🇺🇸 United States · Key Regulation
GENIUS Act
The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act is the first comprehensive federal framework governing payment stablecoins in the United States.
In this briefing
- What it is
- What does the GENIUS Act do?
- Key things to know
Before the GENIUS Act, stablecoin issuers operated under a fragmented combination of state money transmission laws, banking regulation and regulatory guidance, with no single federal framework governing issuance. The Act establishes a dedicated regime for permitted payment stablecoin issuers, introducing authorisation, prudential, governance and financial crime requirements while providing greater regulatory certainty for issuers, financial institutions and the wider digital asset market.
What does the GENIUS Act do?
Creates a Federal Stablecoin Framework
Introduces the first comprehensive federal regulatory framework for payment stablecoins, replacing the previous fragmented approach across federal and state regimes.
Establishes Authorisation Pathways
Creates different licensing and supervisory routes depending on the type of issuer, including banks, subsidiaries of insured depository institutions, qualifying non-bank issuers, state-qualified issuers and certain foreign issuers.
Introduces Reserve & Redemption Requirements
Requires payment stablecoins to be fully backed by eligible reserve assets and redeemable at par, together with requirements covering custody, reserve management and public disclosures.
Sets Prudential & Governance Standards
Introduces requirements covering governance, risk management, operational resilience, financial resources, record keeping and ongoing regulatory oversight.
Requires AML & Sanctions Compliance
Requires issuers to maintain Bank Secrecy Act and sanctions compliance programmes, including customer due diligence, transaction monitoring, suspicious activity reporting and the ability to comply with lawful freeze and seizure orders.
Enables Regulated Market Growth
Creates greater regulatory certainty for financial institutions, payment providers and technology firms looking to issue, integrate or build services around regulated payment stablecoins.
Key things to know
The Act only applies to payment stablecoins
The GENIUS Act regulates permitted payment stablecoins. Other digital assets and certain categories of stablecoins may remain subject to different regulatory frameworks.
The authorisation route depends on the issuer
The applicable regulator and approval process depends on the type of institution issuing the stablecoin, making regulatory perimeter analysis an important first step.
State regulation remains relevant
The Act does not eliminate state regulation. Certain issuers may continue operating under qualifying state regimes where they satisfy the statutory requirements.
Stablecoin issuers are expected to operate like regulated financial institutions
Issuers must demonstrate governance, reserve management, redemption processes, operational controls and compliance frameworks consistent with institutional regulatory expectations.
AML and sanctions are embedded into the regime
Financial crime compliance is a core part of the framework rather than an additional requirement, with issuers expected to build AML/CFT and sanctions controls into their operating model from the outset.
The framework will continue to develop
The Act establishes the legislative framework, but practical implementation will continue through Treasury, OCC, FDIC, FinCEN and OFAC rules, guidance and supervisory expectations.
For general information only. Not legal, regulatory or compliance advice.
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