The GENIUS Act Explained: The U.S. Federal Stablecoin Law

Signed July 18, 2025 · Public Law 119-27 · Guiding and Establishing National Innovation for U.S. Stablecoins Act

Last reviewed: October 24, 2026

The GENIUS Act sets up a federal framework for "payment stablecoins," the dollar-style tokens explained in our Stablecoins Explained guide. This page sums up what the law says, using the official congress.gov summary and the enacted text. It's a plain-English overview, not legal advice.

What is a payment stablecoin?

Under the act, a payment stablecoin is a digital asset that is used, or designed to be used, for payment or settlement. Its issuer must be obligated to convert, redeem or repurchase it for a fixed amount of money, and must represent that it will hold a stable value (Sec. 2).

The definition leaves out national currencies, bank deposits (including deposits recorded on a blockchain) and securities. Payment stablecoins issued by permitted issuers are not securities or commodities under federal law (Sec. 17).

The act also says payment stablecoins are not backed by the U.S. government and are not covered by FDIC deposit insurance or credit union share insurance. It makes it unlawful to claim otherwise (Sec. 4).

Who can issue them?

Only a "permitted payment stablecoin issuer" may issue a payment stablecoin in the United States (Sec. 3). Under the act, that means a company formed in the U.S. that is one of these three:

A subsidiary of an insured bank or credit union approved to issue payment stablecoins (Sec. 5).
A federal qualified issuer, a nonbank issuer supervised by the Office of the Comptroller of the Currency (OCC).
A state qualified issuer, regulated by a state whose rules are substantially similar to the federal framework. The state option is limited to issuers with $10 billion or less in stablecoins outstanding. Above that, an issuer generally has to move to federal oversight or get a waiver (Sec. 4 and 7).

Knowingly issuing a payment stablecoin without being permitted can bring fines of up to $1 million per violation, up to 5 years in prison, or both (Sec. 3). A public company that isn't mainly in financial services can't issue one unless a Stablecoin Certification Review Committee approves it unanimously (Sec. 4).

Reserve requirements

Permitted issuers must back their stablecoins one-to-one with reserves (Sec. 4). The allowed reserve assets are:

U.S. coins and currency, and certain balances at a Federal Reserve Bank
Deposits that can be withdrawn on demand at insured banks and credit unions
Treasury bills, notes or bonds with 93 days or less to maturity
Certain overnight repurchase and reverse repurchase agreements backed by short-term Treasuries
Certain money market funds that invest in the assets above
Other similarly liquid federal government-issued assets approved by regulators
Tokenized forms of certain assets above, where they meet applicable law

Reserves generally can't be pledged, lent out or reused, with limited exceptions (Sec. 4).

Disclosure and audits

Each permitted issuer must:

Publish its redemption policy and all fees for buying or redeeming, with at least 7 days' notice before changing fees.
Publish its reserves every month on its website: the number of tokens outstanding and the amount and makeup of the reserves.
Have each monthly report examined by a registered public accounting firm, with the CEO and CFO certifying it to their regulator. A knowingly false certification is a crime.
If it has more than $50 billion outstanding, also publish an annual audited financial statement.

(All Sec. 4.)

Other rules for issuers

No interest for holding. Issuers can't pay holders any interest or yield just for holding, using or keeping a payment stablecoin (Sec. 4).
Anti-money-laundering rules apply. Permitted issuers are treated as financial institutions under the Bank Secrecy Act (Sec. 4).
Holders come first in a failure. The act sets out how holders are treated if an issuer becomes insolvent, including priority for holders' claims (Sec. 11).
Custody rules. Companies that hold stablecoin reserves, collateral or issuing keys for others must keep them separate from their own assets (Sec. 10).

Who supervises issuers

Each issuer has a primary federal regulator, depending on its type (Sec. 2):

Bank subsidiaries: the parent bank's federal banking agency
Credit union subsidiaries: the National Credit Union Administration
Federal qualified nonbank issuers: the OCC

State qualified issuers are supervised by their state. The Federal Reserve or the OCC can step in in "unusual and exigent circumstances" (Sec. 7).

Stablecoins from outside the U.S.

