The GENIUS Act, effective July 18, 2025, establishes strict regulations for U.S. stablecoins while leaving guidelines for foreign issuers undefined.
Introduction to the GENIUS Act
The GENIUS Act was signed into law by President Trump on July 18, 2025. It introduces a new federal regulatory framework for stablecoins in the U.S., requiring that stablecoins be backed 1:1 by U.S. dollars or Treasuries, which may affect liquidity and market dynamics for cryptocurrencies.
Impact on Domestic and Foreign Stablecoins
The GENIUS Act will have immediate impacts on U.S.-issued stablecoins, such as USDC, reallocating institutional capital. While U.S.-regulated stablecoins will face new regulatory pressures, unregistered and foreign tokens will encounter uncertain paths in the American market.
Prospects and Uncertainties for Foreign Issuers
The Act requires foreign issuers to comply with OCC-supervised standards; however, the exact criteria remain undefined. This creates uncertainty for international projects seeking entry into the U.S. market. More precise guidelines are expected by 2027 as compliance deadlines approach for foreign digital currency issuers.
The GENIUS Act has the potential to significantly alter the stablecoin market both domestically and globally. While clear rules for domestic issuers are defined, the uncertainty surrounding foreign issuers may lead to substantial changes in the global crypto industry.
