The GENIUS Act takes effect on January 18, 2027, introducing a federal regulatory framework for payment stablecoins that will reshape how issuers operate and how banks participate in the digital-dollar market. Signed into law on July 18, 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act establishes who can issue stablecoins and what standards they must meet.
Who Can Issue Stablecoins Under the New Framework
Payment stablecoins can generally be issued only by permitted payment stablecoin issuers, which include eligible subsidiaries of insured depository institutions, federally qualified nonbank issuers, and qualifying state-regulated issuers. Regulatory responsibilities are divided among federal and state authorities, with the Office of the Comptroller of the Currency (OCC) supervising issuers under its jurisdiction, while the Federal Reserve and FDIC oversee entities within their respective mandates.
Reserve and Redemption Requirements
Issuers must maintain eligible reserve assets worth at least 100% of their outstanding payment stablecoins. Permitted assets include U.S. currency, qualifying bank deposits, short-term Treasury securities, certain repurchase agreements, and government money market funds. Issuers must publish monthly disclosures detailing reserve composition and establish clear redemption policies.
The OCC's final rule, issued October 21, 2026, adds liquidity and risk-management standards including a 5% daily-liquidity floor and requires reserve stress testing. Issuers must demonstrate that reserve assets can be monetized reliably under adverse conditions. The legislation also prohibits issuers from paying interest or yield to holders solely for holding or retaining their stablecoins.
Capital and Operational Standards
Stablecoin issuers under OCC supervision must meet a capital framework based on GAAP equity with specified deductions and maintain an ongoing $5 million minimum capital floor. Capital and operational requirements must be maintained at all times rather than assessed only at quarter-end. These standards could increase operating costs, particularly for smaller companies without established compliance teams or banking relationships.
New Opportunities for Banks
The GENIUS Act creates a formal route for eligible banking institutions to participate in stablecoin issuance through approved subsidiaries. Banks may issue payment stablecoins, hold reserve assets, provide digital asset custody, and support institutional payment services. However, participation requires regulatory approval and compliance with capital, operational, and risk-management standards.
Restrictions on Crypto Exchanges
Crypto exchanges and digital asset service providers must comply with new distribution rules. From July 18, 2028, digital asset service providers generally cannot offer or sell payment stablecoins to U.S. customers unless they are issued by permitted issuers or qualify under foreign-issuer provisions. Foreign-issued stablecoins face separate requirements beginning January 18, 2027, requiring foreign issuers to demonstrate technological capability to comply with lawful U.S. orders and meet applicable statutory conditions.
Outstanding Regulatory Questions
Several regulatory processes remain incomplete. Anti-money laundering, customer identification, and sanctions requirements are being addressed through additional rulemaking involving the Treasury Department and other federal agencies. The FDIC has issued proposals covering capital, reserve management, redemption, and custody for issuers under its supervision. The Treasury Department has proposed rules addressing the issuance, offer, and sale of payment stablecoins and the treatment of foreign issuers. These outstanding measures will influence licensing timelines, operational costs, and foreign stablecoin providers' ability to serve U.S. customers.
Key Implementation Dates
- July 18, 2025: GENIUS Act signed into law
- October 21, 2026: OCC issues final implementation rule
- January 18, 2027: GENIUS Act and OCC rule take effect
- January 18, 2028: State-regulator certification milestone
- July 18, 2028: Restrictions on certain non-permitted stablecoins begin
