---
type: claim
title: GENIUS Act establishes payment stablecoins as non-securities under federal law
domain: internet-finance
secondary_domains:
  - grand-strategy
confidence: proven
date_claimed: 2025-03-18
source: "GENIUS Act (H.R. 1488, signed March 18, 2025); K&L Gates analysis; Congress.gov; CoinDesk coverage"
depends_on:
  - ooki-dao-proved-daos-without-legal-wrappers-face-general-partnership-liability
  - living-capital-howey-test-claim
---

The GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins), signed into law on March 18, 2025, explicitly exempts payment stablecoins from securities classification under federal law. The Act defines payment stablecoins as digital assets redeemable 1:1 for fiat currency, backed by high-quality liquid assets, and not paying yield to holders.

Key provisions:
- Payment stablecoins are classified as neither securities nor commodities under federal law
- Issuers must maintain 100% reserves in cash, Treasury securities, or central bank deposits
- Federal and state-chartered banks can issue stablecoins; non-bank issuers require OCC approval
- Regulations take effect by January 18, 2027 at latest

**Note on jurisdiction**: This establishes federal regulatory clarity, but does not preempt state money transmitter laws. State-level compliance requirements remain in effect, creating ongoing jurisdictional complexity for issuers.

**Implementation status (as of March 2026)**: The statutory framework is law, but operational rules are still being finalized by regulators. Legal clarity exists at the federal level, but practical implementation infrastructure is pending.

## Relevant Notes

- [[Living Capital Howey test claim]]
- [[Ooki DAO proved that DAOs without legal wrappers face general partnership liability]]
- [[Futarchy governance could enable markets to directly set organizational policy]]
- [[Internet-native capital formation requires regulatory creativity]]