GENIUS Act Paves Way for Regulated Stablecoins in Corporate Treasuries

The GENIUS Act, a US law aimed at regulating stablecoins, may soon make them more appealing to corporate treasurers. The law requires issuers of payment stablecoins to obtain an appropriate federal or state license by January 18, 2027. By July 2028, digital asset service providers will be prohibited from offering stablecoins to US customers unless those coins come from licensed issuers.

Stablecoins have already proven useful as a rail for payments, allowing companies to transfer funds around the clock and redeem them on the other side. However, holding onto stablecoins is different, requiring treasurers to consider factors such as capital preservation, accessibility, counterparty exposure, and return.

The GENIUS framework currently limits the ability to turn payment stablecoins into conventional interest-bearing investments. For corporate treasurers, this means that the economic case for holding stablecoins must come from something other than yield.

Prajit Nanu, founder and CEO of real-time payments firm Nium, believes that stablecoins have significant value as a settlement value, rather than just a payment value. He envisions a treasury layer across all entities where money can be moved instantly among them.