ARTICLE
23 July 2025

GENIUS Act Moves To The President's Desk

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Davis Polk & Wardwell

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Today the House passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) (available here) with strong bipartisan support.
United States Government, Public Sector

State of play

  • Today the House passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) (available here) with strong bipartisan support.
  • The bill previously passed the Senate, and so it now heads to the president's desk to be signed into law, which President Trump has stated he intends to do quickly.
  • The GENIUS Act was passed instead of a competing House-originated bill called the Stablecoin Transparency and Accountability for a Better Ledger Economy Act of 2025 (STABLE Act) (available here). We previously compared the two bills here.
  • The GENIUS Act is the first major piece of crypto legislation to be passed by Congress. ─ We describe the key components of the GENIUS Act on the subsequent slides, with charts detailing the various rulemakings and reports required by the Act included on slides 20 – 27.
  • A companion update focuses on the GENIUS Act's anti-money laundering and countering the financing of terrorism (AML/CFT) and sanctions compliance provisions (available here).

Key definitions and concepts

  • Payment stablecoin. A digital asset:
    • that is or is designed to be used as a means of payment or settlement;
    • the issuer of which:
      • is obligated to convert, redeem or repurchase for a fixed amount of monetary value, not including a digital asset denominated in a fixed amount of monetary value, and
      • represents that such issuer will maintain, or create the reasonable expectation that it will maintain, a stable value relative to the value of a fixed amount of monetary value; and
    • that is not a national currency, deposit, or otherwise a security.
  • Distributed ledger. Unclear whether an asset recorded on a private, permissioned blockchain could fall within the definition of "digital asset" or "payment stablecoin."
  • Interest. A permitted payment stablecoin issuer and foreign payment stablecoin issuer cannot pay payment stablecoin holders yield or interest.
  • Securities classification. Expressly states that payment stablecoins are not securities and permitted payment stablecoin issuers are not investment companies.
  • Tokenized deposits. Explicitly out of scope.

Permitted federal issuers and primary regulator

Permitted federal issuers Primary regulator
Subsidiary of an IDI* The insured depository institution's (IDI) appropriate federal banking agency

Federal qualified issuer

  • A "nonbank entity" (defined as a person that is not a depository institution or subsidiary of a depository institution)
  • An uninsured national bank
  • A federal branch of a foreign bank
Office of the Comptroller of the Currency (OCC)

Permitted state issuers and primary regulator

The appropriate state regulator is the primary regulator of state issuers in the GENIUS Act, with the Federal Reserve Board (FRB) or OCC having secondary authority.
  • State issuers with less than $10 billion in payment stablecoins outstanding can opt into a state-only regime, provided it is (1) certified by the applicable state regulator as "substantially similar" to the federal regime and (2) the Stablecoin Certification Review Committee, composed of the Treasury Secretary, Chair of the FRB (or Vice Chair for Supervision) and Chair of the Federal Deposit Insurance Corporation (FDIC), does not reject the certification. The Treasury Secretary must establish broad-based principles through notice and comment rulemaking for determining what is deemed "substantially similar."
    • The state regulator must submit an annual recertification to the Stablecoin Certification Review Committee. Denials of certifications may be appealed to the D.C. Circuit Court of Appeals.
    • There are transition requirements for an issuer that later exceeds the $10 billion cap, unless the issuer obtains a waiver. Issuers subject to a prudential regime that was established at least 90 days prior to the enactment of the GENIUS Act and certified as substantially similar are presumptively approved for a waiver, unless the requirements for a waiver are not substantially met or the issuer poses significant safety and soundness risks to the U.S. financial system.
  • The Stablecoin Certification Review Committee must endeavor to expedite certification of state regulatory regimes if they were in place within 180 days after the GENIUS Act's enactment and provide a prudential regulatory regime for the supervision of digital assets or payment stablecoins.

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