Most Mainers have never heard of stablecoins. That's understandable. Until recently, stablecoins were largely confined to discussions among cryptocurrency enthusiasts and financial technology companies.

Yet a debate taking place in Congress right now could ultimately affect whether a Maine family gets a mortgage, a contractor buys a new plow truck before winter, a bed-and-breakfast renovates its guest rooms, or a lobsterman finances a boat for the next season.

Congress is expected to take up this issue in the coming weeks, and they need to get this right. If they don’t act, stablecoins could undermine community banks' ability to lend to homebuyers and small businesses while leaving consumers without the protections provided by the banking industry.

A stablecoin is essentially a digital asset designed to maintain a stable value, usually by being backed by U.S. dollars or U.S. Treasury securities. The technology has great promise. Properly structured, stablecoins will make certain payments faster, more efficient and less expensive. I support innovation and believe our financial system should continue to evolve.

My concern isn't the technology itself, but whether stablecoins are allowed to become interest-bearing substitutes for bank deposits.

Think about the cash in your wallet. You carry it because it's useful for making payments. It's quick, convenient and efficient, not because it earns interest or carries FDIC insurance. Stablecoins were intended to serve a similar purpose in digital form. But once companies begin offering interest, rewards or yield for holding stablecoins, they stop functioning like digital cash and start functioning much more like savings accounts, but without the same level of consumer protection that bank accounts carry.

That distinction matters.

Community banks use local deposits to fund local loans, making nearly 60 percent of all U.S. small-business loans under $1 million, nationwide. The dollars Maine people and businesses deposit in local banks never sit idle. They are put back to work in our communities. They help finance homes, small businesses, fishing operations, logging equipment, and other investments that keep Maine's economy thriving.

Deposits are the fuel that powers local lending.

If deposits begin moving from banks into stablecoin products because those products offer yield or rewards, the lending capacity supported by those deposits goes away. Stablecoins don't fund local loans.

That risk is particularly important in Maine.

Maine banks currently hold $35.8 billion in deposits and $35.4 billion in loans, according to Maine Bankers Association. In other words, nearly every available deposit dollar is already supporting homeowners, businesses, nonprofits, and economic development across our state. There is very little excess capacity sitting on the sidelines.

This is why community banks in Maine and around the country have raised concerns about provisions in the Clarity Act, Congress's digital asset market structure legislation. While Congress has already prohibited stablecoin issuers from paying interest directly, loopholes remain that allow exchanges, affiliates, and other intermediaries to offer economically similar rewards under different names.

This isn't about protecting banks from competition or opposing innovation. Community banks compete and innovate every day, and we have for decades. It's about making sure similar products play by similar rules.

If an organization wants to attract customer funds by offering interest-like returns, it should be subject to safeguards that apply to banks. Products that function like deposit accounts should not be allowed to sidestep the consumer protections and regulatory oversight that apply to traditional banking.

Congress can support innovation while preserving the deposits that fund local lending. In fact, I believe that balance should be the goal.

Stablecoins can help modernize payment systems. They can play an important role in the financial system. But they should remain payment tools, not unregulated alternatives to bank deposits.

After all, the cash in your wallet doesn't pay interest. If you want your money to earn a return, you typically put it in a bank account.

And if Congress allows stablecoins to evolve into deposit substitutes, the real question isn't what happens to banks. It's what happens to lending that Maine communities depend upon.

What happens to the young family in Augusta? The plow guy in Presque Isle? The fisherman in Stonington? The innkeeper in Bar Harbor?

Their loans all begin with local deposits.

That's why Congress must get this right by closing the stablecoin yield loophole.