GENIUS Act Implements U.S. Federal Stablecoin Regulation

The GENIUS Act Establishes U.S. Federal Framework for Stablecoins

The GENIUS Act, effective July 18, 2025, establishes the United States’ inaugural regulatory framework for payment stablecoins, triggering controversy over regulatory arbitrage and interest rate gaps. This new legislation mandates issuers to maintain 1:1 reserves and undergo routine audits.

The GENIUS Act, signed on July 18, 2025, establishes the first U.S. federal framework for payment stablecoins, raising industry controversy over regulatory loopholes.

The GENIUS Act shapes stablecoin regulation, impacting market operations and compliance. The U.S. Treasury Secretary leads the review, with state and federal oversight, affecting future regulatory actions.

The Act, signed into law, institutes the first U.S. federal framework for payment stablecoins . Enacted on July 18, 2025, major regulatory bodies supervise issuers, addressing loopholes and market compliance.

Stablecoins such as USDC, USDT, and DAI are directly affected. The Act demands that issuers maintain 1:1 reserves and undergo regular audits. Compliance challenges may arise surrounding interest-bearing stablecoin products.

Chuck Bell, Advocacy Program Director, Consumer Reports, said, “Stablecoins should help consumers—not put them in harm’s way. Consumers increasingly encounter stablecoins in apps, wallets, and digital platforms—and they deserve clear rules and real protections.” – Consumer Reports Press Release

The legislation impacts regulatory supervision and stablecoin liquidity. Organizations like Consumer Reports express concern about consumer protections lacking consistent safeguards akin to traditional financial products.

Expert analysts suggest it will create growth opportunities with regulatory clarity. However, unresolved loopholes could lead to interest-bearing stablecoin product challenges. The Act signals continued scrutiny of digital asset regulations.