On July 18, 2025, President Donald Trump signed the GENIUS Act into law, which introduces new rules for stablecoins in the US, providing clarity and control in a previously unregulated sector.
What Is the GENIUS Act?
The GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins Act) creates a comprehensive legislative framework for 'payment stablecoins' in the US. Previously, stablecoins operated without oversight, often leading to market instability.
A Legal First for Stablecoin Issuance
The Act imposes strict requirements on issuers, including full 1:1 reserves in cash or short-term Treasuries, monthly audits, and licensing only for recognized institutions.
Protecting Consumers and Financial Integrity
The GENIUS Act emphasizes investor security as demand for stablecoins surges. Issuers are barred from paying interest on stablecoin balances, preventing hidden yield traps.
The GENIUS Act represents a significant shift in the regulation of stablecoins in the US, ensuring consumer protection and contributing to financial stability.
