How the GENIUS Act Transforms Stablecoin & Crypto Regulation in the U.S.

The GENIUS Act represents a major inflection point in U.S. policy on digital assets by establishing a comprehensive federal regime for “payment stablecoins.” Prior to this, stablecoins operated largely in a gray-zone — neither securities nor classically regulated payments — with uncertainty around who could issue them and under what conditions. This law provides clarity, defining those entities that may issue payment stablecoins (“permitted payment stablecoin issuers” or PPSIs), specifying reserve requirements and disclosure obligations, and clearly separating other entities from issuance rights [2][4].

Issuers must back every stablecoin 1:1 with acceptable liquid assets — principally U.S. currency, insured bank or credit union deposits, and short‐term Treasuries — and must provide monthly transparency into reserve composition. Large issuers (issuance over $50 billion) must provide audited annual financials. Issuers are forbidden from paying interest or yield on stablecoins, or requiring customers to purchase additional products (“tying”), strengthening consumer protection and reducing asset class risk [3][4].

Regulatory oversight will depend on the size and type of issuer. Entities below $10 billion in outstanding issuance may be regulated by states, provided states obtain certification from the SCRC and their regimes are “substantially similar” to the federal framework. Above that threshold, PPSIs must shift to federal oversight, generally under the OCC for non-banks or the appropriate banking regulator for bank subsidiaries. The law also creates a Stablecoin Certification Review Committee (SCRC), chaired by the Treasury Secretary and including chairs of the FDIC and Fed, which approves state regimes, non-bank applicants, and foreign issuer eligibility.

Strategically, the Act solidifies the position of U.S. stablecoin issuers, supports onshore growth, enhances investor confidence, and can stimulate adoption by reducing regulatory uncertainty. However, risks stem from implementation delays, regulatory arbitrage, and pressure from foreign jurisdictions. Questions remain around how quickly regulators will finalize rules, how state regimes will align, whether foreign stablecoins will comply or be restricted, and how systems will monitor reserve integrity and avoid abuse.