The GENIUS Act — the Guiding and Establishing National Innovation for US Stablecoins Act — is the United States' first federal law governing payment stablecoins. President Trump signed it on 18 July 2025, after the Senate passed it 68–30 on 17 June and the House followed 308–122 on 17 July. It makes the US one of a small number of jurisdictions with a full stablecoin statute on the books, alongside the EU's MiCA framework, which took full effect in December 2024.
This article explains what the law actually requires, which agencies enforce it, and who it touches.
What the GENIUS Act covers
The law creates a federal regulatory framework for payment stablecoins — defined as digital assets that an issuer must redeem for a fixed monetary value, designed for payment or settlement. The definition is technology-neutral but squarely targets dollar-pegged tokens like USDC and USDT; it does not extend to floating crypto-assets, securities, or central bank digital currencies.
The law does not apply to stablecoins issued by Federal Reserve banks or foreign central banks.
The licensed-issuer system
The core mechanism is a permitted issuer requirement: only licensed entities may offer a payment stablecoin to US persons. Three categories qualify:
- Subsidiaries of insured depository institutions — banks that already hold FDIC insurance may charter a stablecoin-issuing subsidiary under their existing federal or state bank charter.
- Federally qualified nonbank issuers — non-bank companies approved by the Office of the Comptroller of the Currency (OCC). This is the main pathway for fintech issuers like Circle that are not deposit-taking banks.
- State-qualified issuers — entities licensed under a state framework that the Stablecoin Certification Review Committee (SCRC) has certified as "substantially similar" to federal standards. State issuers are capped at $10 billion in outstanding stablecoins; above that threshold, federal oversight kicks in unless a waiver is granted.
States with existing digital-asset rules receive expedited certification within 180 days of enactment.
Reserve requirements
Every permitted issuer must maintain 100% reserve backing with qualifying liquid assets at all times. The permitted asset classes are:
| Asset class | Notes |
|---|---|
| US currency | Cash on hand or held at insured institutions |
| Demand deposits | At FDIC-insured banks (including correspondent-bank deposits) |
| Treasury securities | Maturity of 93 days or less |
| Overnight repos | Backed by short-term Treasuries |
| Qualifying money market funds | Investing in the above asset classes |
| Tokenised forms | Of any approved asset class |
What is prohibited: cryptocurrencies, other securities, and any use of reserves as collateral. Reserves may not be pledged, rehypothecated, or reused for any purpose other than meeting redemption requests or satisfying margin obligations and custodial arrangements.
Monthly disclosures and audits
Issuers must publish monthly reports on their websites, examined by a registered public accounting firm, disclosing:
- Total outstanding stablecoins
- Reserve composition, amounts, and average maturity
- Custodial geography
Officers must certify accuracy to their regulators. Issuers with more than $50 billion in outstanding stablecoins (if not publicly traded) must additionally file annual audited financial statements prepared under GAAP.
Redemption rights
The Act requires issuers to establish timely redemption procedures, publicly disclosed in plain language. Fee changes require at least seven days' prior notice to holders. This is a baseline floor; regulators may add requirements through rulemaking.
Interest prohibition
Issuers may not pay holders any form of interest or yield solely in connection with holding, using, or retaining a payment stablecoin. The yield on reserves stays with the issuer. (Holders can earn yield separately through lending protocols or other products, but the stablecoin itself is a non-interest-bearing instrument under the GENIUS Act.)
Which agencies do what
| Agency | Role under the GENIUS Act |
|---|---|
| OCC | Approves federally qualified nonbank issuers; registers foreign issuers; primary federal supervisor for federal-pathway issuers |
| Federal Reserve | Co-supervisor with states for bank-subsidiary issuers; emergency enforcement against state issuers; voting member of the SCRC |
| FDIC | SCRC voting member; handles insolvency proceedings for failed issuers |
| Treasury / Secretary | SCRC chair; administers foreign-issuer enforcement; designates non-compliant foreign issuers |
| FinCEN | Issues Bank Secrecy Act anti-money-laundering guidance and risk standards for issuers |
The Stablecoin Certification Review Committee (OCC, Fed, FDIC, and Treasury) reviews and approves state stablecoin frameworks. All permitted issuers — regardless of pathway — are explicitly subject to the Bank Secrecy Act, which means mandatory AML programs, suspicious-activity reporting, and sanctions screening.
Foreign issuers
Foreign issuers cannot directly offer stablecoins to US persons, but may do so through US digital-asset service providers if they satisfy five conditions: comparable home-country regulation (determined by the Treasury Secretary), OCC registration, US reserves sized to local customer demand, no nexus to sanctioned jurisdictions, and compliance with US asset-seizure orders.
Treasury may designate non-compliant foreign issuers and bar US platforms from listing their tokens. The penalty for US persons who knowingly deal in non-compliant foreign stablecoins is a civil penalty of up to $1 million per day.
What the GENIUS Act does not resolve
The law sets a federal floor; rulemaking by the OCC, Fed, FinCEN, and Treasury will fill in the details. Several questions remain open as of mid-2026:
- Exact reserve quality standards beyond asset-class eligibility
- Precise redemption timeframes (the Act says "timely" without a specific window)
- The insolvency treatment of stablecoin holders in a bank-subsidiary failure (regulators must complete a study within three years)
The bottom line
The GENIUS Act closes the legal gap that left the stablecoin market in regulatory limbo for years. It defines who can issue, what can back the coins, what must be disclosed, and which agencies watch over each pathway. For businesses building on stablecoin rails, the practical effect is a clearer compliance roadmap — and a higher bar for any issuer that wants to serve US persons. For a side-by-side comparison of the US framework against the EU's MiCA, see GENIUS Act vs MiCA.