#StablecoinLaw "Stablecoin law" refers to the evolving legal and regulatory frameworks governing stablecoins, which are a type of cryptocurrency designed to maintain a stable value, typically by being pegged to a fiat currency like the U.S. dollar, or to commodities or a basket of assets. The primary goal of stablecoin regulation is to address potential risks, such as financial instability, consumer protection concerns, and money laundering, while fostering innovation in digital finance.

In the United States, significant developments have recently occurred. President Trump signed the "Guiding and Establishing National Innovation for U.S. Stablecoins Act," or GENIUS Act, into law on July 18, 2025. This landmark federal legislation provides a comprehensive regulatory framework for payment stablecoins. Key aspects of the GENIUS Act include:

* Definition of Payment Stablecoins: It defines "payment stablecoins" as digital assets used for payment or settlement, where the issuer is obligated to convert, redeem, or repurchase for a fixed monetary value, or represents that it will maintain a stable value relative to a fixed amount of monetary value.

* Regulatory Oversight: The Act establishes a new regulatory framework, allowing banks, nonbanks, and credit unions to issue stablecoins under federal and, in some cases, state-level oversight.

* Reserve Requirements: It mandates clear reserve requirements, ensuring that stablecoins are fully backed by high-quality, liquid assets.

* Prohibitions: The GENIUS Act prohibits certain activities, such as offering interest or yield on stablecoin holdings, and places restrictions on the use of foreign entity-issued stablecoins in the U.S. market unless specific compliance requirements are met.

* Anti-Money Laundering (AML) and Sanctions: It includes provisions that require foreign issuers to meet U.S. AML and sanctions compliance before issuing stablecoins to U.S. holders.

Internationally, other jurisdictions are also developing their stablecoin regulations. The European Union's Markets in Crypto-Assets Regulation (MiCA) categorizes stablecoins into "electronic money tokens" (EMTs) and "asset-referenced tokens" (ARTs), setting out comprehensive rules for their issuance and operation. Singapore's Monetary Authority (MAS) has also introduced a framework for single-currency stablecoins, emphasizing full reserve backing, redemption options, and stringent security measures. Global standards from bodies like the Financial Stability Board (FSB) and the Bank for International Settlements (BIS) also advocate for stablecoin arrangements to be subject to equivalent regulation as traditional payment systems if they perform similar functions.

The overarching aim of these regulations is to bring stablecoins within the regulatory perimeter, enhance trust, ensure financial stability, and promote their safe and widespread adoption as a means of payment.

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