The act sets a path for foreign issuers rather than a flat ban (Sec. 18). A foreign-issued payment stablecoin can be offered in the U.S. through a digital asset service provider if:

The Treasury Department decides the issuer's home country has comparable regulation and supervision.
The issuer registers with the OCC.
The issuer holds enough reserves in U.S. financial institutions to meet U.S. customers' needs, with some exceptions.
The home country is not under U.S. sanctions.

Starting 3 years after enactment (July 18, 2028), digital asset service providers can't offer or sell payment stablecoins to people in the U.S. unless a permitted issuer issued them, except through this foreign-issuer path (Sec. 3).

What it means for existing stablecoins

Any company that wants to offer a payment stablecoin to people in the U.S. has to fit one of these paths, either by becoming a permitted issuer or by qualifying under the foreign-issuer process. How each company does that is up to it and its regulators. This page doesn't predict how any individual issuer will fare. Issuers' own published reserve reports and regulators' announcements are the places to check.

What about algorithmic stablecoins?

The act doesn't use the word "algorithmic." Payment stablecoins from permitted issuers have to be backed by the reserve assets listed above.

The act also directs Treasury to study "endogenously collateralized" stablecoins and report to Congress within a year (Sec. 14). These are tokens that rely solely on the value of another token from the same creator to hold their price. TerraUSD, which collapsed in 2022, used a design like this, as our Stablecoins Explained guide describes.

Banks and deposit tokens

Because subsidiaries of insured banks and credit unions are one of the issuer types, banks can issue payment stablecoins through a subsidiary. Separately, the act says it doesn't limit banks' and credit unions' existing authority to issue digital assets that represent deposits (Sec. 16).

What the GENIUS Act doesn't cover

It doesn't regulate bitcoin, ether, XRP, HBAR, XLM or other non-stablecoin crypto. How those are classified (security or commodity) is the subject of separate market-structure legislation, such as the CLARITY Act.
It doesn't pick a blockchain. Nothing in the act requires an issuer to use any particular network, public or private.
It doesn't settle the XRP securities question. The SEC's case against Ripple was about how XRP sales were treated under securities law. That's a separate legal question from stablecoin rules.
It doesn't cover your own wallet transfers. The issuing and sales rules in Sec. 3 don't apply to direct transfers between two people acting for themselves without an intermediary, or to transactions through a software or hardware wallet that lets someone hold their own crypto.

Key provisions at a glance

Only permitted issuers may issue payment stablecoins in the U.S.: bank and credit union subsidiaries, OCC-supervised federal qualified issuers, or state qualified issuers ($10 billion cap for the state option).
One-to-one reserves in cash, deposits, short-term Treasuries and other listed liquid assets. No reuse of reserves, with limited exceptions.
Monthly reserve reports, examined by a registered public accounting firm and certified by the CEO and CFO.
No interest or yield paid to holders just for holding.
Not securities or commodities. Not FDIC-insured or government-backed.
Bank Secrecy Act anti-money-laundering rules apply to issuers.
Holders' claims get priority if an issuer becomes insolvent.
Foreign issuers can serve U.S. users only through a comparability determination and OCC registration.
Takes effect on the earlier of January 18, 2027, or 120 days after regulators issue final rules (Sec. 20).

Timeline

Feb 4, 2025: Sen. Bill Hagerty (R-TN) introduces an earlier version, S.394.
May 1, 2025: S.1582, the version that became law, is introduced in the Senate.
May 19, 2025: The Senate votes 66–32 to end debate on taking up the bill (a procedural vote, not passage).
June 17, 2025: The Senate passes S.1582, 68–30.
July 17, 2025: The House passes S.1582, 308–122.
July 18, 2025: The President signs it. It becomes Public Law 119-27.
By January 18, 2027: The act takes effect, or 120 days after final regulations if that comes sooner.
July 18, 2028: The 3-year deadline for digital asset service providers on non-permitted stablecoins.

What comes next

The GENIUS Act covers payment stablecoins. The wider question of how other digital assets are classified, and the rules for exchanges and DeFi, is handled in separate market-structure legislation.

Follow the CLARITY Act tracker

Sources

Congress.gov, S.1582, GENIUS Act: summary (CRS) and all actions.
Congress.gov, S.394, GENIUS Act of 2025 (introduced Feb. 4, 2025).
GovInfo, Public Law 119-27, enacted text.

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