That’s why we must speak out about a troubling oversight in federal cryptocurrency policy that has the potential to undermine the very communities we are working to uplift.
Buried in the GENIUS Act, a piece of federal legislation designed to promote innovation in the digital asset space, is a loophole that allows cryptocurrency companies to offer rewards and incentives, like cashback in crypto or promotional bonuses, to attract consumer deposits. This loophole allows cryptocurrency platforms to operate as quasi-bank accounts, even though they don’t meet the same regulatory standards. And, since they do not meet the requirements of a bank, cryptocurrency investments aren’t protected by the FDIC, unlike deposits in community banks.
That’s why these platforms can offer perks that may seem harmless, but in practice, they are quietly pulling millions of dollars away from local banks, especially community-based banks that serve Black entrepreneurs and underserved neighborhoods.
Local banks are reliant on deposits from community members to fund the lending that keeps small businesses running. These deposits are not just numbers in a ledger, they are the financial engine that allows a barber to renovate his shop in Trenton, a caterer in Newark to expand her kitchen or a trucking startup in Camden to buy a second vehicle. Thanks to the Community Reinvestment Act, banks are required to reinvest in the very neighborhoods they serve, which is something that crypto companies are not required to abide by.
When deposits are siphoned away into cryptocurrency platforms, local banks lose their ability to extend credit to the very businesses that depend on them. And, when access to credit dries up, it becomes exponentially harder for Black-owned businesses, who already face well-documented barriers to traditional financing, to survive.
The impact of this isn’t theoretical. We’re already seeing how tighter credit conditions, rising costs and reduced access to capital are putting pressure on small Black-owned businesses. Layering on an incentive structure that diverts money from local banks to speculative crypto platforms only exacerbates the problem. It threatens to destabilize community-based banks and, in turn, the neighborhoods they support. This loophole doesn’t just move money, it moves opportunity. It moves jobs. It moves the possibility of building generational wealth further out of reach.
Congress has an opportunity to fix this. As lawmakers take up new legislation to regulate cryptocurrency markets, they must prioritize closing the GENIUS Act loophole that allows crypto platforms to act like banks without the responsibility or oversight. We need guardrails that ensure financial innovation doesn’t come at the cost of community stability.
At the AACCNJ, we are calling on U.S. Sen. Andy Kim (D-N.J.) and other leaders to listen to the voices of Black small business owners, community bankers and advocates who see what’s happening on the ground. We urge Congress to adopt a balanced approach, one that fosters growth and innovation while protecting the vital role of local banks in underserved communities.
The future of Black-owned businesses and the communities they anchor depends on it.
John Harmon is founder, CEO and president of the African American Chamber of Commerce of New Jersey.
