What the GENIUS Act Means for the Stablecoins in Your Wallet
The GENIUS Act is the first US federal law for dollar stablecoins: signed on July 18, 2025, it requires issuers to hold 1:1 reserves in cash and short-term Treasuries, publish monthly reserve reports, honor timely redemption, and stop paying holders interest -- and it does not stop you from holding or spending USDC or USDT today. Its rules are expected to take effect on January 18, 2027, and from July 18, 2028 US exchanges and wallets may only offer stablecoins from approved issuers, per the enrolled statute and Treasury's August 2026 proposed rule.
If you saw August 2026 headlines about "Treasury's new stablecoin rule," here is what the law says, what the proposal adds, and where Circle and Tether stand. Short version: the Act regulates the companies that mint the token, not the person who owns it.
GENIUS stands for the Guiding and Establishing National Innovation for U.S. Stablecoins Act. It became Public Law 119-27 on July 18, 2025, a date confirmed by the White House signing statement and the SEC Chairman's statement. It defines a payment stablecoin as a digital asset designed for payment or settlement, whose issuer is obligated to redeem it for a fixed amount of money and represents that it will hold a stable value; bank deposits and securities are excluded, per Treasury's summary. USDC and USDT are the kind of token that definition describes.
Section 3(a) makes it "unlawful for any person other than a permitted payment stablecoin issuer to issue a payment stablecoin in the United States." A permitted payment stablecoin issuer is one of three things, per the statute:
- A subsidiary of an insured bank or credit union approved to issue stablecoins.
- A federal qualified payment stablecoin issuer: a nonbank approved and supervised by the Office of the Comptroller of the Currency (OCC).
- A state qualified payment stablecoin issuer: a company approved by a state regulator. One with "not more than $10,000,000,000" outstanding may stay under a state regime that is "substantially similar" to the federal one.
Foreign issuers have a separate door: under Section 18 the prohibitions do not apply if Treasury finds the issuer's home regulator comparable and the issuer registers with the OCC, per Treasury's proposed rule. That path matters for Tether.
Every permitted issuer must keep "identifiable reserves backing the outstanding payment stablecoins ... on an at least 1 to 1 basis." The statute lists what counts: US currency or balances at a Federal Reserve Bank; demand deposits at an insured bank; Treasury bills, notes, or bonds "with a remaining maturity of 93 days or less"; overnight repurchase agreements backed by those bills and overnight reverse repos collateralized by Treasuries; and government money-market funds holding only those assets. Reserves may not be pledged or reused. Bitcoin, gold, corporate bonds, and loans are not on the list.
Transparency sits on top. Each issuer must "publish the monthly composition of the issuer's reserves on the website of the issuer," have it "examined by a registered public accounting firm," and have its CEO and CFO certify its accuracy each month, with criminal penalties for a knowingly false certification. An issuer with "more than $50,000,000,000 in consolidated total outstanding issuance" that is not already an SEC reporting company must also produce audited annual financial statements.
Three provisions in the statute are written for the holder.
Redemption. Every issuer must publish a redemption policy with "clear and conspicuous procedures for timely redemption of outstanding payment stablecoins." Because the coin is defined as redeemable for a fixed amount of money and backed one-to-one, the practical effect is redemption at face value. Fees can only change with seven days' notice.
Priority if the issuer fails. Section 11 says that in any insolvency of a permitted issuer, a holder's claim "shall have priority ... over the claims of the permitted payment stablecoin issuer and any other holder of claims" with respect to the required reserves.
No interest for holding. Section 4(a)(11) says no permitted or foreign issuer "shall pay the holder of any payment stablecoin any form of interest or yield (whether in cash, tokens, or other consideration) solely in connection with the holding, use, or retention of such payment stablecoin." This restricts the issuer, not you: a regulated dollar stablecoin is meant to work like cash, not a savings account. For why reserve income is so contested, see our Open USD explainer.
From the statute and Treasury's proposed rule:
- Effective date. Section 20 sets it at "the earlier of" 18 months after enactment or 120 days after the primary federal regulators issue final rules. Treasury's notice says the effective date "is expected to be January 18, 2027," the 18-month mark; the OCC restates the same formula.
