The GENIUS Act explained: what US stablecoin law now requires

The GENIUS Act, Public Law 119-27, was signed on 18 July 2025. It is federal law, but most of it does not yet apply. Under Section 20 it takes effect on the earlier of 18 January 2027 or 120 days after the primary federal regulators issue any final implementing rules, and no such rule had been published in the Federal Register by 22 September 2026. What exists today is the statute and a set of proposals. This guide takes each in turn, section by section, and gives the agency and date for every proposal.

This is not legal advice. A compliance programme built against this law needs counsel and the final rule text.

Who may issue a payment stablecoin

Section 3(a) makes it unlawful for anyone other than a "permitted payment stablecoin issuer" to issue a payment stablecoin in the United States. The Act recognises three kinds: a subsidiary of an insured depository institution, approved by that institution's federal regulator; a federal qualified issuer, a category that includes a nonbank entity approved by the Office of the Comptroller of the Currency (OCC); and a state qualified issuer, chartered under a state regime.

The state route is capped. Under Section 4(c), a state qualified issuer with no more than $10 billion in consolidated outstanding issuance may opt for a state regime, provided that regime is "substantially similar" to the federal framework. Under Section 4(d), an issuer that crosses $10 billion must, within 360 days, move into a federal framework administered with its state regulator, or stop issuing new coins until it is back under the threshold. Its federal regulator may waive the transition.

Whether a state regime qualifies is decided by the Stablecoin Certification Review Committee: the Treasury Secretary as chair, with the Chair of the Federal Reserve Board (or the Vice Chair for Supervision) and the Chair of the FDIC. Treasury proposed the principles for judging "substantially similar" in the Federal Register on 3 April 2026; comments closed on 2 June 2026 and the rule is not final. States have until one year after the Act's effective date to submit their initial certifications. A public company not predominantly engaged in financial activities may issue only with a unanimous vote of the Committee, and the Act extends the same bar to non-US companies of that kind.

What counts as issuing "in the United States", and as offering or selling to a person there, is still being defined. Treasury announced its proposal on 17 August 2026 and published it on 18 August; comments close on 19 October 2026.

Reserves: one to one, from a short list

Section 4(a)(1)(A) requires identifiable reserves "on an at least 1 to 1 basis", drawn only from:

• US coins and currency, or balances at a Federal Reserve Bank;
• demand deposits, or deposits withdrawable on request, at insured depository institutions;
• Treasury bills, notes or bonds with 93 days or less to maturity, or issued with that maturity;
• overnight repurchase agreements backed by Treasury bills of 93 days or less;
• overnight reverse repurchase agreements collateralised by Treasuries, which must be tri-party, centrally cleared or with a counterparty judged creditworthy under severe stress;
• registered government money market funds invested solely in the assets above;
• other similarly liquid federal government-issued assets that the regulator approves;
• tokenised forms of most of these.

Section 4(a)(2) bars an issuer from pledging, rehypothecating or reusing its reserves, with three exceptions: margin on the permitted repo and reverse repo, standard custodial services, and repo to meet expected redemptions, which must be centrally cleared or approved in advance by the regulator.

Capital and liquidity: proposed, not settled

Section 4(a)(4) leaves capital, liquidity and diversification standards to the regulators. The OCC issued its proposal on 25 February 2026; it was published on 2 March and comments closed on 1 May. At inception an issuer would hold capital of the greater of $5 million or the amount set in its approval order, plus an operational backstop of highly liquid assets sized by reference to its operating expenses over the previous 12 months. An optional safe harbour for reserves would require at least 10% in demand deposits or Federal Reserve balances, and cap reserves at any one institution at 40%. The notice asks well over 200 questions. The FDIC published its own proposal for the issuers it supervises on 10 April 2026, with comments to 9 June. Neither is final, and every figure in them can change.

Custody of reserves

Section 10 already sets a statutory custody standard. A firm may hold reserves, or the private keys used to issue, only if it is supervised by a federal payment stablecoin regulator, another listed federal financial regulator, or a state bank or credit union supervisor. It must treat the assets as the customer's, protect them from its own creditors and keep them segregated from its own, subject to exceptions for omnibus accounts. The OCC proposal adds detail, including that a custodian keep possession or control of the assets, for example by controlling the private keys to the wallet that holds them.

What an issuer must disclose, and how often

Section 4(a)(1)(C) requires an issuer to publish, monthly on its website, the total number of its stablecoins outstanding and the amount and composition of its reserves, including the average tenor and geographic location of custody of each category. Section 4(a)(3) requires that report to be examined each month by a registered public accounting firm, and the chief executive and chief financial officer to certify its accuracy to the regulator each month; a certification known to be false carries criminal penalties. Section 4(a)(10) adds audited annual financial statements for an issuer with more than $50 billion outstanding that is not already an SEC reporting company.

Redemption

Section 4(a)(1)(B) requires a published redemption policy with "clear and conspicuous procedures for timely redemption". Only a regulator may impose discretionary limits on timely redemption, and every fee for buying or redeeming must be disclosed in plain language and changed only on at least 7 days' notice. The statute sets no deadline in days. The OCC proposal would require redemption no later than two business days after a valid request, stretching to seven calendar days only when requests exceed 10% of outstanding issuance within 24 hours. What settlement looks like for a treasurer is covered in stablecoin payments in corporate treasury.

