The U.S. Congress accepted, and President Donald Trump signed, the Guiding and Establishing Nationwide Innovation for U.S. Stablecoins Act (GENIUS Act), which introduces a federal regulatory framework for stablecoins and imposes strict necessities on their issuers.
On July 17, 2025, the U.S. Senate and Home of Representatives accepted the federal invoice S.1582, the GENIUS Act, aimed toward clarifying the regulation of the stablecoin market within the nation. On July 18, 2025, the laws was formally signed by President Donald Trump.
The invoice prohibits the issuance and circulation of unsecured cost tokens, requires full backing of stablecoin reserves, and introduces obligatory reporting by stablecoin issuers to regulators. It additionally establishes a supervisory framework for the stablecoin market within the U.S.
Key provisions of the GENIUS Act:
- Stablecoins might solely be issued by registered issuers. Any issuance with out approval is punishable by fines as much as $1 million and imprisonment as much as 5 years.
- Reserve backing of stablecoins should be maintained at a 1:1 ratio. Solely extremely liquid belongings are permitted as reserves, together with: money held in Federal Reserve accounts, treasury bonds with a remaining maturity of as much as 93 days, and repos with authorities securities which are reversible inside 7 days, with counterparties restricted to extremely dependable monetary establishments.
- Rehypothecation of reserves is prohibited. Property backing stablecoins should be held in “clear” kind, that means they’ll’t be used as collateral for different issuer operations. Nevertheless, issuers might use a part of the reserves in non permanent transactions to make sure liquidity for redemptions, however solely with prior regulatory approval.
- Curiosity funds to holders are banned. Stablecoin issuers might not pay curiosity or some other rewards for holding tokens — neither in digital belongings, fiat forex, nor different devices.
- Issuers should publish reserve compositions month-to-month, certify senior administration, and disclose unbiased audits carried out by registered audit corporations. Issuers with belongings over $50 billion should additionally present enhanced monetary reporting.
- Issuers with turnover as much as $10 billion might function below state-level regulatory oversight. All others fall below federal jurisdiction. The regulation additionally offers for joint regulation.
- Stablecoins issued by registered issuers received’t be thought-about securities, commodities, or deposits, and thus received’t fall below the jurisdiction of the Securities Investor Safety Company (SIPC), the Securities and Trade Fee (SEC), or the Commodity Futures Buying and selling Fee (CFTC). The cost stablecoin market can be regulated by the Treasury, the Federal Reserve, and banking regulators — the Workplace of the Comptroller of the Foreign money (OCC), the Federal Deposit Insurance coverage Company (FDIC), and the Nationwide Credit score Union Administration (NCUA).
The GENIUS Act will formally take impact on January 8, 2027. Nevertheless, if implementing laws are adopted earlier, the regulation will come into pressure 120 days after their approval.
Representatives of the crypto trade referred to as the regulation a “turning level” that removes authorized uncertainty and stimulates innovation. Jeremy Allaire, CEO of Circle, who attended the signing ceremony with President Donald Trump, referred to as the invoice “one of the transformative items of laws in many years.” Hester Peirce, SEC Commissioner recognized for her progressive stance on crypto, emphasised that the GENIUS Act lastly clarifies that stablecoins aren’t securities. Based on her, years of jurisdictional confusion between the SEC and CFTC lastly ended.
Nonetheless, some essential voices stay within the trade. For instance, Dante Disparte, Circle’s CSO, argues that whereas the regulation creates transparency, it successfully entrenches the positions of huge centralized issuers as a result of pricey approval and audit course of. Moreover, he believes the GENIUS Act might totally exclude decentralized stablecoins, as algorithmic stablecoin fashions are utterly banned below the brand new regulatory regime.
Curiosity in stablecoins amongst small and medium-sized companies (SMB) within the U.S. greater than doubled in 2025, whereas main American banks plan to difficulty their very own stablecoins. In the meantime, the overwhelming majority of TradFi firms worldwide actively use or plan to implement options primarily based on stablecoins within the close to future.
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