The GENIUS Act: what the US stablecoin law requires, and when
Who may issue payment stablecoins, how they must be backed and disclosed, where rulemaking stands, and what it means for treasury holdings.
If your company holds dollar stablecoins, the GENIUS Act will change which tokens are lawful to use in the US and what you can expect to see from issuers about their reserves. It does not, by itself, change how you account for those tokens; that question sits with the FASB, which has a proposal out for comment [1][5].
The law in brief
The Guiding and Establishing National Innovation for U.S. Stablecoins Act became Public Law 119-27 on July 18, 2025 [1]. It creates a federal framework for payment stablecoins: tokens the issuer is obliged to convert, redeem or repurchase for a fixed amount of monetary value [1]. The Act also states that a payment stablecoin issued by a permitted issuer is not a security [1].
Who may issue
Only a permitted payment stablecoin issuer may issue a payment stablecoin in the US [1]. The Act recognises three kinds: a subsidiary of an insured depository institution approved under the Act, a federal qualified issuer, and a state qualified issuer [1].
A state qualified issuer may stay under a state regime only while its consolidated outstanding issuance is no more than 10 billion dollars, and only if that state regime is substantially similar to the federal one [1]. An issuer that crosses the threshold has 360 days to move to the federal framework or stop new issuance [1]. Treasury proposed principles for judging substantial similarity in April 2026; under its proposal a state regime would have to meet or exceed the federal standards in section 4(a) [3].
There is also a market-access rule with a later start date. Three years after enactment, which is July 18, 2028, digital asset service providers may not offer or sell a payment stablecoin in the US unless a permitted issuer issued it, subject to a separate pathway for foreign issuers [1].
Reserves: at least 1:1, in a narrow list of assets
Issuers must hold identifiable reserves backing outstanding tokens on at least a one-to-one basis [1]. Eligible reserves are limited to: US coins and currency or balances at a Federal Reserve Bank; demand deposits or insured shares at insured depository institutions; Treasury bills, notes or bonds with 93 days or less remaining to maturity; certain overnight repurchase and reverse repurchase agreements backed by short-dated Treasuries; shares of government money market funds that invest only in these assets; other similarly liquid federal government assets the regulator approves; and tokenized versions of any of these [1].
Reserves generally may not be pledged, rehypothecated or reused, with narrow exceptions such as approved repurchase agreements used for liquidity [1]. Issuers may not pay holders interest or yield [1]. In an issuer insolvency, holders' claims rank ahead of other creditors with respect to the reserves [1].
Disclosure: monthly, examined, certified
- Each month the issuer must publish on its website the composition of its reserves [1].
- Each monthly report must be examined by a registered public accounting firm [1].
- The CEO and CFO must certify the monthly report to the issuer's primary regulator [1].
- Issuers with more than 50 billion dollars outstanding must also prepare annual audited financial statements [1].
- Issuers must publicly disclose a redemption policy with clear procedures for timely redemption, and give at least 7 days' notice of any redemption fees [1].
Effective date and rulemaking status (as of October 2026)
Regulators were given one year from enactment, until July 18, 2026, to issue implementing rules [1]. The Act takes effect on the earlier of 18 months after enactment, which is January 18, 2027, or 120 days after final regulations are issued [1][2]. So the statutory clock does not wait for the rules.
The OCC proposed its main implementing rule on February 25, 2026, covering reserves, redemption, capital, custody, audits and reporting for issuers under its jurisdiction; anti-money-laundering and sanctions rules are being handled separately with Treasury [2]. Treasury proposed its state-similarity rule on April 1, 2026 [3]. The July 2026 deadline passed without final rules. In August 2026 the Comptroller said the OCC aimed to have a final rule out by November, so that applications could be processed in the new year [4]. As of mid-October 2026 we found no final rule published; check the Federal Register and agency sites for updates.
What it means for treasuries
For a company that holds stablecoins rather than issues them, the main effects are practical. The reserve, redemption and monthly-disclosure requirements give you better evidence about the token you hold, and from July 2028 US intermediaries should only offer tokens from permitted issuers [1]. Tokens that cannot meet the regime may lose US distribution, which is a liquidity and counterparty point for your treasury policy.
On accounting, the Act regulates issuers; it does not set accounting classification for holders. In August 2026 the FASB issued a proposed update to Topic 230 that keeps the existing cash-equivalent definition but adds examples for certain digital assets [5]. The examples point to three features: an on-demand contractual right to redeem for cash, direct redemption with the issuer for a known amount of cash, and segregated reserves of at least one-to-one in short-term, highly liquid assets [5]. Comments are due November 19, 2026, and the effective date is not yet set [5]. Until a final standard is issued, keep your current policy and document your judgment; do not reclassify stablecoins as cash equivalents on the strength of the proposal alone.
What to do
- List every stablecoin you hold and note the issuer, its regulator and whether it is, or is applying to be, a permitted issuer.
- Collect each issuer's monthly reserve report and the accountant's examination, and file them with your period-end support.
- Read each issuer's redemption policy: who can redeem directly, minimums, timing and fees.
- Diary January 18, 2027 and July 18, 2028, and watch for final OCC, FDIC, Fed, NCUA and Treasury rules.
- Review the FASB cash-equivalents proposal with your auditor, and consider commenting before November 19, 2026.
- Update your treasury policy so that permitted-issuer status is a criterion for holding a stablecoin.
Sources
- Public Law 119-27: Guiding and Establishing National Innovation for U.S. Stablecoins Act (U.S. Government Publishing Office (govinfo))
- GENIUS Act Regulations: Notice of Proposed Rulemaking (OCC Bulletin 2026-3) (Office of the Comptroller of the Currency)
- Treasury Seeks Public Comment on GENIUS Act Notice of Proposed Rulemaking Concerning State-Level Regulatory Regimes (U.S. Department of the Treasury)
- Comptroller: GENIUS Act final rule will be out by November (ICBA)
- FASB issues proposed ASU on cash equivalents (KPMG Financial Reporting View)
General information for finance teams, current as of publication. Not legal, tax or accounting advice.