---
type: entity
entity_type: regulation
name: "GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins of 2025)"
domain: internet-finance
secondary_domains: [grand-strategy]
status: active
legislation_number: "S.1582 (119th Congress)"
signed_date: 2025-07-18
implementation_deadline: 2027-01-18
key_provisions:
  - "1:1 reserve backing (cash or short-term Treasuries)"
  - "Monthly reserve disclosure required"
  - "Stablecoins explicitly NOT securities"
  - "Insolvency protections for holders"
  - "Interest payment prohibition for issuers"
  - "Bank Secrecy Act AML compliance required"
tracked_by: rio
created: 2026-03-11
related:
- GENIUS Act freeze/seize requirement creates mandatory control surface that conflicts with autonomous smart contract payment coordination
- genius-act-public-company-restriction-creates-asymmetric-big-tech-barrier-while-permitting-private-non-financial-issuers
- GENIUS Act reserve custody rules create indirect banking system dependency for nonbank stablecoin issuers without requiring bank charter
- GENIUS Act stablecoin yield prohibition reveals rent-protection motive because White House economists find negligible lending protection ($2.1B baseline, $531B worst-case) while consumers lose $800M annually in forgone yield
reweave_edges:
- GENIUS Act freeze/seize requirement creates mandatory control surface that conflicts with autonomous smart contract payment coordination|related|2026-04-18
- genius-act-public-company-restriction-creates-asymmetric-big-tech-barrier-while-permitting-private-non-financial-issuers|related|2026-04-18
- GENIUS Act reserve custody rules create indirect banking system dependency for nonbank stablecoin issuers without requiring bank charter|related|2026-04-18
- GENIUS Act stablecoin yield prohibition reveals rent-protection motive because White House economists find negligible lending protection ($2.1B baseline, $531B worst-case) while consumers lose $800M annually in forgone yield|related|2026-05-11
---

# GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins of 2025)

The first comprehensive US federal regulatory framework for stablecoins, signed into law on July 18, 2025. The Act establishes reserve requirements, classification standards, and consumer protections for payment stablecoins while explicitly excluding them from securities law.

## Overview

The GENIUS Act creates a regulatory safe harbor for "permitted payment stablecoins" — tokens backed 1:1 by cash or short-term US Treasuries, with monthly public reserve disclosure. The Act's most significant provision is the explicit exclusion of these stablecoins from securities classification, creating the first statutory precedent for distinguishing crypto-native financial instruments from securities based on functional characteristics.

Key tensions as of March 2026 include stablecoin yield restrictions (issuers cannot pay interest) and FDIC interpretations that may restrict crypto-native models. Follow-up legislation (Digital Asset Market Clarity Act) is attempting to address the yield prohibition through compromise language.

## Timeline

- **2025-07-18** — GENIUS Act signed into law by President, establishing first US stablecoin regulatory framework
- **2026-07-18** — Implementation deadline: supervisory agencies must publish implementing rules
- **2027-01-18** — Regulations take full effect (latest possible date)

## Relationship to KB

- genius-act-establishes-stablecoins-are-not-securities-classification-creating-first-legal-precedent-for-crypto-native-financial-instruments — statutory precedent for functional exemptions
- genius-act-stablecoin-yield-prohibition-creates-structural-tension-between-regulatory-compliance-and-defi-economics — yield restriction implications
- genius-act-reserve-requirements-establish-1-to-1-backing-with-cash-or-treasuries-as-statutory-standard-for-payment-stablecoins — reserve standards
- Internet finance is an industry transition from traditional finance where the attractor state replaces intermediaries with programmable coordination and market-tested governance — stablecoin layer now has regulatory clarity
- Living Capital vehicles likely fail the Howey test for securities classification — precedent for functional carve-outs from securities law