GENIUS Act
- Bill Number
- S. 1582
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Became Law
- Became Law
- Public Law 119-27
- Latest Action
- 2025-07-18: Became Public Law No: 119-27.
- Last Updated
- 2026-03-12T15:11:43Z
AI-Generated Summary
Summary of S. 1582: Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act)
Purpose
The GENIUS Act aims to create a comprehensive federal regulatory framework for payment stablecoins—digital assets designed for payments or settlements that maintain a stable value relative to a fixed amount of money (e.g., the U.S. dollar), backed by reserves. It seeks to promote innovation in digital payments while ensuring financial stability, consumer protection, and compliance with anti-money laundering (AML) and sanctions laws. The law limits issuance to approved entities, sets safety standards, and clarifies that compliant stablecoins are not securities or commodities.
Key Provisions
- Definitions and Scope:
- Defines key terms like payment stablecoin (a digital asset redeemable for fixed monetary value, excluding national currencies, deposits, or securities), permitted payment stablecoin issuer (U.S.-based entities approved by federal or state regulators, including bank subsidiaries, federal charters, or state-approved nonbanks), and digital asset service provider (entities handling exchanges, transfers, or custody of digital assets for profit, excluding certain protocols or self-custody tools).
- Excludes algorithmic or non-reserve-backed stablecoins from this framework.
- Issuance Restrictions:
- Only permitted issuers may issue payment stablecoins in the U.S.; others are prohibited, with fines up to $1,000,000 and up to 5 years imprisonment for knowing violations.
- After 3 years, digital asset service providers cannot offer or sell non-permitted stablecoins to U.S. persons, except under limited safe harbors for small volumes or emergencies.
- Foreign issuers may operate if they meet comparable standards, register with regulators, hold U.S. reserves, and comply with lawful orders (e.g., freezing assets).
- Issuer Requirements:
- Maintain 1:1 reserves in low-risk assets (e.g., U.S. currency, short-term Treasury securities, or government money market funds); reserves cannot be reused except for limited liquidity needs.
- Publicly disclose monthly reserve composition, redemption policies (with clear fees and timely procedures), and undergo CEO/CFO certification plus audits by independent accountants.
- Comply with AML laws (treated as financial institutions), sanctions, capital/liquidity rules tailored to risk, and operational standards; no interest payments to holders.
- Limit activities to issuance, redemption, reserve management, and custody; prohibit tying stablecoins to other products or deceptive marketing (e.g., implying U.S. government backing).
- Non-financial public companies need special committee approval to issue, with data privacy limits.
- Approval and Supervision:
- Federal regulators (e.g., Comptroller of the Currency, Federal Reserve, FDIC) approve bank subsidiaries and federal/nonbank issuers within 120 days, based on financial strength, management integrity, and safety.
- State regulators can supervise smaller issuers (under $10 billion outstanding) if their regime is certified as comparable by a federal committee; larger issuers transition to joint federal-state oversight.
- Ongoing examinations, reporting, and enforcement powers, including cease-and-desist orders, removals, and civil penalties up to $100,000+ per day.
- Custody of reserves/keys limited to supervised entities; customer assets must be segregated and prioritized.
- Insolvency Protections:
- In bankruptcy, stablecoin holders have first priority over reserves; automatic stay exceptions allow redemptions if reserves suffice.
- Amends U.S. Bankruptcy Code to define terms and prioritize claims, with regulators intervening to protect customers.
- Other Measures:
- Promotes interoperability standards for stablecoins and digital systems.
- Studies on AML innovations, non-payment stablecoins, and insolvency gaps; annual industry reports.
- Banks/credit unions can issue or custody stablecoins without new capital rules for custody activities.
- Reciprocity for foreign regimes; Treasury can waive restrictions for national security.
- Rulemaking and Effective Date:
- Regulators must issue rules within 1 year; act effective 18 months post-enactment or 120 days after final rules.
Significant Changes to Existing Law
- Securities and Commodities Laws: Amends the Securities Act (1933), Exchange Act (1934), Investment Company/Advisers Acts (1940), SIPA (1970), and Commodity Exchange Act to explicitly exclude compliant payment stablecoins from definitions of "security" or "commodity," preventing SEC/CFTC oversight as investments (though bonds/notes from issuers remain possible securities).
- Bankruptcy Code: Adds priorities for stablecoin holders (Title 11, U.S. Code), excludes reserves from estate property while applying stays, and allows regulator intervention.
- Bank Secrecy Act and Sanctions: Treats issuers as financial institutions, mandating AML programs and compliance with Treasury blocking orders.
- Preemption: Supersedes state licensing for federal issuers; allows certified state regimes for small issuers but mandates federal transition for large ones.
- Ethics and Disclosures: Prohibits felons from leadership roles; bars misleading insured status claims; updates financial disclosure rules to include small stablecoin holdings.
