What is the GENIUS Act?
The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), Public Law 119-27 (S. 1582), was approved on 18 July 2025. It is the US federal framework for payment stablecoins: digital assets designed for payment or settlement that the issuer must redeem for a fixed amount of monetary value and represents will keep a stable value.
Key elements
- Permitted issuers only: it is unlawful for anyone other than a permitted payment stablecoin issuer to issue a payment stablecoin in the United States.
- Reserves: identifiable reserves on an at least 1 to 1 basis, in assets such as US coins and currency, Federal Reserve balances and demand deposits; the monthly reserve composition must be published on the issuer’s website, and reserves may not be rehypothecated except in narrow cases.
- No yield: issuers may not pay holders any form of interest or yield solely for holding, using or retaining the stablecoin.
- State option: issuers with no more than USD 10 billion outstanding may opt for a substantially similar state-level regime.
- Not securities: payment stablecoins issued by permitted issuers are excluded from the definition of “security” in, among others, the Investment Advisers Act and the Investment Company Act.
Implementation timeline
Federal and state regulators and the Treasury must issue implementing regulations within one year of enactment, that is by 18 July 2026. The Act takes effect on the earlier of 18 months after enactment (18 January 2027) or 120 days after the primary federal regulators issue final implementing regulations. From three years after enactment (18 July 2028), digital asset service providers may not offer or sell to persons in the US a payment stablecoin that is not issued by a permitted issuer, subject to the Act’s exceptions.
Can a stablecoin pay interest under the GENIUS Act?
Not from the issuer: the ban covers interest or yield in cash, tokens or other consideration paid solely for holding, using or retaining the stablecoin.
Does it reach issuers outside the US?
Yes, where their stablecoins are offered in the US. A digital asset service provider may make a foreign issuer’s payment stablecoin available in the US only if the issuer has the technological capability to comply, and will comply, with any lawful order and any reciprocal arrangement under section 18 of the Act.
Related: Stablecoin, MiCA, Stablecoin De-peg Event.