GENIUS Act

The primary prudential law (signed July 18, 2025) that regulates the issuance and redemption of payment stablecoins. It restricts issuance to "Permitted Payment Stablecoin Issuers" - which must be either insured depository institutions (banks) or federally qualified non-bank entities regulated by the OCC. The Act mandates that all payment stablecoins be backed 1:1 by high-quality liquid assets (cash, U.S. Treasuries) and subjects issuers to monthly public audits and strict capital liquidity requirements.

Operational Role

The GENIUS Act is the "manufacturing" standard for stablecoins. It enforces the reserve composition (e.g., preventing the use of commercial paper as backing) and establishes the bankruptcy remoteness of reserves, ensuring that token holders have priority claims over general creditors in the event of an issuer's insolvency.