Plain Language Summary
# GENIUS Act Summary **What It Does:** The GENIUS Act creates the first federal regulatory framework for "stablecoins"—a type of digital currency designed to maintain a fixed value, typically pegged to the U.S. dollar. The law allows only certain approved institutions to issue these digital currencies for use by Americans. Issuers must be subsidiaries of banks, federally-approved nonbank payment companies, or state-approved companies (if their stablecoin holdings stay under $10 billion).
All issuers must back their stablecoins dollar-for-dollar with U.S. currency or similar liquid assets and be subject to federal or state oversight. **Who It Affects:** This bill primarily impacts cryptocurrency companies and financial institutions interested in creating stablecoins, as well as consumers who might use these digital currencies for payments. It also affects federal banking regulators and state financial regulators tasked with overseeing these new entities. **Current Status:** The bill has already been signed into law, making it official policy. This represents a significant move by Congress to bring cryptocurrency-based payment systems under traditional banking regulation rather than leaving them largely unregulated.
CRS Official Summary
Guiding and Establishing National Innovation for U.S. Stablecoins Act or the GENIUS ActThis bill establishes a regulatory framework for payment stablecoins (digital assets which an issuer must redeem for a fixed value).Under the bill, only permitted issuers may issue a payment stablecoin for use by U.S. persons, subject to certain exceptions and safe harbors. Permitted issuers must be a subsidiary of an insured depository institution, a federal-qualified nonbank payment stablecoin issuer, or a state-qualified payment stablecoin issuer. Permitted issuers must be regulated by the appropriate federal or state regulator. Permitted issuers may choose federal or state regulation; however, state regulation is limited to those with a stablecoin issuance of $10 billion or less.Permitted issuers must maintain reserves backing the stablecoin on a one-to-one basis using U.S. currency or other similarly liquid assets, as specified. Permitted issuers must also publicly disclose their redemption policy and publish monthly the details of their reserves.The bill specifies requirements for (1) reusing reserves; (2) providing safekeeping services for stablecoins; and (3) supervisory, examination, and enforcement authority over federal-qualified issuers.The bill allows foreign issuers of stablecoins to offer, sell, or make available in the United States stablecoins using digital asset service providers, subject to requirements, including a determination by the Department of Treasury that they are subject to comparable foreign regulations.Under the bill, permitted payment stablecoins are not considered securities under securities law. However, permitted issuers are subject to the Bank Secrecy Act for anti-money laundering and related purposes.
Latest Action
Became Public Law No: 119-27.