Potential Impacts
- Government Agencies: Increases workload for Treasury, Federal Reserve, FDIC, OCC, and NCUA in approvals, examinations, and rulemaking; creates a Stablecoin Certification Review Committee (chaired by Treasury Secretary) for state/foreign certifications. Enhances AML/sanctions enforcement via coordination and tech requirements.
- Citizens/Consumers: Improves stablecoin safety through reserves and disclosures, reducing run risks; prioritizes redemptions in failures, protecting holders (e.g., everyday users for payments). Limits data misuse by non-financial issuers but allows banks broader digital services.
- International Relations: Enables reciprocity with comparable foreign regimes, potentially boosting U.S. dollar dominance in global digital payments; restricts non-compliant foreign stablecoins, aiding sanctions enforcement but risking trade tensions. Requires reports on high-risk jurisdictions.
Main Stakeholders Affected
- Issuers and Financial Institutions: Banks, credit unions, and nonbanks (e.g., fintechs) gain clear paths to issue/custody stablecoins; must meet reserves and compliance, with smaller state entities benefiting from dual oversight.
- Consumers and Users: Individuals/ businesses using stablecoins for payments benefit from stability and protections; digital asset service providers (e.g., exchanges) face restrictions on non-permitted products.
- Regulators: Federal (OCC, Fed, FDIC, Treasury) and state agencies handle supervision; SEC/CFTC lose jurisdiction over compliant stablecoins.
- Foreign Entities: Overseas issuers need registration and compliance for U.S. access; high-risk jurisdictions face bans.
- Broader Economy: Payment networks, blockchain developers, and AML tech providers see opportunities in interoperability and innovation studies.
Notable Legal, Constitutional, or Political Implications
- Legal: Clarifies regulatory silos (banking vs. securities), reducing litigation over stablecoin classification; strengthens AML/sanctions via tech mandates (e.g., freezing capabilities), but preserves state consumer protections. Extraterritorial reach targets U.S.-facing foreign conduct.
- Constitutional: No direct challenges noted; aligns with Congress's commerce clause authority over finance and interstate payments. Judicial review provided for denials/rescissions, upholding due process.
- Political: Positions U.S. as a leader in digital asset regulation, balancing innovation (e.g., bank involvement) with risk controls amid crypto debates. May influence global standards but could face criticism for favoring banks over pure fintechs or limiting decentralization. Requires congressional reports, enabling oversight.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (5)
Sen. Lummis, Cynthia M. [R-WY], Sen. Scott, Tim [R-SC], Sen. Sullivan, Dan [R-AK], Sen. Moreno, Bernie [R-OH], Sen. Ricketts, Pete [R-NE]
Recent Actions
- 2025-07-18: Became Public Law No: 119-27.
- 2025-07-18: Became Public Law No: 119-27.
- 2025-07-18: Signed by President.
- 2025-07-18: Signed by President.
- 2025-07-17: Presented to President.
- 2025-07-17: Presented to President.
- 2025-07-17: Motion to reconsider laid on the table Agreed to without objection.
- 2025-07-17: On passage Passed by the Yeas and Nays: 308 - 122 (Roll no. 200). (text: CR H3405-3418) (Roll call 200)
- 2025-07-17: Passed/agreed to in House: On passage Passed by the Yeas and Nays: 308 - 122 (Roll no. 200). (Roll call 200)
- 2025-07-17: Considered as unfinished business. (consideration: CR H3449-3450)
- 2025-07-17: POSTPONED PROCEEDINGS - At the conclusion of debate on S. 1582, the Chair put the question on passage of the bill and by voice vote, announced that the ayes had prevailed. Ms. Waters demanded the yeas and nays and the Chair postponed further proceedings until a time to be announced.
- 2025-07-17: The previous question was ordered pursuant to the rule.
- 2025-07-17: DEBATE - The House proceeded with one hour of debate on S. 1582.
- 2025-07-17: Rule provides for consideration of H.R. 4016, H.R. 3633, H.R. 1919 and S. 1582. The resolution provides for consideration of H.R. 4016 and H.R. 3633 under a structured rule, and H.R. 1919 and S. 1582 under a closed rule, with one hour of general debate on each bill. The resolution provides for a motion to recommit on H.R. 4016, H.R. 3633, and H.R. 1919, and a motion to commit on S. 1582.
- 2025-07-17: Considered under the provisions of rule H. Res. 580. (consideration: CR H3405-3427)
Bill Versions
- Guiding and Establishing National Innovation for U.S. Stablecoins Act — issued 2025-07-18 — PDF (48 pages)
- Guiding and Establishing National Innovation for U.S. Stablecoins Act — issued 2025-06-17 — PDF (134 pages)
- Guiding and Establishing National Innovation for U.S. Stablecoins Act — issued 2025-05-05 — PDF (122 pages)