GENIUS Act Signed Into Law
- Resources
- News & Regulatory Updates
Regulatory Update: GENIUS Act Signed Into Law
The GENIUS Act—signed into law on July 18, 2025—establishes the first comprehensive federal framework governing U.S. payment stablecoins, reshaping how digital assets operate across the financial and blockchain ecosystem.
Top 5 Key Takeaways:
1. Only Licensed Entities Can Issue Stablecoins
The Act restricts stablecoin issuance to permitted payment stablecoin issuers—federally supervised nonbank issuers, qualified bank subsidiaries, or certified state‑regulated issuers. Issuing or marketing stablecoins without PPSI status is unlawful.
2. 1:1 Reserves in High‑Quality Liquid Assets Are Mandatory
PPSIs must maintain fully identifiable, 1:1 reserve backing using only tightly defined, low‑risk assets such as U.S. cash, short‑term Treasuries, and certain money‑market funds. This ensures stability and prevents speculative use of reserves.
3. Strong Transparency, Redemption, and AML Requirements
Issuers must publish monthly reserve reports, maintain clear redemption policies, and implement robust AML/BSA compliance programs with readiness to respond to lawful orders—creating new operational expectations for digital asset firms.
4. Stablecoins Are Not Securities Under GENIUS (If Compliant)
Compliant payment stablecoins are explicitly not treated as securities, reducing a major regulatory risk for token issuers and enabling compliant growth in U.S. digital dollar markets.
5. Foreign Issuers Face New Barriers to U.S. Access
Foreign stablecoin issuers can only serve U.S. customers through approved digital asset service providers—and only if their home regime is deemed regulatory‑comparable by the U.S. Treasury. This raises new legal and operational hurdles for cross‑border projects.
Contact Us
+1 202-854-0515
info@lawvisory.com
1250 Connecticut Ave NW #700, Washington, DC 20036