When Congress passed the GENIUS Act earlier this year, lawmakers made their intent clear: payment stablecoins were designed to function as digital payment tools — not as unregulated, interest-bearing deposits. Section 4(a)(11) of the law explicitly prohibits stablecoin issuers from paying any form of interest or yield, whether in cash, tokens, or any other form of compensation, to those who hold them.
But even before the ink dried, large financial and technology companies began testing the limits of that prohibition. They’ve rebranded interest as “rewards,” “rebates,” and “cashback” programs — using marketing language to disguise what are effectively yield payments. These schemes may skirt the letter of the law, but they violate its spirit and threaten to undermine the stability of the U.S. financial system.
If these loopholes remain open, the fallout could be severe. Treasury officials have warned that as much as $6.6 trillion in bank deposits could migrate into unregulated stablecoin markets. That would drain funding from the community banks that keep Louisiana’s economy moving — the same institutions that make loans to small businesses, family farms, and first-time homebuyers. Fewer deposits mean fewer loans, higher interest rates, and tighter credit for working families across the state.
To protect consumers and preserve financial stability, the Department of the Treasury should move quickly to close the loophole. Treasury can do this by:
Making clear that the GENIUS Act’s prohibition covers any direct or indirect transfer of value for holding stablecoins, no matter how it’s labeled.
Defining “interest” and “yield” broadly to include all economic benefits — from cash and tokens to fee reductions and promotional credits — that function as a return on holding stablecoins.
Extending the prohibition to affiliates and third-party partners, ensuring companies cannot bypass the law by routing payments through intermediaries.
Without decisive action, Washington’s well-intentioned law could unintentionally destabilize the banking system, weaken credit markets, and harm the very families and small businesses it was meant to protect.
For conservatives, this is a simple issue of accountability and fairness. Stablecoins may be the future of payments, but they cannot be allowed to operate as unregulated, yield-bearing products that hollow out community banks and reward corporate rule-breaking.
Treasury has the authority to act — and the responsibility to ensure that innovation doesn’t come at the expense of Louisiana’s economic stability.
