What Is the GENIUS Act? US Stablecoin Law Explained

For years the honest answer to "is a stablecoin regulated in the United States" was that it depended on who you asked. That ended on 18 July 2025, when the GENIUS Act was signed into law.

What followed was quieter and more consequential. Through 2026 the regulators have been writing the rules that make the law operational. The Office of the Comptroller of the Currency proposed its regulations in March, the FDIC followed in April, and on 21 August 2026 Treasury published its proposed rule on stablecoin issuance, offer, and sale, opening a comment period that runs to mid-October.

The framework is now specific enough to plan against. Here is what it requires, who enforces it, and what the deadlines mean depending on whether you issue stablecoins or simply use them.

The GENIUS Act is the US federal law governing payment stablecoins. It defines what a payment stablecoin is, establishes who may issue one, and sets the reserve, disclosure, and supervision requirements that issuers must meet.

Before it, stablecoin issuers operated under a patchwork of state money transmitter licences and general financial regulation, with no single federal standard for what backed a token or who checked. The Act replaces that with one federal perimeter and a defined route to permission.

The core idea is narrow. A payment stablecoin is treated as a payment instrument rather than an investment product, and the entity issuing it takes on obligations closer to those of a regulated financial institution than a technology company.

The yield prohibition is the provision that changes business models most. An issuer earns on the reserves but cannot pass that return to holders as interest simply for holding the token. Products that pay a return have to sit outside the payment stablecoin definition and be structured differently.

Also Read: How yield-bearing stablecoins work

Supervision is split between federal banking regulators and the states, and which one applies depends on how the issuer is structured.

The Office of the Comptroller of the Currency is the primary federal regulator for most permitted issuers, including federally licensed non-bank issuers and subsidiaries of national banks. The Federal Reserve, the FDIC, and the National Credit Union Administration each have rulemaking responsibilities for institutions they supervise. Treasury sets the overarching rules on issuance and on how state regimes qualify.

State regulators retain primary supervision of state-qualified issuers, but only up to a point. An issuer that grows past $10 billion in outstanding stablecoins has to transition to federal oversight.

This is a banking-style supervisory structure rather than a markets one. Payment stablecoins under this Act are not overseen as commodities or securities, and the regulators involved are the ones that examine deposit-taking institutions.

An entity can become a permitted payment stablecoin issuer in one of three ways, and the route determines who supervises it.

• A subsidiary of an insured depository institution. A bank or credit union issues through a subsidiary, supervised by that institution's existing federal regulator.
• A federal qualified non-bank issuer. A non-bank applies to the OCC directly. This is the route for a payments or technology company with no banking charter.
• A state qualified issuer. A company is approved under a state regime that Treasury has certified as substantially similar to the federal standard, until it crosses $10 billion in outstanding stablecoins.

Foreign issuers have a separate path that depends on their home regulator meeting a comparability test and on the issuer being able to comply with US lawful orders.

The comment period is open now, which is the window for anyone with an operational view of how these rules land to say so.

Most companies reading this are not issuers. They are wallets, exchanges, payment platforms, payroll providers, and apps that hold or move stablecoins for users. The Act still reaches them, through the 2028 date.

From 18 July 2028, a digital asset service provider cannot offer a payment stablecoin to a US person unless that stablecoin comes from a permitted issuer. The obligation attaches to distribution, not just issuance.

Three practical consequences follow.

Your asset list becomes a compliance decision. Every stablecoin you support needs a permitted issuer behind it by that date, or it comes off the list for US users. That is a product roadmap item, not a legal footnote.

Your provider's permissions become your exposure. If you rely on a partner for the crypto leg of your flows, the question of which entity holds which permission is now something to have in writing.

Yield-bearing products need re-examining. If any part of your proposition passes a return to users for holding a stablecoin, check whether the instrument still fits the payment stablecoin definition.

Also Read: How Transak abstracts the messy middle of stablecoin payments

Regulated stablecoins address the friction that has kept dollar payments slow and expensive. A cross-border transfer through correspondent banking can take two or three days and lose several percent to fees and spread along the way. A stablecoin transfer settles in minutes, at any hour, without a chain of intermediary banks.

Until now the barrier was rarely the technology. It was that a regulated institution could not get comfortable with an instrument nobody could tell them the rules for. A defined federal framework removes that objection, which is why banks and payment companies that stayed out have started building.

There is a second effect on dollar reach. Almost all stablecoin value is denominated in US dollars, and full reserve backing means growth in stablecoins translates into demand for short-dated Treasuries. It also extends dollar access into markets where holding a dollar account is difficult, which is where a large share of real stablecoin usage already sits.

Also Read: How apps embed crypto and stablecoin payments

It does not make every stablecoin compliant. Tokens whose issuers do not obtain permission remain outside the framework, and after July 2028 they cannot be offered to US persons by regulated service providers.

It does not remove the rest of your compliance obligations. Identity verification, sanctions screening, and transaction monitoring apply as they did before.

It does not settle everything at the state level. Treasury is still working through how state regimes qualify as substantially similar to the federal standard, and the detail matters for smaller issuers.

It also does not cover tokenized deposits, yield-bearing instruments, or the wider digital asset market structure. Those sit under separate rules and separate legislative work.

The GENIUS Act moved stablecoins from a regulatory grey area to a defined federal perimeter. The framework is real, the rules are being written now, and the deadlines are close enough to plan against rather than watch.

Do one thing this month. List every stablecoin your product supports for US users and write down who issues each one and what permission they hold or are seeking. If any row is blank, that is your July 2028 problem, and it is much cheaper to solve in 2026.

The GENIUS Act is the US federal law for payment stablecoins, signed on 18 July 2025. It requires issuers to hold full reserves in high-quality liquid assets, publish monthly reserve reports examined by an accounting firm, obtain a licence, and refrain from paying yield to holders.

The law is already in force, and the operational deadlines are approaching. Payment stablecoin issuers need a federal or state licence from 18 January 2027. From 18 July 2028, digital asset service providers cannot offer unlicensed payment stablecoins to US persons.

The Office of the Comptroller of the Currency is the primary federal regulator for most permitted issuers, with the Federal Reserve, FDIC, and National Credit Union Administration holding rulemaking roles. State regulators supervise state-qualified issuers, though those above $10 billion in outstanding stablecoins must move to federal oversight.

No. The Act prohibits payment stablecoin issuers from paying holders any interest or yield in connection with holding the stablecoin. Products that pass a return to holders have to be structured outside the payment stablecoin definition and are governed by different rules.

Reserves must equal at least the par value of outstanding stablecoins and be held in high-quality liquid assets, with Treasury securities limited to a maximum maturity of 93 days. Reserve composition must be published monthly and examined by a registered public accounting firm.

Yes, through the distribution rule. From 18 July 2028, a digital asset service provider cannot offer a payment stablecoin to a US person unless it comes from a permitted issuer. Wallets, exchanges, and payment platforms therefore need to know who issues every stablecoin they support.

No, and the approaches are opposites. A central bank digital currency would be issued by the central bank itself. The GENIUS Act creates a framework for private companies to issue dollar-backed stablecoins under federal or state supervision, leaving issuance with the private sector.

They fall outside the framework. After 18 July 2028, regulated digital asset service providers cannot offer them to US persons, which in practice means US distribution narrows sharply even if the token continues to exist and trade elsewhere.