GENIUS Act
GENIUS Act (S.394, signed July 18, 2025)
OCC · Federal Reserve · FinCEN
July 18, 2025
Overview
The law that defined payment stablecoins
The big picture: The GENIUS Act is the first federal law to define what a payment stablecoin is, who can issue one, and what reserves must back it.
- Dual regime — issuers above $10B in market cap require federal approval; those below may operate under state licenses with a federal floor
- Securities carve-out — compliant payment stablecoins are explicitly not securities, not commodities, and not investment company shares
- 1:1 reserves — every token must be backed by specified high-quality liquid assets, attested monthly
- Redemption at par — holders can redeem at face value within one business day
Why it matters: Before GENIUS, stablecoin issuers operated under a patchwork of state money transmitter licenses with no federal standard. Classification was uncertain, reserves were unregulated, and redemption terms varied by issuer.
Timeline
From bill to law
December 2022
Sen. Bill Hagerty introduces the first draft of a federal stablecoin bill in the 117th Congress.
February 2025
S.394 introduced with bipartisan co-sponsors. Formally titled the Guiding and Establishing National Innovation for U.S. Stablecoins Act.
May 2025
Senate passes the GENIUS Act 63–37, with notable crossover votes.
June 2025
House passes the companion bill 292–132 after reconciliation.
July 18, 2025
President signs the GENIUS Act into law. Federal stablecoin regulation begins.
January 2026
OCC begins accepting applications for national trust bank charters under the new framework.
July 2026
Full compliance deadline. All existing issuers must be operating under an approved federal or state path.
Reserve Requirements
Permitted reserve assets
The big picture: The GENIUS Act specifies exactly which assets may back a payment stablecoin. No discretion, no creative allocation — only high-quality liquid assets.
U.S. coins and currency
Physical cash and Federal Reserve notes held in segregated custody.
Insured demand deposits
Deposits at FDIC-insured institutions, within the insurance coverage limits.
T-bills (93-day maturity)
U.S. Treasury bills maturing within 93 days of acquisition.
Treasury-backed repos
Repurchase agreements fully collateralized by U.S. Treasury securities.
Government MMF shares
Shares in Rule 2a-7 government money market funds investing exclusively in Treasuries.
Between the lines: Reserve assets must be segregated from the issuer's operating capital and held in accounts clearly identified as belonging to stablecoin holders. Attestation is required monthly by a registered CPA. Issuers above $50B in circulation must also submit to a full annual audit.
Dual Regulatory Regime
Federal path vs. state path
The big picture: The GENIUS Act creates a two-tier system split at the $10B market cap threshold. Both paths lead to the same consumer protections — but through different regulators.
Federal Path
Above $10B market cap
- Charter: OCC national trust bank charter or Federal Reserve approval required
- Supervision: Prudential standards set by the primary federal regulator
- Systemic risk: Issuers above $25B subject to enhanced monitoring by the Financial Stability Oversight Council
- Examination: Regular on-site and off-site examination by the OCC or Fed
State Path
Below $10B market cap
- License: State money transmitter license (or equivalent) remains the primary authorization
- Federal floor: Must meet all GENIUS Act requirements as a minimum standard
- State overlay: States may impose additional requirements above the federal floor
- Review: Annual federal compliance review to ensure the state regime meets the floor
Why it matters: The dual regime preserves state innovation (New York's BitLicense, Wyoming's SPDI charter) while ensuring no issuer falls below the federal standard. An issuer that crosses the $10B threshold has 180 days to transition to federal oversight.
What Changed
Before and after GENIUS
The big picture: The GENIUS Act replaced ambiguity with specificity across six critical dimensions.
Classification
Before
Uncertain — SEC, CFTC, and state regulators all asserted overlapping jurisdiction
After
Explicit carve-out from securities, commodities, and investment company classification
Reserves
Before
No federal standard — issuers self-reported reserve composition with varying rigor
After
1:1 backing with five specified asset types, monthly CPA attestation
Redemption
Before
Varied by issuer — some offered same-day, others imposed delays or minimum amounts
After
At par within one business day, mandatory for all holders
AML / KYC
Before
Applied inconsistently — some issuers registered as MSBs, others did not
After
Full Bank Secrecy Act compliance mandatory for all issuers
Travel Rule
Before
Threshold and applicability debated across jurisdictions
After
$3,000 threshold formalized for all stablecoin transfers
State vs. Federal
Before
Patchwork of 50+ state regimes with no coordination or minimum standard
After
Dual regime with federal floor — states may exceed but not undercut
Explore
Continue mapping
What's next: The GENIUS Act is one piece of the U.S. stablecoin landscape. State-level licensing, OCC charter applications, and ongoing rulemaking continue to shape the regulatory environment.