GENIUS Act Definition

The GENIUS Act is a United States law signed in July 2025 that sets the first federal rules for dollar-pegged stablecoins. It creates a clear legal framework for how stablecoin issuers operate, what they must hold in reserves, and how they disclose information to the public.

Full name and core goal

GENIUS stands for Guiding and Establishing National Innovation for U.S. Stablecoins. The law’s main goal is to bring transparency, safety, and regulatory clarity to stablecoins so regular users, businesses, and institutions can use them with more confidence.

What counts as a stablecoin here

In the context of the Act, a stablecoin is a crypto token designed to keep a steady value, usually by tracking the U.S. dollar. People use stablecoins to move money on blockchains without wild price swings.

Core requirements for issuers

• Reserves and backing. Issuers must back stablecoins one-to-one with eligible assets, such as cash and short-term U.S. Treasury securities. Several explanations stress that reserves cannot rely on crypto collateral or leverage.
• Disclosures and audits. Issuers must publish regular public reports on reserves and submit to routine audits. Some guidance highlights an extra annual audit requirement for very large issuers.
• Consumer priority in a failure. If an issuer becomes insolvent, stablecoin holders get senior rights to the reserves ahead of other creditors.
• Marketing and conduct rules. Issuers cannot suggest their stablecoins have government insurance or backing.
• Compliance controls. Issuers must follow anti-money-laundering and sanctions rules. Materials also describe having the technical ability to act on lawful freeze or burn orders.

Who oversees what

The law splits oversight by issuer type and size. Stand-alone stablecoin companies are supervised at the federal level by the Office of the Comptroller of the Currency, while banks and similar institutions remain under their usual federal regulators. Issuers above a large-scale issuance threshold fall under federal supervision, and smaller issuers can choose state oversight.

Why it matters

Backers of the law expect clearer rules to unlock new uses for stablecoins and make payment flows faster and cheaper for commerce. They also see a path for broader participation from banks, fintechs, and businesses once compliance expectations are clear. At the same time, the investor-facing guidance notes that rules cannot remove market risks in crypto, so asset prices may still move sharply.