GENIUS Act: the US Federal Regime for Payment Stablecoins

What Was Signed and When It Takes Effect

The GENIUS Act — the Guiding and Establishing National Innovation for U.S. Stablecoins Act, bill S.1582 — was signed on July 18, 2025 and became Public Law 119-27, the first US federal statute devoted entirely to payment stablecoins. The regime's central figure is the permitted payment stablecoin issuer, or PPSI: once the requirements take effect, only an entity with that status may issue a payment stablecoin for the US market. The statute defines the token as a digital asset used for payment or settlement, redeemable at a fixed monetary value.

The calendar runs on an "earlier of two dates" mechanism: the requirements switch on January 18, 2027 — eighteen months after signing — or 120 days after the primary federal regulators issue final implementing rules, whichever comes first. The one-year deadline for those rules expired on July 18, 2026, and every agency missed it; only finals issued before September 20, 2026 could still accelerate the launch, and as of mid-August there are none, so the working start date is January 18, 2027. The second milestone is July 18, 2028: from that day intermediaries — digital asset service providers — lose the right to offer or sell stablecoins of non-permitted issuers in the United States.

Three Issuer Tracks

Three roads lead to PPSI status. The first is a subsidiary of an insured depository institution, approved by the parent's banking regulator: the OCC, the FDIC, the Federal Reserve, or the NCUA for credit unions. The second is the federal qualified issuer: a nonbank company, an uninsured national bank, or a federal branch of a foreign bank under direct OCC supervision. The third is the state qualified issuer: licensed by a state, with outstanding issuance up to $10bn, provided the Treasury certifies the state regime as "substantially similar" to the federal framework; outgrow the threshold and the issuer must transition into the federal perimeter unless granted an individual waiver.

The statute builds in a fuse against a big-tech stablecoin: a public company whose core business is not financial needs a unanimous vote of the Stablecoin Certification Review Committee — Treasury, Fed, and FDIC leadership.

The Requirements: Reserves, Disclosure, No Yield

The core is reserve backing of at least 1:1 in a narrow asset list: cash and balances at the Federal Reserve, insured demand deposits, Treasury bills maturing in 93 days or less, overnight repos and reverse repos backed by Treasuries, and government money market funds. Rehypothecation of reserves is allowed only for specific liquidity purposes. Reserve composition is published monthly with CEO and CFO attestation; an issuer above $50bn outstanding adds annual audited financial statements.

Paying the holder is prohibited: a PPSI may not pay interest or any other yield solely for holding the token. The issuer falls under the Bank Secrecy Act in full — an AML program, sanctions compliance, and the technical capability to block, freeze, or burn tokens on lawful order. It may not suggest the token is government-insured or legal tender. In an issuer insolvency, holders' claims rank ahead of all other creditors — a priority written into the statute itself.

Foreign Issuers and the July 18, 2028 Cutoff

A foreign issuer gets a door of its own: the Treasury may deem its home regime comparable, after which the issuer registers with the OCC and holds reserves in a US financial institution sufficient to serve its American customers. Jurisdictions under comprehensive sanctions are excluded, and reciprocal arrangements are envisaged for frameworks such as the EU's MiCA. As of August 2026 it is the only major block of the regime with no proposed rules at all.

Tether chose not to rebuild USDT around the federal requirements and launched a separate US token instead: USA₮ was announced on September 12, 2025 with Bo Hines heading the American arm, issued by Anchorage Digital Bank, a federally chartered trust bank; the launch followed in January 2026. USDT lives on across offshore venues, but its US distribution closes after July 18, 2028 unless a comparability determination for El Salvador, Tether's new home base, arrives first. Circle took the banking route: on December 12, 2025 the OCC conditionally approved its First National Digital Currency Bank, N.A.

The Rulemaking Map

The Treasury opened with an ANPRM on implementing the act, comments due November 4, 2025. Full proposed rules followed:

Not a single rule has been finalized; the only open comment window is on CIP, through August 21, 2026. Proposals are still missing entirely for foreign issuers, reciprocal arrangements, and the Fed's backup supervision of the state track; state certifications begin only after the statute takes effect. The running scoreboard is kept by the Chapman rulemaking tracker; the OCC's position is condensed in Bulletin 2026-3.

The OCC Charter Wave

While PPSI status remains out of reach, future issuers are building the vehicles — federal trust banks. On December 12, 2025 the OCC granted conditional approvals to five structures — Circle, Ripple, BitGo, Fidelity Digital Assets, and Paxos — joined in February 2026 by Bridge, Stripe's stablecoin unit, Protego, and Crypto.com. Bank issuance started in parallel: on May 27, 2026 SoFi became the first national bank with its own stablecoin, and Sony's trust bank won conditional approval on July 9, 2026. One distinction matters: a trust charter is a custody and fiduciary license, not issuer status — it readies the entity, capital, and compliance for the future application.

PPSI or Stay an MSB: the Fork for Payment Companies

As of August 12, 2026 there is no application window for PPSI status: the procedures exist only in proposals — the OCC's of March 2, FinCEN and OFAC's of April 8, and the FDIC's of April 10, 2026 — and until the rules are final there is nowhere to file. Planning runs off the statute's own dates: January 18, 2027 for the regime, July 18, 2028 for cleaning up intermediaries' shelves.

The fork is simple: PPSI status is needed only by those who issue their own token. If the product is payouts, wallets, acquiring, or treasury built on someone else's permitted coins, no federal status is required: the company stays in the familiar MSB perimeter — FinCEN registration plus state money transmitter licenses — or builds on the infrastructure of licensed partners. The model picks up two new duties: verifying by July 2028 that every supported token comes from a permitted issuer, and absorbing the tighter sanctions and AML expectations the statute pushes down the chain.

What Happens to USDT and How to Vet an Issuer

For a holder of dollar tokens, the regime turns issuer selection into bank-style due diligence. Four checks matter: the issuer's track and status, monthly reserve reports, an unconditional right of redemption at par, and holders' priority in insolvency. There is no FDIC insurance for stablecoins and there will be none — the statute prohibits even hinting at it. Since the issuer may not pay for holding, the treasury function migrates to government money market funds and tokenized deposits. USDT holders need not panic: outside the US nothing changes, while American venues will by July 2028 either offer the permitted USA₮ or pull the token from the shelf. The broader logic of private-wealth crypto allocation is covered separately.

Choosing a Track and Preparing in 2026

The choice of track follows from the starting position. An operating bank issues most easily through a subsidiary — SoFi's path. A nonbank issuer of national scale needs the OCC's federal track — the route of Circle and Bridge. The state track suits niche projects under $10bn but hinges on which states the Treasury certifies as "substantially similar"; until the first determinations it is a bet on waiting. The 2026 calendar dictates preparation without an application: build BSA and sanctions compliance to the proposed rules, provision bank-grade capital and governance, and, where useful, obtain a trust charter as the vehicle. The map of financial licenses helps weigh the US route against other jurisdictions.

Context: the CLARITY Act and Neighboring Forms of the Dollar

The GENIUS Act covers only the payment layer. The status of other crypto assets and the SEC–CFTC split of powers falls to the CLARITY Act: the House passed it back in July 2025, but the Senate pushed the key vote to September 2026. The delay does not touch GENIUS — it runs on its own. Competing forms of the on-chain dollar are growing just outside the statute's perimeter: tokenized deposits and money market funds on blockchain rails. Mirror regimes are maturing overseas: MiCA in the EU with the same interest ban, and Hong Kong's HKMA line, where the first license was granted in April 2026.