#GENIUSAct The GENIUS Act (“Guiding and Establishing National Innovation for U.S. Stablecoins Act”):
🏛️ What It Is
A newly signed U.S. federal law (July 18, 2025) focused on payment‑stablecoins—crypto tokens pegged to the U.S. dollar—that protects consumers and strengthens the dollar’s reserve status .
Only permitted issuers (banks, credit union subsidiaries, OCC-chartered non‑banks, or state-approved firms under $10 B) can issue stablecoins in the U.S. .
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⚖️ Key Regulatory Pillars
100% reserves in U.S. dollars or short-term Treasuries, with mandatory monthly disclosures .
Ban on issuing interest or yield on stablecoins to holders .
Enforcement of anti‑money laundering (Bank Secrecy Act) and sanctions compliance .
Prioritization of consumer claims in bankruptcy—stablecoin holders get first rights to reserve funds .
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🧭 Rollout Timeline
Timeline starts July 18, 2025 (date of Trump’s signature) .
Becomes effective 18 months after enactment, or 120 days after final federal rules—whichever comes first .
Implementation details will be defined by regulators in the next year; full compliance required by 2026–2028 .
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🏦 Industry Impacts
Major U.S. banks and fintech firms (including Bank of America, JPMorgan, PayPal, Circle, Ripple) now have a clear on-ramp to issue and custody stablecoins .
Offers more certainty to DeFi, although some platforms worry about unresolved questions around yield restrictions .
Expected to catalyze growth in the $250–$300 billion stablecoin ecosystem, potentially boosting Treasuries demand and giving the U.S. a leadership role in digital finance .
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🧩 What It Doesn’t Cover
Does not address broader crypto topics like token classification or trading frameworks—those are parts of the separate Clarity Act, passed alongside during “Crypto Week” .
It does exclude stablecoins from being treated as securities or commodities under SEC/CFTC regulation .
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🔍 Why It Matters
First comprehensive U.S. federal stablecoin laws—fills a longstanding regulatory gap .
Offers consumer safeguards via transparency, insolvency protection, and AML rules .
Opens the door for mainstream banks, fintechs, and possibly big tech to deploy stablecoins—though critics warn of risk and potential conflicts .
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📌 Next Steps for Stakeholders
Issuers should prepare to apply for federal or state stablecoin licenses.
Custodians must review asset segregation, reporting, and anti-money laundering protocols.
DeFi platforms should track rules around stablecoin interoperability, custody, and yield compatibility.
