The GENIUS Act: the federal framework for payment stablecoins

What it is

The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), Public Law 119-27, was signed on July 18, 2025. It makes it unlawful for anyone other than a permitted payment stablecoin issuer (PPSI) to issue a payment stablecoin in the United States.^[1] This page describes the statute and agency proposals as facts; it is not legal advice.

Who can issue

The Act recognizes three kinds of PPSI, each formed in the United States:^[1]

• A subsidiary of an insured depository institution authorized under §5. Insured credit unions count as insured depository institutions. For a credit union or its subsidiary, the regulator is NCUA.
• A federal qualified payment stablecoin issuer, a nonbank licensed and supervised by the OCC.
• A state qualified payment stablecoin issuer, licensed by a state regulator. A state issuer with no more than $10 billion outstanding may opt for state-level regulation if the state regime is substantially similar to the federal one.

Core requirements

• 1:1 reserves in US currency, Federal Reserve balances, demand deposits or insured shares, Treasury bills, notes or bonds with 93 days or less to maturity, certain overnight repurchase agreements, and government money market funds that hold those assets (§4(a)(1)(A)).^[1]
• Monthly public disclosure of tokens outstanding and of reserve amount, composition, average tenor and custody location, examined monthly by a registered public accounting firm and certified by the CEO and CFO (§4(a)(1)(C), §4(a)(3)).^[1]
• No rehypothecation: reserves may not be pledged or reused except in narrow cases such as meeting redemptions (§4(a)(2)).^[1]
• No interest or yield: "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" (§4(a)(11)).^[1]
• No insurance claims: it is unlawful to represent that payment stablecoins are backed by the full faith and credit of the United States, guaranteed by the US government, or subject to federal deposit or share insurance (§4(e)(2)).^[1]
• Compliance tools: issuers are treated as financial institutions under the Bank Secrecy Act and must have the technical ability to block, freeze and reject transactions that violate law (§4(a)(5)).^[1]
• Holder priority: in a bankruptcy or similar proceeding of a PPSI, holders' claims on the required reserves rank ahead of all other claims, and courts are directed to use best efforts to begin distributions within 14 days of the required hearing (§11).^[1]

When it takes effect

Under §20, the Act takes effect on the earlier of (1) 18 months after enactment or (2) 120 days after the primary federal regulators issue final implementing regulations.^[1] Eighteen months after July 18, 2025 is January 18, 2027. For the 120-day path to come first, final rules would have had to issue by September 20, 2026. As of the date on this page we found no final implementing rule, so January 18, 2027 is the effective date. The OCC has sent a final rule for review, and the Comptroller has said he expects to issue it by the end of October 2026.^[2][3] Three years after enactment (July 18, 2028), digital asset service providers may no longer offer or sell payment stablecoins from issuers that are not permitted (§3(b)).^[1]

Where the implementing rules stand

For credit unions: what the Act means

• No direct issuance. NCUA's proposal states that federally insured credit unions "are not permitted to issue stablecoins directly". A credit union subsidiary may apply for an NCUA license to become a PPSI.^[4]
• CUSOs are in scope. The Act defines a "subsidiary of an insured credit union" to include a CUSO in which the credit union has an ownership interest or to which it has made a loan, along with certain service organizations and subsidiaries of state-chartered credit unions (§2(33)).^[1] Questions such as ownership by many credit unions, capital, and how the reserve and redemption standards apply to a CUSO are being settled in the NCUA rulemaking.^[4][5]
• Investment limits. NCUA's proposal would limit federally insured credit unions to investing in NCUA-licensed PPSIs.^[4]
• Reserves can be credit union shares. Reserves may include insured shares at an insured depository institution, subject to limits set by NCUA and the FDIC (§4(a)(1)(A)(ii)).^[1]