- GENIUS Act signed into law, impacting stablecoin issuers.
- New regulatory framework for US-based stablecoins.
- Stablecoin market faces stricter compliance deadlines.
The US House passed the GENIUS Act on July 17, 2025, reshaping stablecoin regulations with its signing by President Donald Trump in Washington, D.C.
This legislative move is pivotal for stablecoin regulation, likely affecting market dynamics and digital dollar integration.
Implications for Stablecoin Regulation
Market Impacts and Compliance
The GENIUS Act, a pivotal law for stablecoins, was enacted in July 2025. President Donald Trump signed it following passage by the US House. This law marks a crucial step for the digital dollar’s future in the United States.
The act involves federal agencies such as the Office of the Comptroller of the Currency. It defines approved payment stablecoin issuers and restricts issuance to these entities. This framework differentiates from previous state-level regulations.
Implications of the act on the market are expected to be significant. Only approved issuers can operate within the United States, which may concentrate capital within regulated entities. Compliance deadlines extend until November 2026.
“GENIUS will take effect either 18 months after its passage or 120 days after final regulations are issued—whichever comes first. Regulations implementing the Act must be issued within one year of enactment.” — Secretary of the Treasury, U.S. Department of the Treasury
The GENIUS Act excludes tokenized deposits, allowing banks to innovate in digital assets. The law’s nuanced approach provides space for traditional banking evolution alongside the burgeoning stablecoin sector, as highlighted by a Legal Expert at Arnold & Porter: “Tokenized deposits are not covered by the legislation, leaving space for banks to continue issuing that kind of digital asset without being subject to the regulatory requirements of the act.”
Economic and Technological Outlook
Previous regulatory actions influenced stablecoin markets significantly, causing shifts in total value locked and exchange activities. Observers anticipate similar outcomes as issuers strategize compliance and market positioning, as discussed in a statement by Commissioner Peirce on Genius Act.
Projected economic impacts include tighter liquidity and heightened regulatory demands on issuers like USDC and USDT. Historical data suggests such regulations lead to market realignment, reinforcing compliant entities and fostering technological innovation. SEC Statement by Commissioner Atkins provides further insights on the anticipated changes in market dynamics due to GENIUS Act’s stringent regulations.
Strengthening American Leadership in Digital Financial Technology continues to be a priority, particularly in shaping regulatory frameworks that balance innovation and security.
