Blockchain Legal Resource

On June 18, 2025, President Trump signed into law the “Guiding and Establishing National Innovation for U.S. Stablecoins Act” or GENIUS Act.  The new Act establishes a comprehensive mechanism for the regulation of payment stablecoins, and represents the first major legislation Congress has passed on digital assets.

Under the Act, a payment stablecoin is a digital asset that: 

• is or is designed to be used as a means of payment or settlement; and
• the issuer of which (1) is obligated to convert, redeem or repurchase for a fixed amount of monetary value, not including a digital asset denominated in a fixed amount of monetary value, and (2) represents that such issuer will maintain, or create the reasonable expectation that it will maintain, a stable value relative to the value of a fixed amount of monetary value.

A payment stablecoin does not include national currency, a bank deposit (which would include tokenized deposits), or traditional securities.

The Act establishes a bank-like regulatory and supervisory regime for issuers of payment stablecoins, and requires them to register with a federal bank regulator or, under certain circumstances, an approved state agency. All payment stablecoins must be backed 1:1 by eligible assets including cash, demand deposits, short-term treasury securities, and certain other cash equivalents. Notably, payment stablecoins issuers are deemed financial institutions for purposes of the Bank Secrecy Act and must implement appropriate AML/CFT compliance programs.

The Act preempts certain state laws when applied to payment stablecoin issuers, including money transmitter regulation, but does not preempt state laws concerning consumer protection. It also states that payment stablecoins are not securities under federal law and permitted payment stablecoin issuers are not investment companies under the Investment Company Act. Further, the Act states that payment stablecoins are not commodities under the Commodity Exchange Act.

The Act requires significant agency rulemaking, and it takes effect on the earlier of 18 months after enactment and 120 days after regulators issue final regulations. The White House issued a fact sheet summarizing the law, available here.