GENIUS Act: Regulatory Alerts
Catch Up on Payment Stablecoin Activity
The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), signed into law in July 2025, establishes a regulatory framework for “payment stablecoins”—generally defined as digital assets redeemable at a fixed monetary value and used for payments or settlement. Since then, federal and state regulators have issued proposals to implement key provisions of the GENIUS Act.
The GENIUS Act will take effect on the earlier of January 18, 2027, or 120 days after the primary federal regulators issue any final regulations to implement the Act.
Looking Ahead
Expect additional rulemaking activity to include:
- FRB proposals to implement licensing, issuance, and operating requirements
- Treasury proposals governing foreign payment stablecoin issuers
- Final Rules from Treasury and the federal payment stablecoin regulators
More broadly related to digital assets, potential market structure legislation continues to be considered (e.g., CLARITY Act).
In the meantime, keep up with regulatory developments related to the GENIUS Act as they relate to the law's four key provisions:
Release Date | Regulatory Alert | Description | Key Provisions of the GENIUS Act | |||
Licensing of Permitted Payment Stablecoin issuers | Requirements for Issuing Payment Stablecoins | Capital, Liquidity and Risk Management Requirements | Compliance with BSA and Sanctions Laws | |||
Jun 2025 | Establishes a regulatory framework for payment stablecoins – Senate approval. | * | * | * | * | |
Jul 2025 | Crypto and Digital Assets: Final GENIUS Act and Other Actions | Establishes a regulatory framework for payment stablecoins – full congressional approval. | * | * | * | * |
Dec 2025 | FDIC Proposal: Application Process for Payment Stablecoin Issuers | Would implement procedures to obtain approval(license) to issue payment stablecoins and engage in certain related activities. | * | |||
| Feb-Apr 2026 | FDIC/NCUA/OCC Proposals for Applications, Prudential Frameworks | Outlines proposed application and licensing requirements. | * | |||
Outlines proposed operating requirements for IDIs and PPSIs. | * | * | * | |||
Apr 2026 | Looks to establish broad-based principles for determining when a state-level regulatory regime is “substantially similar” to a federal regulatory framework. | * | * | * | * | |
Apr 2026 | Would add PPSIs as a BSA financial institution and implement AML/CFT and sanctions compliance program requirements for them. | * | ||||
May 2026 | NCUA Proposal on Payment Stablecoin Issuance by Credit Union-Affiliated Entities | Would create requirements for PPSIs that are subsidiaries of federally insured credit unions (FICUs). | * | * | * | |
Jun 2026 | FinCEN/FDIC/FRB/NCUA/OCC Customer Identification Program Proposed Rule | Would require customer identification programs under Bank Secrecy Act for PPSIs. | * | |||
Jun 2026 | Proposal outlines requirements for NY- “authorized payment stablecoin issuers” consistent with all GENIUS Act provisions. | * | * | * | * | |
Jun-Jul 2026 | Proposed information collection and reporting on reserve asset requirements for PPSIs and FPSIs. | * | ||||
Aug 2026 | GENIUS Act: Treasury Proposal for Issuance, Offer, and Sale of Payment Stablecoins | Would govern who may issue, offer, sell payment stablecoins in the U.S., including activities involving PPSIs and FPSIs. | * | * | ||
Key Provisions Explained
Licensing of Permitted Payment Stablecoin Issuers
The GENIUS Act establishes a regulatory framework for authorizing/licensing permitted payment stablecoin issuers (PPSIs) at the federal and state levels, where the state framework is expected to be “substantially similar” to the federal framework and state PPSIs that exceed a stated threshold would be subject to joint state and federal oversight. The law identifies the payment stablecoin regulators as well as relevant categories of PPSIs such as subsidiaries of insured depository institutions, certain nonbanks, and uninsured national banks.
Requirements for Issuing Payment Stablecoins
Permitted payment stablecoin issuers must maintain fully backed reserves, provide regular public disclosures, regularly report, comply with financial and anti-money laundering regulations, and limit their activities primarily to issuing, redeeming, safeguarding, and managing stablecoins and related reserves.
Capital, Liquidity, and Risk Management Requirements
The GENIUS Act requires PPSIs to comply with certain risk management requirements including capital, liquidity/redemption, reserves diversification, operational risks (e.g., cybersecurity, internal controls, TPRM), and information technology risk.
Compliance with Bank Secrecy Act and Sanctions Laws
Permitted payment stablecoin issuers would be treated as financial institutions under the Bank Secrecy Act and be expected to establish and maintain an anti-money laundering/combatting the financing of terrorism program, including a customer identification program, along with a sanctions compliance program.
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GENIUS Act: Regulatory Alerts
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