The U.S. "GENIUS Act" comprehensively regulates payment stablecoins: issuance thresholds, reserve standards, and regulatory systems all explained.

As stablecoins gradually become an important tool for payment and settlement in U.S. dollars, the U.S. Congress recently introduced the "GENIUS Act" (Guiding and Establishing National Innovation for U.S. Stablecoins Act), which aims to establish a compliance framework that coordinates federal and state governments by clearly regulating the issuance conditions, reserve requirements, and supervisory mechanisms for "Payment Stablecoins."

( The U.S. stablecoin bill "GENIUS Act" has been passed! Legislation to be completed by 5 / 26, while Democratic Party's Warren remains silent )

Core concept of the 《GENIUS Act》: restrict "Payment Stablecoin" under regulation

The United States is finally going to have a stablecoin bill, and for various forms of stablecoins, everyone is both looking forward to it and afraid of being harmed. The first thing to understand is that the "GENIUS Act" only regulates "payment stablecoins" (Payment Stablecoin).

The bill clearly defines "payment stablecoin" as:

A type of digital asset, guaranteed by the issuer to be redeemable at a fixed amount of fiat currency, and committed to maintaining a stable exchange rate.

and exclude the following types of assets:

fiat currency itself (such as the US dollar)

Bank deposits (even if recorded on the blockchain)

Securities assets in traditional finance

Decentralized stablecoins and algorithmic stablecoins (such as DAI, FRAX)

Therefore, it can be understood that deposit tokens, RWA, decentralized stablecoins, and algorithmic stablecoins are all outside the scope of regulation by this bill.

Who can issue payment stablecoins under the GENIUS Act?

The bill states that only the following three categories of "Permitted Payment Stablecoin Issuers" ( licensed payment stablecoin issuers ) which can issue regulated stablecoins:

Bank or its subsidiaries (regulated by federal banking laws)

Federally licensed non-bank issuers (approved by OCC)

State-level Compliance agency licensed stablecoin issuers (those with assets not exceeding $10 billion may adopt state regulation)

No other unauthorized parties may issue or sell payment stablecoins to U.S. users (effective after a three-year grace period).

Here, we can see that, in addition to traditional financial institutions, large operators can apply to the OCC ( for the Office of the Comptroller of the Currency ), while medium and smaller operators can apply to state-level governments.

"GENIUS Act" reserve requirement: 1:1 full cash reserve, cannot be staked.

The issuer must hold reserve assets equivalent to the issuance amount, including:

US cash and Federal Reserve account deposits

Demand Deposit (FDIC Insurance)

Short-term US Treasury bonds within 93 days

government money market fund

Eligible repurchase agreements or tokenized government bond assets

And the repledging or reinvestment of reserves (Rehypothecation) is prohibited, unless used for specific liquidity needs or approved purposes.

The "GENIUS Act" report and compliance obligations: public transparency, subject to audit.

Each compliant issuer must fulfill the following obligations:

Monthly public reserve composition and stablecoin issuance

Accept the audit by registered accountants

The CEO and CFO must sign the authenticity certification.

Annual financial reports and related party transactions must be prepared and disclosed in accordance with GAAP (if the issuance scale exceeds 50 billion USD).

Compliance with the Bank Secrecy Act (BSA) and anti-money laundering regulations

The "GENIUS Act" actively regulates but retains exceptions.

The bill specifically exempts the following situations from the provisions of this law:

Peer-to-Peer (P2P) transfer of digital assets between individuals

A single person transfers stablecoins between domestic and foreign accounts.

Self-custody wallet operation (hardware / software wallet)

These exceptions preserve the space for personal freedom and decentralized applications.

The "GENIUS Act" operates on a dual track of state and federal: state regulators can establish their own systems.

State-compliant issuers with total assets not exceeding 10 billion USD may choose to continue to be subject to state regulation, but their supervisory system must be approved by the federal "Stablecoin Review Committee." If they exceed the 10 billion threshold in the future, they must transition to the federal system or cease issuance.

The "GENIUS Act" ensures payment stability, separating DeFi from payment applications.

The core objective of this bill is to create a "Compliance stablecoin infrastructure" for everyday payments, retail finance, and corporate use, distinguishing it from decentralized protocols or algorithmic models. It does not intend to eliminate all stablecoins, but rather to design a set of standards for "secure and redeemable payment stablecoins" to prevent systemic risks such as the collapse of Terra/UST.

DAI and FRAX are not within the scope of regulation, but the exchange listing policy will be a key point of observation.

Although decentralized stablecoins such as DAI do not fall within the definition of this law and are therefore not subject to its restrictions, if in the future U.S. exchanges and payment providers only accept the listing or integration of "Compliance payment stablecoin," it may still indirectly affect such assets.

This article comprehensively regulates payment stablecoins in the United States under the "GENIUS Act": issuance thresholds, reserve standards, and regulatory systems at a glance. First appeared in Chain News ABMedia.