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In June 2025, the U.S. Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, the first time a stand-alone piece of legislation was passed that focused on dollar-pegged crypto tokens. The bill heads next to the House, where quick adoption appears likely after President Donald Trump urged lawmakers to “take the win” and send a clean version to his desk.
But what does the GENIUS Act do? And what exactly are “stablecoins“? Read on to find out.
Key Takeaways
- The GENIUS Act would issue a federal license to “payment stablecoin” issuers, while spelling out reserves, audit, and redemption standards.
- Small issuers (less than or equal to $10 billion in circulation) could opt for state oversight, while larger players default to the Office of the Comptroller of the Currency (OCC), U.S. Federal Reserve, or Federal Deposit Insurance Corporation (FDIC).
What Are Stablecoins?
Stablecoins are blockchain-based tokens engineered to remain at a fixed price—usually $1—backed by safe, highly liquid assets such as cash and short-term U.S. Treasury bills, with each “coin” redeemable for a real U.S. dollar on demand.
Dollar-pegged stablecoin giants like Tether’s USDT and Circle’s USDC already settle trillions in transactions, powering crypto trading, cross-border payments, and are increasingly being looked at for point-of-sale experiments by well-known retailers like Amazon.com Inc. (AMZN) and Walmart Inc. (WMT).
How the GENIUS Act Regulates Stablecoins
The GENIUS Act is meant to ensure that no one may issue or sell a U.S.-pegged payment stablecoin unless they are a Permitted Payment Stablecoin Issuer (PPSI). Banks, credit unions, and OCC-chartered non-banks can apply federally; smaller fintechs, however, can opt into certified state-level frameworks that meet or exceed federal rules. Foreign issuers gain access only if their home regime is “comparable” and they submit to OCC examination.
All PPSIs must fully back tokens with high-quality liquid assets, segregate reserves, avoid rehypothecation, and publish monthly attestations.
The bill also carves stablecoins out of the definitions of securities, deposits, and bank liabilities, pulling them outside direct U.S. Securities and Exchange Commission jurisdiction while folding them into the Bank Secrecy Act for anti-money laundering compliance.
Observers expect a presidential signature before the end of the year, providing markets with a clear compliance calendar well ahead of the 2027 tax season.
Winners, Losers, and the Dollar
In markets, clarity is key. Coinbase shares jumped after the Senate vote as analysts predicted its USDC ecosystem will enjoy a first-mover compliance advantage; meanwhile, legacy networks Visa and Mastercard slipped amid fears that on-chain dollars could steal settlement volume.
The U.S. Treasury might be another beneficiary: mandatory T-bill backing means stablecoin Treasurys could become a top buyer by 2030, reinforcing demand for government debt and, by extension, dollar hegemony against rivals such as China’s e-CNY. That said, stablecoins are still a very minor part of the market for U.S. Treasurys.
Losers might include algorithmic or under-collateralized tokens that fail the Act’s strict reserve requirements test, and offshore issuers unwilling to submit to OCC oversight.
Tip
Banks that once hesitated to enter the crypto space may now issue branded stablecoins, confident they will be regulated like other payments businesses rather than securities offerings.
What It Means for You
For most people, the practical upside of the GENIUS Act promised by its backers is cheaper, faster, and always-on digital dollars. Unlike payments apps like Venmo or PayPal that merely pre-fund transactions while relying on legacy ACH/card networks behind the scenes, a GENIUS-compliant stablecoin is the rail itself: a dollar-token that settles finally and irreversibly on a public blockchain in seconds, 24/7, worldwide.
One ready use case is international transfers. Today, sending a $200 remittance from the U.S. could cost more than 6% in fees and takes days to clear; compliant stablecoins could cut that to pennies and seconds.
Even if you don’t plan on sending money overseas, the bill is already nudging mainstream brands to accept on-chain dollars at checkout. Shopify has begun rolling out USDC payments, promising merchants lower interchange costs and shoppers perks like cash-back for paying with a wallet instead of a card.
The Bottom Line
Stablecoins may soon operate under a unified regulatory framework, opening the door for mainstream payments adoption. For investors, that means betting on issuers that can meet OCC-grade scrutiny, monitoring how many Treasury bonds they soak up, and watching whether clearer rules draw Wall Street and Main Street deeper into the crypto space.
