#StablecoinLaw 🔍 What is Stablecoin Law?

It is the first official legal framework regulating stablecoins used in payments — particularly related to reserve requirements, transparency disclosures, and licensing oversight — recently marked by the passage of the GENIUS Act in the United States.

🛡️ Key Points:

1:1 Reserve Requirement

Stablecoins must be fully backed by low-risk value assets (USD, treasury bonds), held in a separate account and subject to regular audits.

“Dual Licensing” Oversight

Dual licensing mechanism:

Federal agencies (federal banks, OCC…) license larger organizations.

State agencies license smaller organizations, with those exceeding USD 10 billion needing to transition to federal licensing.

Anti-Money Laundering Requirements, Transparency Reporting

Compliance with AML/KYC laws, monthly reserve disclosures, audits per PCAOB if large scale.

WIRED

Prohibition on Direct Interest Payments from Stablecoins

Issuers are not allowed to pay interest to stablecoin holders, to prevent turning it into a risky financial product.

Oversight of Foreign Issuers

Issuers launching stablecoins in the U.S. market must also adhere to equivalent regulations.

Official Effectiveness and Transition Period

The law takes effect approximately 120 days after the regulations from the agency, or 18 months after being signed into law — the time for organizations to prepare for compliance.

✅ Implications for the Industry:

Clarifies the legal capital for issuing and using stablecoins, enhancing their adoption in payments and e-commerce.

Increases user trust, encouraging banks and fintechs to issue their own stablecoins (Bank of America, JPMorgan...)

Investment Market

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