On 18 July 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) was signed into law. This marked the first significant legislation in the United States to oversee digital currency, specifically regulating the $250 billion stablecoin market. This established the first comprehensive regulatory framework for payment stablecoins—digital assets tied to a fixed value, such as the dollar, and used for transactions.  

What is the GENIUS Act?

The GENIUS Act sets regulatory safeguards and consumer protections for stablecoins. It creates an official category for stablecoins and clarifies which digital assets qualify. Unlike other cryptocurrencies that can experience rapid price swings, stablecoins maintain steady value. They also enable faster, lower-cost financial transactions, making them more practical for payments. 

Additionally, the Act officially recognised stablecoins as payment tools rather than securities or national currencies. It mandates 1:1 backing by liquid assets such as U.S. dollars or Treasury bills. The law also pushes transparency through regular audits and monthly transparency reports for issuers.  

Only approved entities can issue payment stablecoins, including U.S. bank subsidiaries, federally approved nonbank companies, state-regulated issuers and foreign firms under similar oversight. These issuers can’t offer interest, which helps define these coins as payment tools, not investments. Moreover, the measure mandates issuers to comply with anti-money laundering laws and monitor and report suspicious activity. 

As part of its effort to protect consumers against fraud and financial instability, the law enforces rules that include clear redemption policies, asset segregation, data privacy protocols and penalties for violations.  

The GENIUS Act aims to strike a balance between innovation and stability by enabling the evolution of digital payment tools and fostering public trust in stablecoins through responsible management. However, critics express several concerns, including limited consumer protections and technical security risks, fearing that these key shortcomings may result in the law’s potential for crisis due to market impact and future implications.  

Alongside the GENIUS Act, lawmakers also approved two additional cryptocurrency-related bills: the Clarity Act expands regulatory oversight to digital commodities beyond stablecoins, while the Anti-CBDC Surveillance State Act prohibits the Federal Reserve from directly issuing retail central bank digital currencies (CBDC) to individuals.  

For more information about these developments or how they impact the crypto industry, please feel free to get in touch with our Bolder team for guidance.  

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