The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), officially designated as S. 1582 ^[1], is a landmark piece of U.S. legislation aimed at establishing a comprehensive federal regulatory framework for stablecoins — a type of cryptocurrency typically pegged to fiat currencies like the U.S. dollar ^[2]. Sponsored primarily by Senator Bill Hagerty (R-TN) ^[1]​^[4], the bill passed the Senate on June 17, 2025, with a vote of 68-30^[2]​^[3]​^[5] and was signed into law by President Trump on July 18, 2025. ^[7]​

It represents a significant federal effort to regulate stablecoins and is considered a step toward broader cryptocurrency regulation in the United States ^{[2] [3]}.

Background

Stablecoins have become integral to the cryptocurrency ecosystem, offering price stability and facilitating digital transactions. However, the rapid growth of the stablecoin market, now exceeding $250 billion in market capitalization, has raised concerns about financial stability, consumer protection, and the lack of a clear regulatory framework ^{[2] [3]}.

The GENIUS Act was introduced to address these concerns by providing a structured approach to the issuance and regulation of stablecoins, thereby enhancing oversight and boosting investor confidence in the digital asset space ^{[2] [3]}.

Key Provisions

The GENIUS Act outlines several critical components:

• Permitted Issuers: Only entities approved as "permitted payment stablecoin issuers" may issue stablecoins in the U.S. This includes federally regulated entities such as uninsured national banks chartered by the Office of the Comptroller of the Currency (OCC), certain federal branches, and national trust banks ^[8]. National trust banks are financial institutions permitted to operate across all 50 states, primarily providing custodial and asset management services ^[8].
• Reserve Requirements: Issuers are required to maintain 1:1 reserves in high-quality, liquid assets, such as cash deposits and short-term U.S. government securities like Treasury bills, to ensure redemption at par value. The framework explicitly excludes algorithmic stablecoins and synthetic dollars that rely on complex market trading to maintain their peg ^[8].
• Anti-Money Laundering (AML) Compliance: Issuers must adhere to AML and counter-terrorism financing protocols to prevent illicit activities.
• Consumer Protection: In the event of issuer insolvency, the bill prioritizes investor repayment, aiming to safeguard consumer interests.
• Regulatory Oversight: The Commodity Futures Trading Commission (CFTC) is granted authority over spot markets for digital commodities. The bill also grants sweeping authority to the Department of Treasury ^[3]. Following the act's passage, the CFTC updated its guidance to align with the new law, formally recognizing a broader range of issuers ^[8].
• Conflict of Interest Provisions: The bill includes measures to prohibit any member of Congress or senior Executive Branch official from issuing a payment stablecoin product during their time in public service ^{[2] [3]}. However, attempts by Democrats to include a provision barring the President and their family from profiting were unsuccessful ^{[2] [3] [5]}.

Legislative Journey

Initially, the GENIUS Act faced hurdles due to partisan disagreements and concerns over potential conflicts of interest, particularly relating to former President Donald Trump's involvement in cryptocurrency ventures ^{[2] [3] [5]}. Senator Jeff Merkley (D-Ore.) was a chief critic, accusing Republicans of "rubberstamping Trump's crypto corruption" by blocking efforts to bar the president from profiting from such ventures ^{[3] [5]}.

Despite these concerns, the bill, sponsored by Senator Hagerty ^{[1] [4]}, gained momentum after revisions and bipartisan negotiations. It passed the Senate on June 17, 2025, with a vote of 68-30 ^{[2] [3] [5]}. The U.S. House of Representatives subsequently passed the bill on July 17, 2025, with a vote of 308–122 ^[6].

On July 18, 2025, President Donald Trump signed the GENIUS Act into law at a ceremony in the White House’s East Room ^[7][6]. At the signing, Trump stated, "I pledged that we would bring back American liberty and leadership, and make the United States the crypto capital of the world, and that's what we've done." ^[7]

Sam Kazemian, cofounder of the stablecoin protocol, FRAX Finance expressed his support towards the bill:

"There’s only one token/project that will benefit the most as soon as the ink is dry on this historic bill, the one whose entire roadmap is being the first licensed legal tender stablecoin." - he tweeted

He also tweeted:

"GENIUS Bill is such a big deal the big brains that understand the ramifications think the entire market should reprice. I agree, but now imagine a concentrated pick whose entire roadmap is based on the post-GENIUS landscape. How much is that worth? Few."

$widget0 YOUTUBE@VID

$$

Implications

The passage of the GENIUS Act is seen as a pivotal moment in the regulation of digital assets in the U.S. By establishing a clear legal framework for stablecoins, the legislation aims to:

• Enhance financial stability by mitigating risks associated with unregulated stablecoin issuers.
• Foster innovation by providing regulatory clarity, encouraging responsible development within the crypto industry.
• Protect consumers through stringent reserve and compliance requirements.
• Position the U.S. as a leader in the global digital economy by proactively addressing the challenges and opportunities presented by emerging financial technologies ^{[2] [3]}.

Post-Enactment Developments

Following the enactment of the GENIUS Act, federal agencies began to align their regulations with the new framework.

In December 2025, the Federal Deposit Insurance Corporation (FDIC) proposed a framework for how commercial banks could issue stablecoins through subsidiaries. Under the proposal, the FDIC would oversee both the parent bank and its stablecoin-issuing arm to ensure compliance with the GENIUS Act's requirements for collateral and redemption ^[8].

In February 2026, the Commodity Futures Trading Commission (CFTC) issued Staff Letter 26-05, which amended and replaced its previous guidance from December 8, 2025 (Staff Letter 25-40). This update was explicitly made to reflect the new regulatory landscape under the GENIUS Act. The key change was expanding the definition of a permitted payment stablecoin issuer to formally include national trust banks, which the CFTC's Market Participants Division stated was its original intent ^[8].