Signed on July 20, 2025, the GENIUS Act establishes the first U.S. federal rules for payment stablecoins. Key requirements mandate stablecoins be fully backed 1:1 by liquid assets (cash, short-term Treasuries) and force issuers to publicly disclose reserve composition monthly. Issuers become regulated financial institutions subject to strict anti-money laundering (AML) and know-your-customer (KYC) rules. Crucially, paying interest solely for holding stablecoins is prohibited. The law creates a dual licensing system allowing federal or state approval for issuers. Phased implementation aims to enhance consumer protection, foster responsible innovation, and bolster the US dollar's global position through regulated digital dollars.
