The Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act) is the first federal law for payment stablecoins in the United States. It was signed into law on 18 July 2025 as Public Law 119-27. It sets who may issue a payment stablecoin, what must back it, how holders are protected and which anti-money laundering (AML) and sanctions duties apply.
A payment stablecoin, in the Act's words, is a digital asset designed to be used for payment or settlement, which the issuer is obliged to redeem for a fixed amount of money and which it represents will hold a stable value. Bank deposits recorded on a blockchain, national currencies and securities are outside the definition.
The Act matters to four groups: issuers, the exchanges and wallets that distribute stablecoins, the custodians and infrastructure firms that support them, and foreign issuers that want access to US customers. This guide sets out what each must have in place and when.
The Act takes effect on the earlier of 18 months after enactment, which is 18 January 2027, or 120 days after the primary federal regulators issue final implementing rules. The regulators were required to issue those rules within one year, by 18 July 2026. They did not finalise them by that date, and as at October 2026 every implementing rule is still a proposal. Firms should plan on 18 January 2027 as the effective date.
| Date | Event |
|---|---|
| 18 July 2025 | GENIUS Act signed into law |
| 18 July 2026 | Statutory deadline for implementing rules (not met; rules remain proposals) |
| 18 January 2027 | Latest effective date of the Act |
| 18 January 2028 | Latest date for each state regulator's first certification to the Stablecoin Certification Review Committee (one year after the effective date) |
| 18 July 2028 | Digital asset service providers may no longer offer or sell non-permitted payment stablecoins to people in the US |
| Agency | Proposal | Published |
|---|---|---|
| Treasury | Advance notice seeking views on implementation | September 2025 |
| FDIC | Applications by subsidiaries of FDIC-supervised banks | 19 December 2025 |
| NCUA | Licensing of credit union stablecoin subsidiaries | 12 February 2026 |
| OCC | Full framework for issuers under OCC supervision, including non-banks | 2 March 2026 |
| Treasury | Principles for substantially similar state regimes | 3 April 2026 |
| FDIC | Reserves, redemption, capital and risk management standards | 10 April 2026 |
| FinCEN and OFAC | AML and sanctions compliance programmes for permitted issuers | 10 April 2026 |
| FinCEN with the banking agencies | Customer identification programme for permitted issuers | 22 June 2026 |
| Treasury | Issuance, offer and sale of payment stablecoins | 18 August 2026 |
| Federal Reserve | Framework for Board-supervised issuers and the tying prohibition | 29 September 2026 |
The proposals follow the Act closely, so a firm that builds to the statute and the OCC proposal now will need only limited changes when the final rules arrive.
From the effective date it is unlawful for anyone other than a permitted payment stablecoin issuer to issue a payment stablecoin in the United States. Knowing participation in an unlawful issuance carries a fine of up to $1 million per violation and up to five years in prison. There are three kinds of permitted issuer:
A digital asset service provider is a business that, for payment, exchanges, transfers or holds digital assets for customers in the United States. Exchanges, brokers and custodial wallets are included; a distributed ledger protocol itself is not. From 18 July 2028 these businesses may offer or sell only stablecoins issued by permitted issuers, or by foreign issuers that meet the Act's conditions. Treasury's August 2026 proposal would also treat an issuer doing business in the US as a digital asset service provider.
Custody of payment stablecoins, their private keys or their reserves may only be provided by an entity supervised by a federal or state financial regulator. Infrastructure firms that run issuance and redemption systems for an issuer take on the issuer's duties by contract.
A foreign issuer may reach US customers if Treasury finds its home regime comparable, it registers with the OCC, it holds enough reserves in US financial institutions to meet US redemptions, and it can comply with US lawful orders, including freezes.
A platform that moves stablecoins between customers is not an issuer, but it is a money transmitter. It needs FinCEN registration and state licences, covered in our guide to the US money transmitter licence for stablecoin companies.
The Act gives a payment stablecoin issued by a permitted issuer a clear legal position, which is what banks, institutional clients and accountants have been waiting for:
This clarity is the main commercial reason to become a permitted issuer early. Banks and payment networks can hold, settle and distribute a permitted stablecoin without the case-by-case legal analysis that applied before the Act.
| Route | Regulator | Suits |
|---|---|---|
| Bank or credit union subsidiary | FDIC, Federal Reserve, OCC or NCUA, by parent | Banks and credit unions issuing their own stablecoin |
| Federal qualified issuer | OCC | Non-bank issuers seeking one national licence and unlimited scale |
| State qualified issuer | Certified state regulator | Issuers up to $10 billion outstanding with an established state relationship |
The OCC route gives one national licence, and the Act overrides state charter and licensing requirements for issuance. A regulator must decide an application within 120 days of receiving a substantially complete one; if it does not, the application is treated as approved. A denial must be explained in writing, and the applicant can request a hearing.
