What Does the Act Cover?
The Genius Stablecoin Act provides a comprehensive regulatory framework for stablecoin issuers operating in the US. The Law comprehensively addresses topics such as classification, definitions, issuance conditions, reserve asset requirements and legal obligations regarding stablecoins.
Definition and Purpose
- The law classifies stablecoins as payment instruments, not securities.
- The main objective is to enhance system security, protect consumer rights and ensure overall financial stability.
Who Can Issue Stablecoins?
- The law allows only entities holding a “Permitted Payment Stablecoin Issuer (PPSI)” license to issue stablecoins. This license will be issued by the Federal Reserve or an authorized state regulatory authority.
- According to the draft law, banks and certain fintech firms will also be able to issue stablecoins.
Reserve Asset Requirement
- A 1:1 ratio of reserve assets for each stablecoin is mandatory.
- Accepted reserve assets are:
- US dollar denominated cash and deposits
- Short-term Treasury bills
- Tokenizing government bonds
- High liquidity money market funds
Reporting and Transparency
- All issuers are obliged to report monthly on the reserve status and the amount of stablecoins in circulation.
- For issuers over $50 billion, an annual independent audit is required.
Consumer Protection
- In case of bankruptcy of issuers, stablecoin holders will be treated as priority creditors.
Within the framework of these articles, the stablecoin legislation update is not only a technical regulation, but also a reform that will institutionalize the sector by introducing a clear definition and licensing system at the federal level.
Where is the Genius Stablecoin Act Now?
The bill, introduced by Senator Bill Hagerty on February 4, 2025, aims to establish a federal licensing and oversight framework for stablecoin issuers. The bill was passed in the US Senate on June 17, 2025, with 68 yes / 30 no votes with strong bipartisan support. This development is considered to be a historic milestone for Stablecoin regulation 2025 in terms of the status of the Genius Stablecoin Act.
Currently, the bill has been submitted to the House of Representatives and is on the agenda as part of the “Crypto Week” to be held during the week of July 15, 2025. If the bill is voted in the House in its current form and the Senate version is adopted as is, it is highly likely that it will become law before August 2025.
Is Approval Expected in the House of Representatives?
Optimistic Scenario:
- As part of “Crypto Week”, if the Senate version of the bill is passed in full, it is expected to pass quickly through the House of Representatives with the support of Republicans and some moderate Democrats.
- In this case, the law will be submitted to the President for approval in July and will come into force as the cryptocurrency law of August 2025.
Alternative Scenario:
- If the GENIUS bill is reconciled with the “STABLE Act (H.R. 2392)”, an alternative legislation pending in the House of Representatives, the process could move to the conference committee stage.
- In this scenario, the stablecoin regulatory update process may be delayed to September-October 2025.
Overall Assessment and Forecast
As a result, the stablecoin regulatory update will provide clarity for issuers operating both domestically and internationally in the US and will increase investor confidence by removing regulatory uncertainty in the sector. The legislation will also contribute to the creation of a robust digital currency infrastructure that is integrated with the banking system.
If the House of Representatives approves the Senate-passed text without amendments, the bill is likely to be signed by President Trump and enter into force in August 2025. However, if alternative regulatory proposals (STABLE Act) are tabled and extensive amendments are requested, the adoption of the law may be delayed until September-October 2025.
Disclaimer
This content is provided for informational purposes only and does not constitute legal, financial, or investment advice. The information regarding the Genius Stablecoin Act is based on the current draft legislation and publicly available sources. Legislative provisions may change during the approval process. Readers are strongly encouraged to consult with a qualified legal or financial advisor before making any investment decisions or engaging in activities related to stablecoin issuance. No guarantee is made regarding the accuracy or timeliness of the information presented.
