Traditional banking lobbying groups are reportedly lining up against crypto ahead of upcoming digital asset legislative actions in Washington, DC.

Representatives of smaller banks are concerned about the impact of stablecoins on their business, Politico reports.

Christopher Williston, president and CEO of the Independent Bankers Association of Texas, tells the news outlet that it “feels like there’s a move to replace us” amid concerns that small bank customers could move their money into digital asset products.

Williston argues that the GENIUS Act, signed into law last month by President Donald Trump, is “a fundamental threat to bank deposits” for community banks.

The new legislation establishes a regulatory framework for stablecoins, requiring each token to be fully backed by liquid assets such as cash or short-term US Treasuries.

Multiple banking trade associations also recently penned a letter to lawmakers asking them to consider repealing a section of the GENIUS Act that they argue allows uninsured depository institutions to skirt state regulatory oversight.

“Section 16(d) allows any state-chartered uninsured depository institution with a stablecoin subsidiary to perform traditional (i.e., not solely related to payment stablecoins) money transmission and custody activities nationwide through that subsidiary, thereby bypassing host state licensing and allowing substantially less state oversight. This unprecedented overriding of state law and supervision weakens vital consumer protections, creates opportunities for regulatory arbitrage, and undermines state sovereignty.

Uninsured depository institutions present distinct risks, and individual states have a strong interest in< safeguarding their residents from the heightened risk of financial harm if such institutions fail or if they harm consumers.”