An issuer with up to $10 billion outstanding may choose a state regime if the Stablecoin Certification Review Committee, made up of the Treasury Secretary, the Federal Reserve Chair or Vice Chair for Supervision and the FDIC Chair, certifies it as substantially similar to the federal framework. Above $10 billion the issuer has 360 days to move to federal oversight unless a waiver is granted. A state qualified issuer can serve customers in other states without a separate issuer licence in each.
Treasury's proposal of 3 April 2026 sets the broad principles a state regime must meet to be certified. A state may differ from the federal framework in form and procedure, but it must apply the Act's substantive standards on reserves, redemption, disclosure, AML and holder protection. Each state regulator must submit its first certification no later than one year after the Act takes effect, and recertify every year.
A public company whose business is not mainly financial may not issue a payment stablecoin unless the Committee agrees unanimously that it will not pose material risk, and it meets data privacy and conflict-of-interest conditions.
Every permitted issuer must keep identifiable reserves of at least one dollar for every stablecoin in circulation. Reserves are limited to the assets in the table below.
| Permitted reserve asset | Condition |
|---|---|
| US coins and currency, and balances at a Federal Reserve Bank | None |
| Demand deposits at insured banks or credit unions | Subject to FDIC and NCUA limits |
| Treasury bills, notes and bonds | Remaining maturity, or original maturity, of 93 days or less |
| Repurchase agreements | Overnight, backed by Treasury bills of 93 days or less |
| Reverse repurchase agreements | Overnight, collateralised by Treasuries, tri-party, centrally cleared or with a creditworthy counterparty |
| Government money market funds | Invested only in the assets above |
| Other federal government assets | Only if the regulator approves |
| Tokenised forms of the above | Must comply with applicable law |
Reserves may not be pledged, rehypothecated or reused except for the limited liquidity purposes the Act allows, such as overnight repurchase agreements. In an insolvency, stablecoin holders rank ahead of all other creditors on the reserves. Corporate bonds, equities and other investments cannot back a payment stablecoin.
The issuer publishes on its website each month the total stablecoins outstanding and the amount and composition of its reserves, including the average maturity and where the reserves are held. A registered public accounting firm examines each monthly report, and the chief executive and chief financial officer certify its accuracy to the regulator. An issuer with more than $50 billion outstanding also prepares annual financial statements under US accounting standards, audited by a registered public accounting firm and published.
The Act requires each regulator to set capital, liquidity and operational risk standards tailored to the issuer's business, and no more than is needed for safe operation. The OCC proposal of March 2026 sets capital requirements both for a newly formed issuer and on an ongoing basis, alongside liquidity and operational risk standards. The FDIC proposal of April 2026 covers the same ground for bank subsidiaries and confirms that reserve deposits are insured to the issuer as a corporate depositor, not passed through to each holder.
Until the final rules set the figures, issuers should model capital on the OCC proposal and hold liquidity well above the monthly redemption peak. The final calibration will be confirmed when the rules are issued.
Regulators will expect a board-approved framework that covers the main risks of running a stablecoin:
A permitted issuer is a financial institution under the Bank Secrecy Act, with the same AML, customer identification and sanctions duties as a US bank. FinCEN and OFAC proposed the detailed programme rules on 10 April 2026. The proposal is modelled on the bank programme and includes:
The proposal would not require an issuer to monitor or report every secondary-market trade between other parties, but it does expect the issuer to understand the risk in its distribution channels. A separate joint proposal of 22 June 2026 sets the customer identification programme. Issuers also certify to their regulator that the AML and sanctions programmes are in place and reasonably designed, first after approval and then annually.
The firm's financial crime practice writes these programmes and tests them before the regulator does.
The Act requires an issuer to have the technical ability, policies and procedures to block, freeze and reject specific transactions that breach federal or state law, and to comply with lawful orders. In practice this means smart contract functions for freezing addresses and for seizing or burning tokens under a court order, with key management that lets the issuer act quickly and keeps those powers under tight control.
An issuer must publish a clear redemption policy that lets holders redeem at par in a timely way, and must disclose all redemption fees, which can only be changed with at least seven days' notice. Holders must be able to see the timescale, any minimum amount and how to make a request.
Holder protections in the Act include:
Regulators examine permitted issuers and can suspend issuance, restrict activities, impose civil penalties or revoke approval.
Treasury decides whether a foreign regime is comparable to the GENIUS Act, looking at reserves, consumer protection, AML and sanctions enforcement, and supervisory capability. The Act also directs Treasury to pursue reciprocal arrangements with other jurisdictions.
A foreign issuer from a comparable regime registers with the OCC, holds enough reserves in US financial institutions to meet US redemptions, and shows it can comply with US lawful orders. Issuers authorised under MiCA in the EU, or under the regimes now in force or being built in Hong Kong, Singapore and the UK, are the most likely candidates. Our MiCA stablecoin licence guide covers the EU side.