No interest or yield to holders

Section 4(a)(11) reads: "No permitted payment stablecoin issuer or foreign payment stablecoin issuer shall pay the holder of any payment stablecoin any form of interest or yield (whether in cash, tokens, or other consideration) solely in connection with the holding, use, or retention of such payment stablecoin."

The text addresses the issuer. The harder question is yield that reaches holders through someone else. The OCC proposal would create a rebuttable presumption that affiliate or third-party arrangements designed to replicate yield economics are inconsistent with the statute, while still leaving room for some profit-sharing with non-affiliated partners. Where that line falls depends on the final rule. How reserve income moves today is set out in how stablecoin issuers make money.

If an issuer fails

Section 11 amends the Bankruptcy Code. Required reserves are excluded from the issuer's bankruptcy estate, and holders have priority over every other claimant to those reserves, ratably among themselves. If the reserves fall short, a holder's remaining claim ranks first against the estate, ahead even of other priority claims, to the extent the shortfall is reserves Section 4 required the issuer to hold. The automatic stay does not block redemption from reserves, and the court is to use best efforts to start distributions within 14 days of the hearing. An insured bank issuer is resolved by its bank regulator instead; a subsidiary or nonbank issuer goes through bankruptcy. Separately, Section 10 gives a custodian's customers priority over other claimants to the payment stablecoins it holds for them.

Anti-money laundering and sanctions

Section 4(a)(5) treats an issuer as a financial institution under the Bank Secrecy Act and names what follows: an anti-money laundering programme with a designated officer, record retention, suspicious activity reporting, the technical ability to block, freeze and reject unlawful transactions, a customer identification programme with enhanced due diligence, and a sanctions compliance programme. Section 4(a)(6) lets an issuer issue only if it can comply, and will comply, with lawful orders.

The detail is proposed, not adopted. FinCEN and the Office of Foreign Assets Control issued a joint proposal on 8 April 2026, published on 10 April with comments to 9 June; it would apply the Recordkeeping Rule to transfers of $3,000 or more and the Travel Rule to issuers. FinCEN published a separate customer identification proposal on 22 June 2026, and the FDIC proposed Bank Secrecy Act and sanctions standards for its issuers on 5 June 2026. None is final. The mechanics of screening and recordkeeping are covered in the travel rule in practice.

Foreign issuers

Section 18 exempts a foreign issuer from the Section 3 prohibitions only if all four conditions hold: its home regime is one Treasury has determined to be "comparable" to the Act; it is registered with the OCC; it holds reserves at a US financial institution sufficient to meet US customers' liquidity demands, unless a reciprocal arrangement provides otherwise; and its home country is not under comprehensive US sanctions or designated a primary money laundering concern. Treasury may make a comparability determination only on the recommendation of the other Committee members, and must publish its justification in the Federal Register first. On a request, it must decide within 210 days of a substantially complete application. We found no such determination in the Federal Register up to 22 September 2026. Treasury should complete reciprocal arrangements with comparable jurisdictions by 18 July 2027.

Enforcement

Knowingly taking part in issuance by anyone who is not a permitted issuer carries a fine of up to $1,000,000 per violation, up to five years in prison, or both (Section 3(f)). Section 6 adds civil penalties of up to $100,000 for each day that a dollar stablecoin is issued in breach of Section 3. Section 8 targets foreign issuers that cannot or will not comply with lawful orders: Treasury may designate one noncompliant and, if it does not comply within 30 days of notice, bar digital asset service providers from facilitating secondary trading in its coin. A provider that knowingly breaches that bar faces up to $100,000 per violation per day, and a foreign issuer that knowingly keeps offering its coin in the United States faces up to $1,000,000 per violation per day. These penalties are in the statute, but they apply from the effective date.

Every date, in one place

• 18 July 2025: the Act is signed (Public Law 119-27).
• 18 July 2026: the Section 13 deadline for implementing regulations. It passed with none final.
• 18 January 2027: the effective date, 18 months after enactment, from which only permitted issuers may issue. The alternative trigger, 120 days after a final rule, could only bring this forward if a rule had been issued by 20 September 2026, and none had been published by 22 September.
• 18 July 2027: the date by which Treasury should complete reciprocal arrangements for foreign regimes.
• 18 January 2028: the deadline for state regulators' initial certifications, if the Act takes effect on 18 January 2027.
• 18 July 2028: three years after enactment, digital asset service providers may no longer offer or sell to a person in the United States a payment stablecoin that a permitted issuer did not issue, subject to the Section 18 exception for foreign issuers.

What is unsettled

Four things are open. First, every implementing rule is still a proposal: the OCC and FDIC prudential rules, Treasury's state principles and Section 3 definitions, and the FinCEN and OFAC anti-money laundering rules. The OCC has said it aims to finalise its rule by November 2026. Second, we found no certification of any state regime, and the standard for certifying one is itself still a proposal. Third, the reach of the yield ban beyond the issuer turns on how the OCC's proposed presumption survives into a final rule. Fourth, no foreign regime has yet been found comparable, which leaves open how foreign-issued coins will reach US users after July 2028.

For the wider problem of telling an enacted rule from a regulator's plan, see what regulators actually permitted in 2026. For how a payment stablecoin differs from tokenised deposits and money market funds, see stablecoins, tokenised deposits and money market funds, and for the institutional case, the institutional view of stablecoins.