---
type: source
title: "GENIUS Act: First US Stablecoin Regulatory Framework Signed Into Law"
author: "Multiple sources (Congress.gov, Elliptic, CoinDesk, K&L Gates)"
url: https://www.congress.gov/bill/119th-congress/senate-bill/1582
date: 2025-07-18
domain: internet-finance
secondary_domains: [grand-strategy]
format: legislation
status: unprocessed
priority: high
tags: [regulation, stablecoins, GENIUS-Act, US-law, crypto-legislation, digital-assets]
---

## Content

**The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins of 2025)** was signed into law on July 18, 2025 — the first comprehensive US stablecoin regulatory framework.

**Key Requirements:**
- Stablecoin issuers must back tokens with 1:1 reserves of cash or short-term US Treasuries
- Monthly reserve disclosure required
- Stablecoin holders receive legal protections if issuer goes insolvent
- Boundaries on who can issue stablecoins

**Critical Classification:**
- Permitted payment stablecoins are explicitly NOT securities under securities law
- However, issuers are subject to Bank Secrecy Act for AML purposes

**Implementation Timeline:**
- Supervisory agencies must publish implementing rules by July 18, 2026
- Regulations take effect by January 18, 2027 at latest

**Current Tensions (as of March 2026):**
- Stablecoin yield/rewards: The Act barred payment stablecoin issuers from paying interest, but yield allowance has become central to follow-up legislation (Digital Asset Market Clarity Act)
- Senators attempting to unlock stalled Clarity Act with compromise on stablecoin yield (CoinDesk, March 10, 2026)
- FDIC reportedly pushing interpretation that could restrict crypto-native stablecoin models (CoinDesk, Feb 26, 2026)

**Broader Significance:**
- First clear regulatory lane for crypto-native financial infrastructure in the US
- Sets precedent for how other digital assets may be regulated
- The "stablecoins are not securities" classification has direct implications for the broader ownership coin and futarchy-governed vehicle classification

## Agent Notes
**Why this matters:** The GENIUS Act is the single biggest regulatory development for internet finance in the past decade. It creates the first clear lane for stablecoin infrastructure, which is Layer 1 of the internet finance stack. Stablecoin clarity reduces one entire layer of regulatory uncertainty for Living Capital — capital pools can be denominated in regulated stablecoins.
**What surprised me:** The stablecoin yield prohibition. This creates tension with DeFi models that generate yield by deploying stablecoin reserves. If issuers can't pay interest, the "stablecoin as savings account" model is blocked — but yield may be unlocked via the Clarity Act.
**What I expected but didn't find:** Any mention of futarchy-governed or DAO-issued stablecoins. The law assumes centralized issuers. Decentralized stablecoin issuance (e.g., DAI-type models) may need separate treatment.
**KB connections:** Directly updates the regulatory uncertainty discussion in [[Internet finance is an industry transition from traditional finance where the attractor state replaces intermediaries with programmable coordination and market-tested governance]]. The "stablecoins are not securities" classification is relevant to [[Living Capital vehicles likely fail the Howey test for securities classification]] — if the underlying capital pool uses regulated stablecoins, one layer of classification risk disappears. Also connects to the adjacent-possible sequence in identity.md: "stablecoins establishing digital dollar equivalence" is now legally achieved.
**Extraction hints:** Key claim candidate: "The GENIUS Act's stablecoin-are-not-securities classification creates the first legal precedent for distinguishing crypto-native financial instruments from securities, potentially extending to other token types through the follow-up Digital Asset Market Clarity Act."
**Context:** This is actual law, not proposal or thesis. Highest epistemic weight possible for regulatory claims.

## Curator Notes (structured handoff for extractor)
PRIMARY CONNECTION: [[Internet finance is an industry transition from traditional finance where the attractor state replaces intermediaries with programmable coordination and market-tested governance]]
WHY ARCHIVED: First US crypto law signed — directly reduces the "regulatory uncertainty is primary friction" claim's force; updates the attractor state adjacent-possible sequence
EXTRACTION HINT: Focus on what this changes for the regulatory landscape discussion — stablecoin clarity is now ACHIEVED, shifting the primary uncertainty to token/securities classification and DAO legal wrappers
