Stablecoins May Lower Washington’s Borrowing Costs — But at What Price for Louisiana?

The GENIUS Act, signed into law this summer, creates the first federal framework for payment stablecoins. In Washington, the headlines have focused on what this means for the federal debt: with stablecoins required to hold U.S. Treasuries as reserves, demand for federal debt could rise by as much as $2 trillion by 2028. Economists predict that will ease borrowing costs for the Treasury.

But here in Louisiana, the impact looks very different. Stablecoins don’t just absorb Treasuries. They also pull deposits out of banks — deposits that small businesses and families rely on for loans. The American Bankers Association estimates up to 10% of U.S. bank deposits could migrate to stablecoins, forcing banks to turn to costlier funding sources. Higher bank funding costs inevitably mean higher interest rates for everyday borrowers.

For a state where community banks are often the lifeline for small businesses, that’s a serious concern. Whether it’s a rice farmer in Crowley financing new equipment, or a Lafayette startup seeking working capital, the cost of credit directly affects Louisiana’s ability to grow and compete.

Federal policymakers may celebrate marginally cheaper Treasury bills, but the long-run tradeoff could be fewer opportunities for Louisiana’s Main Street entrepreneurs. Stablecoins may be the future of digital payments, but they cannot become an innovation that hollows out the foundation of local credit markets.

That’s why Louisiana needs leaders like Senator John Kennedy, who has long been a watchdog for financial stability and a defender of community banks, to press for changes. Closing loopholes in the GENIUS Act and ensuring stablecoins don’t drain deposits from local lenders would protect Louisiana families and businesses from higher borrowing costs.

Kennedy’s voice carries weight in Washington’s financial debates. By insisting on a framework that balances innovation with credit access, he can make sure Louisiana’s small businesses and families aren’t left paying the price for Wall Street’s latest experiment.