The GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins Act) is the first federal statute that defines who may issue a payment stablecoin in the United States and on what terms. Signed into law on 18 July 2025 as Public Law 119-27, the Act creates a permitted-payment-stablecoin-issuer perimeter, prescribes a narrow reserve composition, prohibits interest payments to holders, and splits supervision between the Office of the Comptroller of the Currency (OCC) at the federal level and state regulators below a $10 billion threshold (Public Law 119-27 PDF). The statute does not preempt state money-transmission law where state issuers stay below the threshold, but it does set a federal floor that every domestic issuer has to clear.
Scope
The Act applies to "payment stablecoins" issued in or sold into the United States. A payment stablecoin is a digital asset designed as a means of payment, redeemable on demand for a fixed amount of monetary value, and not a national currency, deposit, or security. Algorithmic constructions, multi-asset-backed tokens, and crypto-collateralised designs sit outside the permitted-issuer perimeter and cannot be marketed as payment stablecoins to US persons. Tokenised deposits remain bank deposits under existing banking law and are explicitly outside the GENIUS frame, as are tokenised money-market funds, tokenised securities, and central bank digital currency.
Foreign issuers face a reciprocal-comparability test: a digital asset service provider in the US may not offer a foreign-issued stablecoin unless the issuer's home jurisdiction operates a comparable regulatory and supervisory framework, and the issuer can comply with US lawful orders including asset freezes and sanctions directives (Latham GENIUS Act analysis).
Mechanics
The permitted issuer set has three branches. Subsidiaries of insured depository institutions can issue subject to approval from the relevant federal banking agency. Federally qualified non-bank issuers register with and are supervised by the OCC. State-qualified issuers may operate under a state regime certified as substantially similar to the federal regime, but only while their outstanding issuance stays at or below $10 billion; above that, they must transition to federal supervision within 360 days or stop new issuance (Latham GENIUS Act analysis). Non-financial public companies wishing to issue need unanimous approval from a Stablecoin Certification Review Committee chaired by the Treasury Secretary and including the Federal Reserve and FDIC chairs.
Reserves must be at least 1:1 with outstanding issuance and held only in a narrow asset list: US dollars and Federal Reserve notes, demand deposits at insured depository institutions, short-dated US Treasury bills, repurchase agreements collateralised by Treasuries, and money-market funds invested in those instruments. Reserves must be segregated from the issuer's general assets and held in custody arrangements designed to insulate holders from issuer insolvency. Monthly public reporting of reserve composition is mandatory, with examination by registered accountants and CEO/CFO certification. Issuers above $50 billion outstanding must publish annual audited financial statements (Latham GENIUS Act analysis).
Holders have a redemption right at par, with redemption fees and procedures disclosed in plain language. Issuers are barred from paying any form of interest or yield to holders tied to the holding period of the stablecoin. Issuers are designated financial institutions under the Bank Secrecy Act, with full anti-money-laundering, sanctions, and customer-identification obligations.
Status
Enacted 18 July 2025. The statute takes effect on the earlier of 18 months after enactment or 120 days after the primary federal stablecoin regulators issue final implementing regulations, with the rulemaking deadline set at one year from enactment (Latham GENIUS Act analysis). The OCC, Federal Reserve, and FDIC have published proposed rules in late 2025; final rules are expected through 2026, with full operational effect by early 2027 (Federal Register OCC GENIUS rule). State regulators are running parallel certification processes for their stablecoin regimes.
Implications for tokenisation
For a USD-pegged stablecoin operator, GENIUS sets the federal floor and forecloses issuer designs outside the three permitted branches. Circle's USDC, already supervised under NYDFS (New York Department of Financial Services) trust-charter arrangements, is positioned to slot into the federal-non-bank route. Tether (USDT) is the live test of the foreign-issuer comparability provision: without a comparable home regime, US-licensed exchanges and custodians cannot offer USDT to US persons. The deliberate effect is to push USDT distribution outside the regulated US perimeter while leaving the offshore market open.
For tokenised cash, the strategic split is now between bank-issued tokenised deposits (outside GENIUS, under banking law) and non-bank stablecoins (inside GENIUS). Banks running tokenised deposit programmes can offer interest, settle on shared infrastructure, and use existing deposit insurance; stablecoin issuers cannot. Corporate-cash use cases tilt toward tokenised deposits, consumer-payment use cases toward stablecoins.
The Bank Secrecy Act designation is the load-bearing operational requirement. Every permitted issuer has to run a full AML compliance stack, customer-identification programme, and sanctions screening against on-chain flows. That capability gap is non-trivial for non-bank issuers entering the perimeter.
Open questions
- Whether the comparability determination for foreign issuers will be granted to MiCA-compliant EMT issuers, and on what conditions.
- How the OCC will treat permitted issuers that hold reserves in tokenised money-market funds, given the reserve composition list permits money-market funds invested in qualifying assets.
- Whether the $10 billion state-issuer threshold will hold or be revisited as state-issued stablecoins scale.
- The interaction with the us clarity act on the digital-commodity perimeter once that statute lands, particularly for stablecoins distributed alongside tokenised commodities on the same venue.