Stablecoin Regulation Takes Shape as GENIUS Act Final Rules Near

The GENIUS Act, signed into law in July 2023, is set to regulate stablecoins for the first time. Stablecoins are cryptocurrencies pegged to a stable fiat currency, such as the US dollar or euro.

The act requires stablecoin issuers to be backed by US dollars, short-term Treasuries, or central bank deposits at a 1:1 reserve ratio, rather than riskier assets.

Larger issuers with over $10 billion in circulation will be overseen by federal regulators, while smaller ones can opt for state-level regulation. All stablecoin issuers are barred from paying passive yields to holders and must submit monthly attestations for their reserves.