GENIUS Act launches a new era of regulation of stablecoins

The President of the United States signed into law the Guiding and Establishing National Innovation for U.S. Stablecoins, or GENIUS Act. It creates a unified framework for digital dollars and transfers oversight to the Federal Reserve and the OCC.

A stablecoin is recognized as a token that is guaranteed redeemable at $1 and is settlementable. It can be issued by unions and fintech companies with $25,000,000 or more in capital. Foreign issuers must prove comparable treatment, otherwise their tokens will be excluded from circulation in the United States.

The key requirement is one hundred percent liquor coverage: a minimum of 80% will be Treasury bills with maturities up to 180 days, with the rest placed in Federal Reserve accounts or instant repos. Monthly reports and aggregate data are received by regulators daily via oracle.

Bernstein expects the value of the sector to exceed $3.7 trillion by 2030 as banks are able to offer tokens instead of low-yielding demand deposits. Immediately after the law was published, quotes of cryptocurrency companies broke % and the daily turnover of stablecoins exceeded $150,000,000,000,000,000.

Large issuers are adapting swiftly. Circle transfers USDC reserve to the Fed, PayPal announces PYUSD 2.0 with micropayments, Fidelity Digital Assets combines money market funds and tokenized dollars. Traditional banks are testing tokenized loans, where settlement takes seconds instead of two banking days.

The Treasury expects tokenized bills to boost demand for short-term paper; at the same time, fines of up to $1,000,000 per day for reserve rule violations have been tightened and there is an automatic block on new issues. Liquidity providers are spreading digital dollars, while Bitwise is preparing an index where the main criterion is settlement volume, not capitalization.

Custodians are forming teams to manage portfolios of promissory notes, and providers are connecting Fedwire channels to facilitate the exchange of tokens for cash.

Lawyers see the act as a tool to preserve the dollar's position: a unified digital layer lowers barriers to international payments and pushes other jurisdictions to speed up their own rules. In practice, it is already prompting Asian issuers to conduct unscheduled audits of reserves.

In the coming months, companies will have to balance asset returns with stringent regulatory standards. If demand for short-term bonds continues, the Ministry of Finance may increase issuance, while the advance of stablecoins in global settlement will force payment networks to rethink established standards.

On a technical level, the GENIUS Act is creating demand for specialized blockchain-originated treasury bills: startups are already creating smart contracts where the coupon is distributed to token holders automatically, and corporate ERP systems are getting APIs to directly incorporate stablecoins into supply chains.