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GLOSSARY · BLOCKCHAIN & WEB3

GENIUS Act (US Stablecoin Law)

What the GENIUS Act regulates — the first US federal stablecoin law: 1:1 reserves, authorised issuers, no interest to holders, and how it compares to MiCA.

WHAT IS IT? · FOR DUMMIES

The GENIUS Act is the first major US federal crypto law, signed in July 2025. It does for dollar stablecoins roughly what MiCA did in Europe: only authorised entities may issue them, with one dollar of reserves per token and audits. If Europe led the way with MiCA, the GENIUS Act confirms that regulated tokenized money is the global direction of travel.

WHAT IS IT? · PRO

The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), signed on 18 July 2025, creates the federal framework for payment stablecoins in the US: issuance reserved to authorised entities (bank subsidiaries and licensed non-bank issuers, federal or state route), 1:1 reserves in cash and short-term government debt, periodic reserve disclosures, AML obligations and holder priority if the issuer becomes insolvent. It takes effect in stages as implementing rules are finalised.

Two features define its character: the prohibition on paying interest to holders — a payment stablecoin must not compete with bank deposits — and the requirement of comparable standards for foreign issuers distributing in the US. The parallel with the e-money token regime under MiCA is deliberate: both converge on authorised issuers, full reserves and redemption at par, as we explain in our euro stablecoin guide.

01 / Key points

  • First US federal stablecoin law (signed 18 July 2025)
  • 1:1 reserves in cash and short-term government debt, with periodic disclosures
  • Authorised issuers only; holders rank first in insolvency
  • No interest to holders; converges with the MiCA EMT regime

02 / Advantages

  • Legal certainty for the largest stablecoin market in the world
  • Regulatory convergence with Europe (MiCA): same spirit, two frameworks
  • Accelerates bank entry into tokenized money

03 / Disadvantages

  • Implementing rules pending: fine detail arrives with secondary regulation
  • No yield: interest-bearing tokens remain in a grey zone
  • Payments-only framework: does not address tokenized securities

This entry is informative. It is not legal, tax or investment advice. The rules cited change: check the current version on BOE and EUR-Lex.