GENIUS Act Signed into Law, Establishing Federal Stablecoin Payment Regulation, USA, July 2025

On July 18, 2025, President Donald J. Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) into law. The GENIUS Act is federal legislation that establishes, for the first time, a comprehensive national regulatory framework for payment stablecoins — digital assets denominated in U.S. dollars and designed for payment or settlement purposes. The Act had passed the Senate Banking Committee in March 2025 with bipartisan support and passed the full Senate on June 17, 2025, before the House advanced it on July 17, 2025.

The GENIUS Act governs "payment stablecoins" — a defined category of digital assets issued by permitted stablecoin issuers, redeemable on demand at par for U.S. dollars, and backed by high-quality liquid assets. The Act establishes a dual regulatory regime: federally chartered banks and their affiliates may issue payment stablecoins under federal supervision, while non-bank issuers may apply for a federal payment stablecoin issuer license. The Act also creates a path for state-licensed issuers operating within states that have enacted GENIUS Act-compliant state frameworks. Reserve requirements, disclosure obligations, and prohibition on algorithmic stablecoins are among the Act's key substantive provisions.

Stablecoin issuers, digital payment processors, custodial wallet providers, crypto exchanges, and fintech companies that hold, transmit, or facilitate transactions in U.S. dollar-pegged stablecoins must determine whether their instruments qualify as "payment stablecoins" under the Act's definition and, if so, must apply for the appropriate federal or state license. Entities that currently issue algorithmic stablecoins — those that maintain their peg through on-chain mechanisms rather than fiat reserves — face prohibition under the Act. Foreign stablecoin issuers offering services to U.S. persons must comply with rules to be promulgated by the federal banking regulators implementing the Act.

Federal implementing regulations have not yet been finalized. The Act requires federal banking agencies to issue implementing rules within specified timeframes post-enactment; those rules will govern reserve composition, audit requirements, and licensing procedures in detail. States seeking to maintain their own stablecoin licensing regimes must enact legislation that meets federal equivalency standards. The CFTC separately updated its definition of "payment stablecoin" in Staff Letter 25-40 (reissued February 6, 2026), which continues to govern CFTC-regulated entities pending further congressional or regulatory action on digital asset market structure.

Our firm advises on stablecoin regulatory compliance, digital asset licensing, and payment system law, and maintains a dedicated partnership network for crypto firms operating in the U.S. federal and state regulatory environment. We welcome inquiries from stablecoin issuers, exchanges, and payment processors assessing their obligations under the GENIUS Act. Examples of work we handle include: stablecoin issuer licensing, reserve asset structuring, GENIUS Act compliance program design, algorithmic stablecoin wind-down counsel, and cross-border digital asset regulatory analysis.

Source: U.S. Senate Committee on Banking, Housing, and Urban Affairs, "Chairman Scott: President Trump's Signature on GENIUS Act Delivers for the American People," July 18, 2025. https://www.banking.senate.gov/newsroom/majority/chairman-scott-president-trumps-signature-on-genius-act-delivers-for-the-american-people. Confirmed April 16, 2026.

The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.