GENIUS Act Brings Clarity to US Stablecoin Regulation
The GENIUS Act is a new law in the United States that aims to regulate payment stablecoins, including USDT and USDC. The law, which was signed into effect on July 18, 2025, focuses on digital assets intended for payment or settlement that issuers are obligated to redeem for a fixed monetary value.
Under the GENIUS Act, permitted issuers must maintain reserves at least equal to their outstanding payment stablecoins. These reserves can include high-quality and liquid assets such as US currency, deposits at approved institutions, short-term Treasury securities, and certain repurchase agreements.
The law also requires issuers to disclose their reserves regularly, introduce examination, reporting, and audit requirements, and establish procedures for timely redemption. Additionally, stablecoin holders receive priority treatment in an issuer's insolvency, but users can still face operational delays, cyber incidents, and market-price deviations.