GENIUS Act
What does the GENIUS Act do?
S 1582 is a Senate bill sponsored by Sen. Bill Hagerty (R-TN). The GENIUS Act creates the first U.S. federal law governing stablecoins — digital tokens designed to hold a fixed value, typically pegged to the dollar. Only licensed entities (banks, federally approved nonbank issuers, or state-licensed issuers with under $10B outstanding) may issue stablecoins for U.S. customers. Issuers must back every stablecoin dollar-for-dollar with U.S. cash or short-term Treasury securities and publicly disclose their reserves every month. Creates a federal licensing and 1:1 reserve requirement for stablecoin issuers, bans unlicensed stablecoin issuance in the U.S., and classifies stablecoins as neither securities nor commodities.
Did S 1582 pass? Where it stands
As of August 30, 2026, S 1582 has been signed into law on July 18, 2025.
Status: Signed into Law
Latest vote: House Passed 308–122 on July 17, 2025
Outlook: Enacted
Enacted: Signed into law on July 18, 2025
Key provisions
- Only Licensed Issuers May Issue Stablecoins
- It is unlawful for any unlicensed person to issue a payment stablecoin in the United States, effective per Sec. 20 (the earlier of 18 months after enactment or 120 days after final implementing regulations) — a separate 3-year clock applies only to digital asset service providers offering or selling non-permitted-issuer stablecoins (Sec. 3(b))
- Three permitted issuer categories: bank subsidiaries, federally approved nonbank issuers chartered by the Office of the Comptroller of the Currency, and state-licensed issuers with $10B or less outstanding
- Violations carry penalties of up to $1M per violation and/or up to 5 years in prison
- 1-to-1 Reserve Requirement
- Permitted issuers must maintain reserves of at least 100% of outstanding stablecoins (an at-least 1-to-1 basis) at all times
- Eligible reserves: U.S. currency, deposits at insured banks, Treasury bills with maturity of 93 days or less, overnight repo agreements backed by Treasuries, and government money market funds
- Reserves may not be rehypothecated (pledged as collateral) except for margin obligations, standard custodial services, and limited liquidity needs — liquidity repos must be centrally cleared or have prior regulator approval
- Monthly Disclosure and Certification
- Issuers must publicly publish monthly reserve composition — total outstanding stablecoins, amounts by reserve type, average maturity, and custody location
- The CEO and CFO must certify the accuracy of each monthly report; false certifications subject to the same criminal penalties as federal securities fraud
- A registered public accounting firm must examine each month-end reserve report
- Stablecoins Not Securities or Commodities
- Payment stablecoins issued by permitted issuers are explicitly excluded from the definition of 'security' under the Securities Act, Exchange Act, and related laws
- Payment stablecoins are also excluded from the definition of 'commodity' under the Commodity Exchange Act
- Permitted issuers are excluded from the definition of 'investment company' under the Investment Company Act of 1940
- Stablecoin Holders Prioritized in Bankruptcy
- In any insolvency proceeding, stablecoin holders have first priority claim on required reserve assets ahead of all other creditors
- Required reserves are excluded from the bankruptcy estate under 11 U.S.C. Sec. 541(b), but the automatic stay under section 362 still applies to those reserves
- New Sec. 362(d)(5) directs courts to use best efforts to enter a final order beginning ratable distributions to stablecoin holders within 14 days of the required hearing where reserves are available
Last updated July 30, 2026