House Passes GENIUS Act, Awaits Presidential Signature

Major U.S. Stablecoin Regulation Clears Final Hurdle in Congress

WASHINGTON, D.C. — In a move widely seen as a watershed moment for cryptocurrency policy in the United States, the House of Representatives has approved the Guiding and Establishing National Innovation for US Stablecoins Act, colloquially known as the GENIUS Act. With a narrow margin of 217-212, the bill now awaits President Trump’s expected signature at a White House ceremony. The GENIUS Act establishes a comprehensive regulatory framework for U.S. dollar-backed stablecoins, signaling a new chapter for digital asset oversight at the federal level.

What the GENIUS Act Means for Stablecoin Regulation

The GENIUS Act creates a definitive legal structure for so-called payment stablecoins, digital assets intended to facilitate payments and settlements while maintaining stable value relative to a national currency such as the U.S. dollar. This definition distinguishes payment stablecoins from other digital assets designed primarily for investment or speculation, which remain outside the act’s scope.

Only entities meeting strict criteria—such as subsidiaries of insured depository institutions, federally qualified nonbank stablecoin issuers, or state-qualified issuers—are permitted to issue payment stablecoins under the new law. All eligible issuers will fall under the supervision of federal or state financial regulators, with robust requirements covering anti-money laundering and consumer protection. Notably, stablecoins issued within this regime will not be classified as securities, reducing overlap with existing Securities and Exchange Commission rules.

Congressional Debate and Legislative Journey

The path to passage was not without friction. Tensions surfaced as lawmakers debated details, with some members pushing for provisions from the earlier STABLE Act to appear in the GENIUS Act, while others advocated for greater latitude in the stablecoin sector. The final House debate lasted a record nine hours, reflecting the bill’s significance and the high stakes involved in regulating the fast-evolving world of digital currency.

The GENIUS Act’s advancement was part of the so-called “Crypto Week” on Capitol Hill, during which the House also passed the CLARITY Act—addressing broader digital asset regulation—and the Anti-CBDC Surveillance State Act, which would block the Federal Reserve from issuing a central bank digital currency. Though the CLARITY Act and Anti-CBDC bill still require Senate approval, the GENIUS Act had already cleared that hurdle, solidifying its imminent implementation. President Trump, a supporter of cryptocurrency innovation, is expected to sign the bill into law promptly.

How the GENIUS Act Will Roll Out

Implementation of the GENIUS Act will unfold over the next 15 months. While the legislation lays out the new regulatory framework immediately, its prohibition against unauthorized stablecoin issuance will not take effect until the “effective date”—projected to be November 2026. In the interim, bank regulatory agencies, state regulators, and the Treasury Department must develop detailed rules, conduct policy studies, and prepare industry guidance to smooth the transition.

During this period, institutions already involved in stablecoin issuance or custodial services are tasked with reviewing the act's definitions and adjusting compliance policies accordingly. The GENIUS Act’s language around “institution” is broad, encompassing new classes of crypto service providers as it seeks to close regulatory gaps that, until now, have characterized the American approach to digital assets.

Key Definitions and Scope

At the heart of the bill is the definition of “payment stablecoin”:

• A digital asset recorded on a cryptographically secure ledger
• Designed for use in payments or settlements—not as an investment vehicle
• Must be redeemable for a fixed monetary value in national currency or deposits

Excluded under this definition are:

• Digital assets that are themselves national currency or deposits
• Securities as defined by other federal statutes
• Commodities and purely speculative cryptocurrencies

The act also carefully defines what constitutes a “permitted issuer,” aiming to balance innovation with systemic risk oversight.

Economic Impact: Innovation Versus Oversight

The passage of the GENIUS Act addresses what industry leaders and many regulators have called the “gray zone” of stablecoin issuance in the United States. The stablecoin market, particularly U.S. dollar-backed coins such as USDC and Tether’s USDT, has grown rapidly—often without clear federal regulatory guidance.

Supporters argue that establishing a straightforward, national framework gives both entrepreneurs and the broader financial system clarity and confidence, boosting U.S. leadership in blockchain and digital payments. Such regulation could attract capital, reduce risk for institutions dabbling in crypto, and give consumers greater protection against fraud or insolvency events.

Critics, however, caution that heavy-handed requirements may stifle smaller startups, limit decentralized finance (DeFi) innovation, and create barriers for entrants outside the traditional banking sector. Some also fear that restrictions on decentralized stablecoins could push innovation offshore or into less-regulated corners of the global market.

Historical Context: Filling a Regulatory Gap

Until now, stablecoin regulation in the U.S. has been a patchwork. Several states, most notably New York with its BitLicense regime, have implemented their own frameworks, while federal agencies have asserted jurisdiction in specific enforcement actions but never produced a unified approach.

The rapid adoption of stablecoins—now measured in the hundreds of billions in market capitalization worldwide—placed increasing pressure on lawmakers to step in. Previous legislative attempts, including the STABLE Act, failed to secure broad consensus. The GENIUS Act represents the first sustained, bipartisan agreement on how to oversee the stablecoin sector at scale.

Regional Comparisons: How the U.S. Stacks Up

The GENIUS Act propels the U.S. toward the regulatory mainstream seen in major economies. Key comparisons include:

• European Union: The EU Markets in Crypto-Assets Regulation (MiCA), set for phased implementation, develops separate regimes for stablecoins (“e-money tokens”), requiring full asset backing, licensing, and robust consumer protections.
• United Kingdom: The UK has moved to regulate certain stablecoins—especially those intended as means of payment—through amendments to the Financial Services and Markets Act, requiring registration and adherence to anti-money laundering standards.
• Asia-Pacific: Jurisdictions such as Singapore and Japan maintain tailored, pro-innovation frameworks for stablecoin issuers, but the market remains fragmented.

The U.S. framework aligns more closely with the EU’s approach, emphasizing prudential regulation and direct oversight—albeit with stricter requirements regarding eligible issuers and redemption guarantees.

Reactions From the Crypto Industry and Financial Sector

The response from crypto industry leaders has been largely optimistic. Ji Hun Kim, CEO of the Crypto Council for Innovation, heralded the House’s passage as a pivotal moment, suggesting it “replaces uncertainty with confidence for entrepreneurs, the broader market, and consumers”. Financial institutions have signaled cautious support, viewing the uniform approach as a mechanism to finally bring crypto regulation into the mainstream, opening the door to new products and partnerships.

Consumer advocacy groups, meanwhile, are closely watching rulemaking processes. They continue to raise questions about the sufficiency of redemption requirements, the potential exclusion of non-bank innovators, and the need for robust consumer education as the regulatory landscape evolves.

Urgency, Next Steps, and What to Watch

With a scheduled signing ceremony at the White House, the GENIUS Act is set to become law within days. Once enacted, federal agencies will immediately begin the process of drafting and publishing necessary rules and guidance. Industry participants, particularly those operating in gray areas or cross-jurisdictionally, face a timeline of 12-18 months to fully align with the new framework.

Regulators at both the federal and state levels will need to coordinate oversight efforts and clarify how legacy state regimes intersect with the new national baseline. International observers will closely follow the rollout to gauge the law’s practical effects and implications for global market integration.

As President Trump prepares to sign the GENIUS Act, the United States finds itself at the crossroads of financial innovation and systemic risk management. With the world’s largest financial markets and a booming digital asset sector, the success of the GENIUS Act may shape not only domestic policy but also the global approach to stablecoin regulation for years to come.