A custodian holding reserves keeps them separate from its own assets and from other clients' assets, does not lend or reuse them, and gives the issuer the daily data it needs for reconciliation and the monthly report. It must itself be supervised by a federal or state financial regulator.
A platform that routes stablecoin payments for merchants, cross-border senders or treasury clients needs sanctions screening and transaction monitoring on every flow, and from 18 July 2028 it may route only permitted stablecoins for US customers. It usually remains a money transmitter under state law.
Providers of the minting, redemption and wallet technology for an issuer should expect the issuer's regulator to review their service. Contracts should cover the freezing functions, availability of data for investigations, security standards, disaster recovery and change management, with clear allocation of each GENIUS Act duty.
| Area | What the regulator looks for |
|---|---|
| Licensing route | A clear choice of OCC, bank subsidiary or state route, with a plan for the $10 billion threshold |
| Reserves | At least 1:1 backing in permitted assets only, reconciled daily |
| Monthly report | Published on the website, examined by a registered public accounting firm, certified by the CEO and CFO |
| Redemption | Published policy, timely redemption at par, fees disclosed with seven days' notice of change |
| Capital and liquidity | Levels set against the OCC or FDIC proposal and stress-tested |
| AML programme | Board-approved, risk-based, with a US-based AML officer, independent testing and training |
| Sanctions | OFAC programme with wallet screening and geolocation controls |
| Lawful orders | Tested ability to block, freeze and reject transactions |
| Marketing | No yield, no deposit insurance claims, no suggestion of government backing |
| Custody | Reserves with a supervised custodian, segregated and not reused |
Capital figures will be set by the final rules. The budget lines that every issuer can plan now are:
| Workstream | Typical time |
|---|---|
| Gap analysis against the Act and the OCC proposal | 4 to 6 weeks |
| Reserve, custody and reporting framework | 2 to 4 months |
| AML, sanctions and blockchain controls | 3 to 6 months |
| Regulator decision after a complete application | Up to 120 days |
Building the full programme in-house typically takes 12 months or more. Working with experienced advisers and existing vendors shortens it, and firms that start now can file as soon as the final rules are issued.
Choose between the OCC, a bank subsidiary and a state route, model capital and reserves on the OCC proposal, and plan for the $10 billion transition if starting under a state regime. Prepare the application so it can be filed on the effective date.
List every stablecoin offered to US customers, confirm each issuer's status, and plan to remove non-permitted stablecoins before 18 July 2028. Keep state money transmitter licences and FinCEN registration current.
Confirm the custodian is supervised by a federal or state regulator, and write the issuer's GENIUS Act duties, including freezes and reporting, into the service agreement.
Track Treasury's comparability work, prepare the OCC registration, and set up US custody for reserves. Our global stablecoin licence guide compares the home regimes.
Intermediaries that also need state licences can combine this with the firm's US money transmitter licence service.
On the earlier of 18 January 2027 or 120 days after the regulators issue final rules. As at October 2026 the rules are still proposals, so 18 January 2027 is the working date.
It is law. It was signed on 18 July 2025 as Public Law 119-27; only the implementing rules are still at the proposal stage.
The OCC route gives one national licence with no state issuer licences. The state route is open to issuers with up to $10 billion outstanding in a certified state, with a 360-day move to federal oversight above that.
Cash, balances at a Federal Reserve Bank, insured deposits, Treasuries with 93 days or less to maturity, overnight repos and reverse repos, government money market funds holding those assets, and tokenised forms of them.
No. The Act prohibits a permitted or foreign issuer from paying holders any interest or yield.
Yes. From 18 July 2028 they may offer or sell to US persons only stablecoins issued by permitted issuers or qualifying foreign issuers.
Yes, if Treasury finds their home regime comparable, they register with the OCC, hold enough reserves in US institutions and can comply with US lawful orders.
Knowingly issuing or participating in issuance without permission carries a fine of up to $1 million per violation and up to five years in prison.
Buckingham Capital Consulting has handled payments, e-money and cryptoasset licensing since 2013, obtaining FCA authorisations for firms including Nexpay, Orbital, Dzing Finance and Hryze, and prepares GENIUS Act readiness programmes for stablecoin issuers, platforms and infrastructure providers. The firm builds the reserve, AML and sanctions frameworks that the OCC and state regulators examine, alongside the FinCEN and state money transmitter licences intermediaries still need.
Speak to an expert: WhatsApp +44 7563 115980, Telegram @buckinghamcapital or info@buckinghamcapitalconsulting.co.uk.
This article is general information, reviewed against the regulator’s published requirements on the date shown. It is not legal advice; the regulator’s current publications take precedence.