GENIUS Act Turns Stablecoin Licensing Into a Board-Level Bet

The GENIUS Act, enacted on July 18, 2025, created the first comprehensive U.S. federal framework for payment stablecoins. It generally limits issuance in the United States to federally or state-qualified entities and extends obligations to exchanges, custodians and other digital asset service providers. The framework matters because it will determine how dollar-linked tokens, including those issued offshore, can be created, marketed and sold to U.S. customers.

The Treasury Department published a proposed rule on Aug. 18, 2026, defining terms including “issue,” “offer or sell” and “located in the United States,” with extraterritorial reach when transactions involve people in the country. Foreign issuers could qualify if their home regime is deemed comparable and they register with the Office of the Comptroller of the Currency. Comments are due Oct. 19; knowing participation in unlawful issuance can carry fines of up to $1 million per violation and as much as five years in prison.

The GENIUS Act creates a federal framework for payment stablecoins, setting standards for reserve backing, disclosures and regulatory oversight. Signed by President Donald Trump, the law is intended to give banks and nonbank issuers a clearer route to offering dollar-linked tokens. The Office of the Comptroller of the Currency is responsible for translating key provisions into detailed licensing, operating and risk-management requirements.

The OCC is accelerating its rulemaking and has pledged to issue final GENIUS Act regulations by November 2026. Applications from prospective stablecoin issuers are expected to begin in 2027, making the timetable important for firms preparing to enter the new federal regime. The final rules will determine how issuers qualify, demonstrate reserve compliance and operate under ongoing supervision.

Stablecoins typically maintain their value through assets denominated in U.S. dollars and have become an important dollar channel for crypto trading and cross-border payments. The United States signed the GENIUS Act into law on July 18, 2025, establishing a federal issuance framework for the first time. It requires every $1 token to be backed by at least $1 in eligible reserve assets. Stablecoins, however, are not bank deposits and are not covered by FDIC deposit insurance.

The FDIC board approved a proposed rule on April 7, 2026, and published it in the Federal Register on April 10. The proposal would require issuers under its supervision to meet standards covering reserve assets, redemption within two business days, capital, risk management and custody. The OCC issued its own proposal on February 25, followed by customer identification rules proposed by five federal agencies on June 18. Final rules had yet to be issued by the July 18 statutory deadline.

The GENIUS Act, signed by US President Donald Trump in July 2025, established a dual federal-state regulatory framework for payment stablecoins. It allows issuers with a market capitalization of no more than $10 billion to be regulated at the state level when state laws are broadly comparable to federal standards, making the provision critical to states’ supervisory role and the compliance options available to small and midsize operators.

On June 16, 2026, a bipartisan group of seven senators led by Cynthia Lummis sent a letter to US Treasury Secretary Scott Bessent urging the department to maintain flexibility in state certification and prevent the process from becoming a one-time window. The Treasury sought public comment in April, with submissions closing on June 2. According to CoinGecko data, only Tether, USDC and USDS exceed $10 billion in market value, leaving all other stablecoins potentially eligible for state-level oversight.

U.S. President Donald Trump signed the GENIUS Act into law on July 18, 2025, creating the first federal framework for payment stablecoins, with requirements covering reserves, redemptions and anti-money-laundering controls. The law also preserves a state regulatory pathway. Issuers with aggregate circulation of no more than $10 billion may opt for state oversight if the state regime is substantially similar to the federal framework and receives approval from the Stablecoin Certification Review Committee.

The U.S. Treasury Department proposed its first implementing rules on April 1, 2026, setting out principles for assessing whether state regimes are substantially similar to the federal framework. The proposal was published in the Federal Register on April 3, opening a 60-day comment period that ran through June 2. On June 16, a bipartisan group of senators including Cynthia Lummis again urged the Treasury to specify the process and timeline for states to seek certification on an ongoing basis, preventing state oversight from being rendered ineffective.

The New York State Department of Financial Services established a state-level framework for U.S. dollar stablecoins in June 2022, requiring full reserves, redemption rights and independent attestations. After the U.S. GENIUS Act was signed into law on July 18, 2025, state regimes must be substantially consistent with federal standards, a requirement that will determine whether licensed issuers including Circle, Paxos and Gemini can continue operating.

NYDFS unveiled the proposal on June 9, 2026, opening a 10-day pre-proposal comment period to be followed by a 60-day consultation after formal publication. The rules would limit reserve concentration with any single custodian and cover seven categories of risk management, including internal controls, cybersecurity and internal audits. Issuers with $25 billion in circulation would have to hold at least 0.5% of reserves in safeguarded deposits each day, capped at $500 million. The rules would take effect alongside the GENIUS Act, with existing operators receiving a 12-month transition period.

Stablecoin regulation is in focus as the U.S. Congress returns. The GENIUS Act seeks to establish a federal regulatory framework whose rules will shape issuers' reserve-asset quality, yield distribution and compliance obligations. The framework will also affect the market strategies of banks, payment providers and cryptocurrency companies.

The public comment period for the GENIUS Act's stablecoin rules concluded in the first week of June, while the U.S. Senate is expected to make another push on the Clarity Act on June 3. As the regulatory process accelerates, global stablecoin circulation reached a record $322 billion at the end of May.

Bitcoin has long served three roles: an alternative route to US dollars, digital gold and a speculative asset. Demand for access to dollars has been an important source of support in markets with capital controls or depreciating local currencies. Ravi Tanuku, managing partner at Natural Capital, said US recognition of regulated stablecoins under the GENIUS Act provides a less volatile digital-dollar alternative, repricing bitcoin’s monetary premium.

Trump signed the GENIUS Act on July 18, 2025, requiring payment stablecoins to maintain 100% reserves in assets including US dollars and short-term US Treasuries. CoinDesk reported on May 27, 2026, that stablecoin market capitalization rose 45%, from about $211 billion in January 2025 to more than $306 billion in October. Bitcoin fell 43%, while gold outperformed it by nearly 100%.

US President Donald Trump signed the GENIUS Act on July 18, 2025, establishing the first federal regulatory framework for payment stablecoins. The law covers issuer eligibility, reserve assets and redemption mechanisms. It takes effect on the earlier of 120 days after final rules are issued or 18 months after enactment. The consistency of rules across agencies will shape competition between banks and crypto companies.

On April 21, 2026, groups including the American Bankers Association and the Bank Policy Institute wrote to the Treasury Department, the Federal Deposit Insurance Corporation, FinCEN and OFAC. They asked the agencies to wait until the Office of the Comptroller of the Currency completes its issuer rules and then allow a comment period of at least 60 days. The banking groups said the three rules are interdependent and warned that finalizing them simultaneously could create inconsistent standards and enforcement conflicts.