U.S. Government Enacts GENIUS Act for Stablecoin Regulation

Updated 16:35 UTC

New Developments on the GENIUS Act

• The U.S. Treasury Department has proposed new rules for stablecoin issuers and digital asset service providers under the GENIUS Act.
• The proposal focuses on defining when a payment stablecoin is considered issued in the United States.
• Publication in the Federal Register is scheduled for August 18, with a 60-day comment period.
• Stablecoins are considered issued in the U.S. if the issuer is located in the country or if issued to someone in the U.S.
• Foreign issuers can avoid U.S. issuance classification if they take steps to ensure recipients are outside the U.S.
• The GENIUS Act is set to take effect on January 18, 2027, restricting payment stablecoin issuance without authorization.
• From July 18, 2028, digital asset service providers will be prohibited from selling stablecoins to U.S. residents unless they are from permitted issuers.
• Exemptions include direct transfers between individuals and transactions involving self-custody wallets.
• The Treasury is seeking feedback on various activities related to stablecoins, including airdrops and market makers.
• The GENIUS Act mandates that payment stablecoins maintain reserves on a one-to-one basis using eligible assets.

Updated 16:36 UTC

New Developments on the GENIUS Act

• Treasury Secretary Bessent has emphasized the U.S. Treasury's commitment to swiftly implement the GENIUS Act framework.
• The GENIUS Act aims to reinforce the U.S. dollar's position as the global reserve currency and maintain U.S. leadership in cryptocurrency.
• Stablecoins must be backed one-for-one by approved reserves, including cash and short-term Treasuries, under the GENIUS Act.
• Restrictions on interest payments to stablecoin holders are also mandated by the Act.
• The Treasury has proposed rules to ensure compliance with federal standards, including anti-money laundering and sanctions requirements.
• Market predictions indicate that the GENIUS Act's implementation may strengthen the U.S. dollar, potentially lowering gold price expectations for August 2026.
• Observers are advised to monitor the Federal Reserve's communications and upcoming economic data releases for insights into inflation and monetary policy.

Updated 17:02 UTC

New Developments on the GENIUS Act

The U.S. Department of the Treasury is actively seeking public input on the GENIUS Act, which was signed into law by President Donald Trump in 2025. This legislation establishes a framework for stablecoin regulation, allowing banks and other entities to issue stablecoins backed by assets such as U.S. Treasuries.

Key points include:

• The effective date of the GENIUS Act is set for January 18, 2027.
• Stricter prohibitions on the offer and sale of stablecoins will take effect on July 18, 2028.
• Individuals must obtain a federal or state license to issue payment stablecoins in the U.S. starting January 2027.

Treasury Secretary Scott Bessent emphasized the importance of regulatory clarity for businesses to innovate and maintain the U.S. dollar's status as the world's reserve currency. The consultation also seeks to clarify key terms and obligations for digital asset service providers.