The GENIUS Act — short for Guiding and Establishing National Innovation for U.S. Stablecoins Act — was signed into law on July 18, 2025. It sets clear federal rules for stablecoins for the first time.
Why the GENIUS Act matters
Before this law, stablecoins were only lightly regulated, making it harder to know if they were safe or backed by real assets. The GENIUS Act changes that with five key requirements:
- Backed by real assets: Issuers must hold cash or U.S. Treasuries equal to every digital dollar they create.
- Only approved issuers: Limited to approved banks or licensed non-banks.
- Transparency: Regular reports on reserves and compliance with anti-money laundering rules.
- Strengthening the U.S. dollar: By linking stablecoins to U.S. Treasuries, demand for U.S. government debt is reinforced.
- Building trust: Clear rules make stablecoins safer for both institutions and everyday users.
Operational requirements
The GENIUS Act spells out clear operational requirements: maintain a 1:1 reserve ratio at all times, store reserves with qualified custodians, provide monthly public attestations from independent auditors, register with the OCC or relevant state regulators, comply with AML and CFT rules, and allow redemption within two business days.
The recap
Before: Stablecoins didn't always follow the same rules, so you couldn't be sure they were safe. Now: Only trusted issuers can make them, they must hold real money to back them, and they must follow strict laws. Why it's good: Protects people, helps the U.S. dollar, and makes digital money more trustworthy.