The GENIUS Act: What the US Stablecoin Law Requires

What the GENIUS Act is

The Guiding and Establishing National Innovation for U.S. Stablecoins Act is a federal statute that makes it unlawful for anyone other than a licensed issuer to issue a "payment stablecoin" in the United States, and sets reserve, disclosure, redemption and conduct rules for the issuers that are licensed.

The bill, S. 1582, passed the Senate in June 2025 and the House on 17 July 2025, and was signed the next day. It defines a payment stablecoin as a digital asset designed to be used for payment or settlement whose issuer is obliged to redeem it for a fixed amount of "monetary value" and creates a reasonable expectation that it will hold a stable value. "Monetary value" means a national currency or a deposit denominated in one, so the definition is not limited to dollars.

Three exclusions matter. A payment stablecoin is not a national currency, not a bank deposit (including a deposit recorded on a blockchain) and not a security. The Act also amends the Securities Act of 1933 and the Securities Exchange Act of 1934 so that a payment stablecoin from a permitted issuer is expressly not a security. The deposit carve-out is why bank "deposit tokens" sit outside this regime; see tokenised deposits vs stablecoins.

Who may issue: three licensing routes

Issuance is limited to "permitted payment stablecoin issuers": subsidiaries of insured banks and credit unions approved by their regulator, federally qualified non-bank issuers supervised by the OCC, and state-qualified issuers, which may stay under a state regime only while their outstanding issuance is $10 billion or less.

• Bank and credit-union subsidiaries are approved and supervised by the subsidiary's own federal regulator: the Federal Reserve, FDIC, OCC or NCUA.
• Federal qualified issuers are non-bank entities licensed and supervised by the Office of the Comptroller of the Currency.
• State qualified issuers are licensed under a state regime that a federal committee certifies as "substantially similar". Once a state issuer's stablecoin passes $10 billion outstanding, it has 360 days to move under federal supervision or must stop issuing new coins until it falls back below the threshold, unless the federal regulator grants a waiver.

Foreign issuers are handled separately. US digital asset service providers may only make a foreign-issued stablecoin available if the issuer can, and will, comply with lawful US orders, and section 18 lets Treasury recognise foreign regimes as comparable.

Reserves: what backs each coin

Every permitted issuer must hold identifiable reserves of at least one dollar for each coin outstanding, limited to cash, central-bank balances, demand deposits, Treasury bills of 93 days or less, overnight repo against such bills, and government money market funds holding only those assets.

The full list in section 4(a) is short:

Permitted reserve asset	Condition
US coins and currency, Federal Reserve balances	None
Demand deposits at insured banks	Subject to FDIC/NCUA limits
Treasury bills, notes or bonds	Remaining or original maturity of 93 days or less
Repo (issuer as seller)	Overnight, backed by bills of 93 days or less
Reverse repo (issuer as buyer)	Overnight, overcollateralised, tri-party, centrally cleared or with a strong counterparty
Registered government money market funds	Invested only in the assets above
Other similarly liquid federal assets	Only if the regulator approves
Tokenised versions of the above	Must comply with applicable law

Reserves may not be pledged, rehypothecated or reused, with narrow exceptions for margin on repo, custody, and selling bills under short repo to meet redemptions. Corporate bonds, gold, bitcoin and secured loans are not on the list. That matters for comparison: Tether's June 2026 attestation lists gold and bitcoin among USDT's reserves, which a US-licensed issuer could not count. (How reserves keep a coin at $1 is covered in how stablecoins hold their value.)

Redemption, disclosure and audits

Issuers must publish a redemption policy with clear procedures for timely redemption and every fee, post the size and composition of their reserves monthly, have that report examined monthly by a registered public accounting firm, and have the CEO and CFO certify it to their regulator under criminal penalty.

• Redemption policy. Public, with "clear and conspicuous procedures for timely redemption". Only a regulator, not the issuer, may impose discretionary limits on redemptions. Fees must be disclosed in plain language and can change only with at least seven days' notice.
• Monthly reserve report. Total coins outstanding plus the amount and composition of reserves, including average tenor and the geographic location of custody for each category, posted on the issuer's website.
• Monthly examination and certification. A registered public accounting firm examines each monthly report; the CEO and CFO certify its accuracy, and a knowingly false certification carries the same criminal penalties as a false Sarbanes-Oxley certification.
• Annual audit for the largest issuers. An issuer with more than $50 billion outstanding that is not already an SEC reporting company must publish audited annual financial statements, including related-party transactions.

Holders also gain a legal position they lacked before. In an issuer's insolvency, stablecoin holders' claims on the required reserves have priority over all other creditors, ratably among holders. That is not deposit insurance: in March 2026 FDIC Chairman Travis Hill said payment stablecoins are not eligible for pass-through insurance, and the Act forbids marketing a stablecoin as federally insured, as legal tender or as guaranteed by the US government.

