GENIUS Act
The GENIUS Act is a US federal law that establishes a regulatory framework for payment stablecoins. These are digital tokens designed to be redeemed for a fixed amount of money and used for payments. The law sets conditions for permitted issuers, the reserves backing their tokens and the information that holders receive about redemption.
Issuers and payment businesses need these rules to determine how a stablecoin can be issued and offered in the United States. Reserve and disclosure requirements address the issuer's ability to meet redemption requests. Foreign issuers face additional conditions, so a license under Europe's MiCA framework does not by itself establish access to US customers.
What the GENIUS Act requires
The Guiding and Establishing National Innovation for U.S. Stablecoins Act was signed on 18 July 2025, according to Skadden. Only a permitted payment stablecoin issuer may issue a payment stablecoin in the US: a subsidiary of an insured depository institution, a federally qualified nonbank, a federal branch of a foreign bank or an uninsured national bank. An issuer with 10 billion dollars or less in stablecoins outstanding may choose a state regime instead.
Every token needs one-to-one backing in cash, Federal Reserve balances, insured deposits or short-term Treasuries. Issuers publish the reserve composition every month, certified by senior officers, as The Block sums up. They may not pay interest or yield for holding a stablecoin, count as financial institutions under the Bank Secrecy Act and must be able to seize, freeze or burn tokens on a lawful order. The law takes effect 18 months after enactment or 120 days after the final regulations, whichever comes first.
GENIUS Act and MiCA compared
Both laws require full reserve backing and redemption at par, and both forbid interest for holders. MiCA is wider: it also licenses exchanges, custodians and other crypto-asset service providers, while the GENIUS Act deals with issuers. MiCA also fixes the reserve mix more tightly, with at least 30 percent in separate bank accounts under Article 54. An ECB blog post calls the US law broadly similar in spirit to MiCA but more lenient in some areas.
Foreign issuers and Europe
A foreign issuer can keep serving US users only if the Treasury finds its home regime comparable and the issuer registers with the OCC. For an issuer licensed in the EU, the Treasury has to find MiCA comparable. USDT from Tether is not a permitted US issuer, and Tether launched a separate token, USAT, through Anchorage Digital Bank, as The Block notes.
For European banks the law matters because dollar tokens dominate the market. The ECB put dollar stablecoins at about 99 percent of total stablecoin market capitalization, and the ECB position on stablecoins identifies risks for the euro area.
Upcoming events on stablecoins and digital money
Finance Loop and the GENIUS Act
Finance Loop is the meeting place in Germany for people who compare US and EU stablecoin rules for their business. The Digital Euro Conference of the Digital Euro Association, where Finance Loop is partner, puts stablecoins on the agenda next to the digital euro. Finance Loop supported the Bybit EU x Circle Roadshow in Frankfurt with panels on the dollar stablecoin USDC and the euro stablecoin EURC.
Payments & Digital Money
Risk & Compliance
When was the GENIUS Act signed?
Signed on 18 July 2025, the GENIUS Act takes effect 18 months after enactment or 120 days after the regulators issue final rules, whichever is earlier.
Can a stablecoin pay interest under the GENIUS Act?
An issuer may not pay interest or yield to holders for holding, using or keeping a payment stablecoin. Whether exchanges may pay rewards is a separate debate about stablecoin yield.
Does the GENIUS Act apply to European stablecoin issuers?
Only a foreign issuer serving US customers needs a home regime that the Treasury deems comparable and a registration with the OCC.
The GENIUS Act and Finance Loop
Finance Loop covers US and EU stablecoin law in its Risk & Compliance and Payments & Digital Money tracks. Finance Loop is media partner of Capital & Code, hosted by the euro stablecoin issuer AllUnity in Frankfurt, and partner of the Digital Euro Association.
Finance Loop is a professional network supporting the institutional use of emerging technologies in finance, such as AI, digital payments, cloud and blockchain solutions. Finance Loop helps its members build skills and personal networks in these fields: Investment & Digital Assets, Payments & Digital Money, Digital Infrastructure & Sovereignty, and Risk & Compliance.