The legislation was intended to establish rules of the road for the crypto sector for the first time. But it suffered a stinging defeat in the Senate on Tuesday.
Community bankers have been especially vocal. They have said allowing crypto companies to offer these types of incentives would have posed a direct threat to their business and led them to lose customers.
Rebeca Romero Rainey, president and CEO of the Independent Community Bankers of America, said that keeping their customers' money with local banks is critical because it allows them to provide small business and agricultural loans to members of their communities.
"If community banks aren't there, and those local deposits aren't there to fund it, who's going to fund those small businesses and ranchers and farmers?" she said. "I don't think it's going to be the crypto industry."
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