The U.S. government’s moving closer to controlling digital dollars known as stablecoins through a new law called the GENIUS Act. This framework creates a different path from Europe’s stricter approach to crypto regulation. President Trump signed this legislation on July 18, 2025, making it the first comprehensive stablecoin law in the United States.
The GENIUS Act sets up federal oversight through a new group called the SCRC. Companies that want to issue stablecoins must be banks, approved nonbank firms, or state-chartered entities. They’ll need to keep one dollar in reserves for every stablecoin they issue. These reserves can only be U.S. dollars or safe assets like Treasury bonds.
Federal oversight requires stablecoin issuers to maintain dollar-for-dollar reserves in cash or Treasury bonds.
Issuers can’t do much beyond creating and redeeming stablecoins. They’re banned from offering other financial services or lending out their reserves, except for short-term agreements to maintain liquidity. Regular audits will check that companies follow these rules. They must also tell the public what backs their stablecoins and keep customer funds separate from other money. Issuers must publish monthly reports on their websites showing the exact composition of their reserve assets.
States get some power under this system. They can regulate smaller issuers holding less than $10 billion if their rules match federal standards. The SCRC reviews state programs and can revoke approval if states don’t meet requirements. This dual system aims to prevent companies from shopping around for the easiest regulations.
After three years, U.S. exchanges and custodians won’t be able to trade unauthorized stablecoins. Only approved U.S. companies or foreign issuers following similar rules can operate in American markets. The Treasury Secretary can make exceptions for small operations or emergencies.
All stablecoin issuers must follow anti-money laundering rules under the Bank Secrecy Act. They’ll report key metrics publicly to maintain market confidence. The law doesn’t cover hardware or software makers that help people store their own crypto.
The GENIUS Act takes a lighter touch than Europe’s Markets in Crypto-Assets regulation. While Europe requires stricter licensing and capital requirements across all member states, the U.S. system allows more flexibility through state-level regulation.
Companies get 18 months to comply once the law passes. This approach reflects America’s traditional preference for market-based solutions over Europe’s extensive regulatory model.
References
- https://www.weforum.org/stories/2025/07/stablecoin-regulation-genius-act/
- https://www.wilmerhale.com/en/insights/client-alerts/20250718-what-the-genius-act-means-for-payment-stablecoin-issuers-banks-and-custodians
- https://en.wikipedia.org/wiki/GENIUS_Act
- https://www.lw.com/en/insights/the-genius-act-of-2025-stablecoin-legislation-adopted-in-the-us
- https://www.morganlewis.com/pubs/2025/09/the-genius-acts-stablecoin-regulatory-scheme-promotes-uniformity-but-may-fall-short
