What is the GENIUS Act? US stablecoin law explained

The GENIUS Act is the United States' federal law for payment stablecoins — digital tokens designed to be redeemable one-for-one for US dollars. Its full name is the Guiding and Establishing National Innovation for U.S. Stablecoins Act. President Donald Trump signed it on July 18, 2025, after it passed the Senate in June and the House of Representatives in July. It is the first major federal crypto law in the US, and it changes who can issue a dollar stablecoin, what has to back it and how holders are protected.

If you are new to the topic, start with what a stablecoin is — this guide focuses on the rules.

What problem the law solves

Before GENIUS, stablecoin issuers in the US worked under a patchwork of state money-transmitter licences and trust charters. Reserve reporting varied from monthly attestations to almost nothing, and holders had no clear legal claim if an issuer collapsed. The 2022 crash of the algorithmic stablecoin TerraUSD (UST) showed how fast an under-backed "stable" token can fail. GENIUS sets one national standard for the tokens most people actually use for trading and payments.

Who can issue a payment stablecoin

Under the law, only a permitted payment stablecoin issuer may issue a payment stablecoin in the US. There are three routes:

• Bank subsidiaries — subsidiaries of insured banks and credit unions, supervised by their usual federal regulator.
• Federal qualified issuers — non-bank companies approved and supervised at the federal level by the Office of the Comptroller of the Currency (OCC).
• State qualified issuers — companies licensed by a state whose regime is certified as substantially similar to the federal one. This route is meant for smaller issuers (roughly up to $10 billion in circulation); larger ones move to federal oversight.

Foreign issuers, such as companies based outside the US, can only have their tokens offered to Americans if they meet comparable standards. Over time, US exchanges and other service providers will be barred from offering stablecoins that don't come from a permitted or qualifying foreign issuer.

The reserve rules

The heart of the law is backing. Every token in circulation must be matched at least one-for-one by high-quality, liquid assets — essentially US dollars in cash or bank deposits, short-term US Treasury bills, repurchase agreements backed by Treasuries and government money-market funds. Issuers cannot lend those reserves out or reuse them, except in narrow cases such as meeting redemptions.

Issuers must publish the size and make-up of their reserves every month, have the reports examined by an accounting firm and have senior executives certify them. The largest issuers also face annual audited financial statements.

Redemption, yield and holder protection

• Redemption: holders must be able to redeem for dollars on clear, published terms. The OCC's final rule says redemptions should generally be paid within two business days — see our report on the OCC's GENIUS Act rule.
• No interest: issuers may not pay holders interest or yield just for holding, using or keeping a stablecoin. Whether exchanges and partners can still offer "rewards" is one of the most contested points in the rule-writing — as the Blockchain Association's comments to Treasury show.
• Priority in failure: if an issuer goes bankrupt, stablecoin holders' claims on the reserves come before other creditors.
• Not a security: a payment stablecoin from a permitted issuer is not treated as a security or a commodity under federal law, so it falls under banking-style rather than securities supervision.
• Law enforcement: issuers must be able to freeze or block tokens when required by a lawful order and must run anti-money-laundering and sanctions programmes.

GENIUS Act vs MiCA

Europe regulates stablecoins through MiCA (read what MiCA is). The goals overlap, but the details differ:

Timeline and what's still pending

The law takes effect on January 18, 2027, 18 months after signing. Before then, regulators must write the detailed rules. On October 21, 2026, the OCC became the first to publish a final rule covering reserves, redemptions, risk management and custody for the issuers it supervises. Treasury is finalising its rule on who may issue, offer and sell stablecoins, and Treasury's FinCEN and OFAC are writing separate anti-money-laundering and sanctions rules. Regulators have already missed an earlier July 2026 deadline, so further delays to pieces of the framework are possible.

What it means for you

For most users, little changes on day one: you will still buy and hold USDC, USDT or other dollar tokens through exchanges and wallets. What changes is the safety net behind them — clearer reserve rules, regular disclosures and a legal claim on the reserves. It does not make stablecoins bank deposits: they are not covered by deposit insurance, and an issuer can still freeze tokens linked to illegal activity. As always, check who issues a token and where you keep it; our guide on how to store crypto safely explains the options.