The GENIUS Act: the US stablecoin law, explained

For most of their short life, dollar-backed digital coins lived in a legal gray zone: widely used, never properly regulated. In July 2025 that ended. The United States now has a stablecoin law on the books, and the deadline for its rules to take force is weeks away.

What is the GENIUS Act, in one sentence?

The GENIUS Act is the first United States federal law that sets binding rules for payment stablecoins, digital coins pegged one-to-one to a currency like the dollar. President Trump signed it on July 18, 2025, after it passed with rare bipartisan margins: 68 to 30 in the Senate, 308 to 122 in the House. The name is an acronym for Guiding and Establishing National Innovation for U.S. Stablecoins. The plain version: a coin marketed to the public as a digital dollar now has a rulebook it must follow, and regulators who can enforce it.

What does the law actually require?

The core of the act is short and strict. An issuer of a regulated payment stablecoin must meet five tests.

• Full backing, one to one. Every coin in circulation must be matched by at least an equal value of safe, liquid assets, like dollars, short-dated Treasury bills, or government money funds. The reserves cannot be lent out or reused.
• Monthly proof. Issuers must publish the composition of those reserves every month, so anyone can check the backing is really there.
• No interest to holders. An issuer cannot pay you any yield or interest for holding its coin. This one line shapes the whole market, and we come back to it below.
• Rules against dirty money. Issuers fall under the Bank Secrecy Act, must run anti-money-laundering and sanctions checks, and must be able to freeze or burn coins when a court lawfully orders it.
• Holders first if it fails. If an issuer goes bankrupt, the people holding its coins are paid before any other creditor.

Who is allowed to issue a stablecoin?

Not just anyone. The law opens three lanes: a subsidiary of an insured bank, a federal nonbank issuer approved by the Office of the Comptroller of the Currency (the national bank regulator, the OCC), or an issuer licensed under a state regime. The size of the issuer decides who watches it. A state-licensed issuer can stay under state supervision only while its coins in circulation total less than 10 billion dollars. Past that line it has to move to federal oversight within 360 days, or win a waiver. The effect is deliberate: the largest issuers answer to Washington, while smaller ones can start under their home state.

Why does the “no interest” rule matter?

It is the most consequential sentence in the law, and the least discussed. By banning yield, Congress drew a hard line: a regulated stablecoin is a way to pay, not a way to save. It is meant to behave like cash sitting in a digital wallet, not like a bank account that pays you to keep money there.

That choice has trade-offs worth naming honestly. It protects banks, whose deposits fund most lending, and it arguably protects consumers, by stopping a payment coin from quietly turning into an unregulated investment. But it also caps how appealing a compliant coin can look next to a savings account. Yield, if a user wants it, now has to come from somewhere the coin itself, by law, will not provide.

What changes in 2026?

The law passed in 2025, but most of its machinery switches on in 2026. The GENIUS Act gave regulators one year from signing to write the detailed rules, which sets the deadline at July 18, 2026. The OCC published its proposed rules in March 2026, and other agencies are finishing theirs. The act itself takes full effect on the earlier of two dates: 18 months after signing, or 120 days after the final rules are published. So 2026 is the year the framework stops being a statute and becomes day-to-day practice.

What does it mean if you just use a dollar coin?

Mostly, more confidence in what you are holding. A coin issued under these rules is fully backed and audited monthly, and structured so that you, the holder, are first in line if anything goes wrong. It does not pay you interest, and that is by design. Europe took a parallel route with its own crypto rulebook, MiCA.

It also matters for the apps built on these coins. Spliz, for one, settles group expenses in USDC, a fully reserved dollar coin, and your money stays in your own wallet rather than the app’s. The clearer the rules under a coin, the less a normal user has to think about it.

The one-line version

The headline is not that crypto won or lost. It is that the dollar got a digital format with a rulebook, and the rulebook reads a lot like the one for cash.

A stablecoin used to be a promise. The GENIUS Act turns it into a regulated one.

Sources

• The White House, fact sheet on the GENIUS Act’s reserve, disclosure and anti-money-laundering requirements (July 2025).
• Congress.gov, the text of S.1582 (GENIUS Act) and its enactment record.
• Paul Hastings LLP, section-level guide to issuer categories, the 10 billion dollar threshold, the no-yield rule and the effective-date timeline.
• Federal Register, the OCC’s proposed rule implementing the GENIUS Act (March 2, 2026).