The GENIUS Act, in full the Guiding and Establishing National Innovation for U.S. Stablecoins Act, is a United States federal statute that regulates the issuance of payment stablecoins. It was signed into law on 18 July 2025 after passing the Senate in June and the House of Representatives in July of that year with support from both parties. It is the first federal law in the country devoted to a category of digital asset.
The Act defines a payment stablecoin as a digital asset designed to be used for payment or settlement that the issuer is obliged to redeem for a fixed amount of money and that is represented as maintaining a stable value. It restricts who may issue such tokens, requires them to be fully backed by safe assets, and divides supervision between federal and state authorities. It is often compared with the stablecoin provisions of the European Union's Markets in Crypto-Assets Regulation.
Who may issue
Once the Act is in force, only a permitted payment stablecoin issuer may issue a payment stablecoin in the United States. There are three routes.
- Bank subsidiaries. A subsidiary of an insured bank or credit union, approved by the parent's primary federal regulator.
- Federal qualified issuers. A non-bank entity, an uninsured national bank or a federal branch of a foreign bank, approved and supervised by the Office of the Comptroller of the Currency.
- State qualified issuers. An entity approved by a state regulator under a state regime certified as substantially similar to the federal one. This route is open to issuers with no more than 10 billion dollars of stablecoins outstanding; above that level an issuer must move to federal oversight unless granted a waiver.
Public companies whose main business is not financial are barred from issuing unless a committee of senior federal officials unanimously approves, a provision aimed at large technology and retail firms. A foreign stablecoin issuer may offer its tokens to people in the United States only if its home regime is judged comparable, it registers with the Comptroller, holds sufficient reserves in United States institutions and can comply with lawful orders.
Reserves and redemption
Issuers must hold identifiable reserves backing outstanding tokens at least one for one. Permitted stablecoin reserves are limited to United States currency and balances at Federal Reserve Banks, demand deposits at insured institutions, short-dated Treasury bills and other Treasury securities with a remaining maturity of 93 days or less, certain overnight repurchase agreements backed by Treasuries, and government money market funds. Reserves may not be pledged or reused except in narrow circumstances. The model is that of a fiat-backed stablecoin; an algorithmic stablecoin without such backing does not qualify.
Each issuer must publish its redemption policy and honour stablecoin redemption in a timely way, and must disclose the composition of its reserves every month. The monthly report is examined by a registered public accounting firm, a form of reserve attestation, and certified by the chief executive and chief financial officers. Issuers with more than 50 billion dollars outstanding must also publish audited annual financial statements.
Other key provisions
Issuers may not pay holders interest or yield merely for holding the token, which distinguishes payment stablecoins from deposits and from yield-bearing stablecoins. Their activities are limited to issuing and redeeming stablecoins, managing reserves and closely related services.
Permitted issuers are treated as financial institutions under the Bank Secrecy Act. They must maintain anti-money laundering and sanctions programmes and must have the technical ability to block, freeze and reject transactions when lawfully ordered, the capability known as stablecoin freezing.
The Act states that a payment stablecoin issued by a permitted issuer is not a security or a commodity under federal law, removing it from the main jurisdiction of the securities and commodities regulators. If an issuer becomes insolvent, holders' claims on the reserves rank ahead of other creditors.
Timing
The law takes effect on the earlier of eighteen months after enactment or 120 days after the primary federal regulators issue final implementing regulations. The Treasury Department, the Comptroller, the Federal Reserve, the Federal Deposit Insurance Corporation and the National Credit Union Administration have since proposed implementing rules. The Comptroller issued the first final rule in October 2026, and the Act takes effect on 18 January 2027. Three years after enactment, exchanges and other digital asset service providers in the United States will be prohibited from offering payment stablecoins that were not issued by a permitted or qualifying foreign issuer.
Effects and debate
Supporters argue that the Act gives legal certainty to a market previously governed by a patchwork of state money transmitter and trust laws, protects holders through reserve and insolvency rules, and supports demand for dollars and Treasury debt abroad. Banks and payment companies announced stablecoin plans in the months after its passage, and existing issuers of tokens such as USDC and USDT began adapting their structures to it.
Critics raise several concerns. Banking groups argue that the ban on interest can be sidestepped when exchanges or affiliates pay rewards on stablecoin balances, drawing deposits away from banks. Consumer advocates note that holders lack deposit insurance and that the priority given to them in insolvency is untested. Others point to the absence of a guaranteed central bank backstop for issuers, to limits on federal oversight of smaller state-supervised issuers, and to conflict-of-interest questions arising from stablecoin ventures linked to political figures.