The interest ban and other prohibitions

No permitted or foreign issuer may pay holders "any form of interest or yield", in cash, tokens or anything else, solely for holding, using or retaining a payment stablecoin. The ban binds issuers; whether it should also reach exchanges and affiliates that pay rewards is still argued over.

The Bank Policy Institute, which lobbies for banks, has argued the gap is large, noting that Coinbase was paying 4.1% on USDC kept on its exchange. Banks care because an interest-paying stablecoin competes directly with deposits; the Treasury Borrowing Advisory Committee's April 2025 presentation identified transactional deposits as the type most "at risk" from stablecoin growth. For where stablecoin yield really comes from, see stablecoin yield explained; lending a stablecoin out on a DeFi market is a separate activity with its own risks, covered in DeFi lending platforms.

Other conduct rules: issuers need anti-money-laundering and sanctions programmes, including the technical ability to block, freeze and reject impermissible transactions, and must comply with lawful orders to seize, freeze or burn coins. Names suggesting US government backing ("United States", "USG") are banned, though currency abbreviations such as "USD" are allowed.

Implementation timeline as of October 2026

The statutory one-year rulemaking deadline of 18 July 2026 passed with only proposals published. As of 2 October 2026 the Federal Register shows proposed rules from the OCC, FDIC, NCUA, Federal Reserve, Treasury and FinCEN, plus one procedural interim final rule, and no final rule from a primary federal regulator.

Date	Event
18 Jul 2025	Signed into law (Public Law 119-27)
2 Mar 2026	OCC proposed rule for issuers under its jurisdiction
10 Apr 2026	FDIC proposed rule; FinCEN/OFAC proposed AML and sanctions programme rule
18 May 2026	NCUA proposed rule
18 Jul 2026	Statutory deadline for final rules (missed)
18 Aug 2026	Treasury proposed rule on issuance, offer and sale (section 3)
29 Sep 2026	Federal Reserve proposed rules for Board-supervised issuers
30 Sep 2026	Treasury interim final rule: procedures for reviewing state regimes
18 Jan 2027	Act takes effect (18 months after enactment)
18 Jul 2028	Platforms barred from offering non-permitted stablecoins to US persons

The effective-date arithmetic is simple. The Act takes effect on the earlier of 18 January 2027 or 120 days after final regulations. Any final rule issued after 20 September 2026 lands after 18 January, so the January date now governs. The 30 September interim final rule covers forms and procedures for the Stablecoin Certification Review Committee's review of state regimes; it does not license anyone.

What it means for USDC, EURC and Stellar

For USDC holders, the Act turns practices Circle already follows, such as monthly reserve reports and a money-fund-heavy reserve, into legal obligations with criminal penalties. EURC is issued in the EU under MiCA. On Stellar, the rules attach to issuers and US service providers, not to the network.

USDC. Circle's transparency page describes USDC reserves as held in the Circle Reserve Fund, an SEC-registered government money market fund managed by BlackRock, plus cash at banks, with monthly assurance from a Big Four accounting firm. That structure is close to the Act's permitted list. On 10 July 2026 the OCC granted final approval for Circle's national trust bank, Circle National Trust; Circle says it will provide custody and is designed to enable future management of the USDC reserve, while USDC itself continues to be issued by other regulated Circle affiliates.

EURC. Circle's euro coin is issued under the EU's MiCA regime, for which Circle received a French electronic money institution licence on 1 July 2024. Whether US platforms can offer it after July 2028 turns on the Act's foreign-issuer provisions and Treasury's section 3 rules, which were still at proposal stage in October 2026.

Stellar. USDC and EURC on Stellar are issued by Circle and backed by the same reserves as on other chains; the ledger they move on does not change their legal status. Stellar's issuer controls, with flags that let an issuer require approval, freeze a trustline or claw back tokens, give issuers on the network a native way to meet freeze-and-burn orders. Wallets and anchors that serve US users are the "digital asset service providers" that the 2028 offer-and-sale rule targets. For the coins available on the network, see stablecoins on Stellar.

The takeaway

The GENIUS Act's core is narrow and strict: short, liquid reserves held 1:1, monthly public reporting checked by accountants, a priority claim in insolvency and no interest from the issuer. What it does not do is insure holders, regulate the chains, or settle whether third parties may pay rewards. The rules that make it operational are still proposals, and 18 January 2027 is the date to watch.

Sources: GENIUS Act, Public Law 119-27 (govinfo.gov text and legislative history); Federal Register documents 2026-04089, 2026-06974, 2026-06963, 2026-09915, 2026-16796, 2026-19860 and 2026-19966; Orrick summary of FDIC Chairman Hill's remarks (11 March 2026); Circle transparency page and press release (10 July 2026); CNBC (1 July 2024); Bank Policy Institute; Treasury Borrowing Advisory Committee presentation (30 April 2025); Stellar developer docs (asset controls).