- Three-year cutoff. Under Section 3(b)(1), "beginning on the date that is 3 years after the date of enactment," a digital asset service provider -- an exchange, custodian, or similar business -- may not "offer or sell a payment stablecoin to a person in the United States" unless a permitted issuer issued it. Treasury spells that out as July 18, 2028. Compliant foreign issuers under Section 18 are the exception.
On August 17, 2026 Treasury announced a notice of proposed rulemaking, published in the Federal Register on August 18 as document 2026-16796, with comments due October 19, 2026. It adds no obligations for holders; it defines the terms in Section 3 so companies know where the lines are. In plain English, it would:
- Define "issuing in the United States": a company issues here if it is located in the US when it issues, or issues to a person located in the US.
- Spell out "offer or sale," with examples such as directly soliciting a US person, advertising a coin to US buyers, and "advising potential purchasers on how to evade generally applicable location detection or restriction mechanisms."
- Say who may be liable for helping an unlawful issuance, such as a market maker or an exchange listing the coin "shortly after issuance" -- not people who "merely purchase a smaller subset ... for their own use."
- Restate the individual exemptions: person-to-person transfers without an intermediary, and transactions "by means of a software or hardware wallet that facilitates an individual's own custody." A separate April 2026 proposal covers when a state regime counts as "substantially similar," per The Block.
- You can still hold and spend USDC and USDT. Nothing prohibits an individual from holding a stablecoin, and the statute exempts self-custody wallets and person-to-person transfers. The 2028 cutoff falls on the businesses that offer and sell; the interest rule binds issuers, not holders.
- It is a US law. The European Union's Markets in Crypto-Assets Regulation (MiCA) is separate. Its stablecoin rules have applied since June 30, 2024; e-money token issuers must be authorized as a credit or e-money institution and must redeem "at any moment and at par value," per the EU's official summary. Approval in one regime is not approval in the other.
| Question | Before GENIUS | After GENIUS (once effective) |
|---|---|---|
| Who can mint a dollar stablecoin sold in the US? | No federal license; state money-transmitter or trust rules | Permitted issuers, or registered comparable foreign issuers |
| What backs the coin? | Whatever the issuer disclosed | At least 1:1 in cash, insured deposits, Treasuries of 93 days or less, overnight repos, government money funds |
| How do I know the reserves are there? | Voluntary attestations | Monthly published composition, examined by an accounting firm, certified by the CEO and CFO |
| Can I redeem at face value? | Depends on the issuer | Timely redemption required; fees change only with 7 days' notice |
| If the issuer fails, where am I in line? | Unclear | Holders rank first on the required reserves |
| Does the issuer pay me for holding? | Some programs did | No interest or yield from the issuer |
| Will my exchange still list it? | Yes | From July 18, 2028, only if the issuer qualifies |
All rows are drawn from the statute. For how much of the market these rules touch, see our stablecoin statistics roundup.
Circle (USDC). Circle received conditional OCC approval on December 12, 2025 and final approval on July 10, 2026 to open First National Digital Currency Bank, N.A., per Circle. Its December release said the bank "would oversee the management of the USDC Reserve on behalf of Circle's U.S. issuer" and called the charter a step to "meet requirements under the GENIUS Act," per Circle. A trust charter is not approval as a permitted payment stablecoin issuer; as of September 2026 we have not found a public announcement of that designation, so treat it as in progress.
Tether (USDT). Tether launched a second, US-designed token: USAT went live on January 27, 2026, issued by Anchorage Digital Bank, N.A., per Decrypt, which also reported Tether describing USDT itself as "progressing towards GENIUS Act compliance"; USDT's reserves include Bitcoin and gold, which the Act does not permit. In July 2026 CoinDesk reported that USDT faces the July 2028 clock on US platforms and that Tether representatives did not respond to repeated requests for comment. The status is evolving.
Neither affects whether your coins work today. It affects which tokens US exchanges and wallets may still offer after July 18, 2028.
If you use a prepaid crypto card, the Act touches the token you deposit, not the payment you make. With SolCard, you fund the card by depositing SOL, USDC, or USDT over Solana, or USDC/USDT over Ethereum, BSC, Arbitrum, Base, Polygon, or Avalanche. The deposit is converted when you load, and the balance is held in fiat from then on. A purchase is an ordinary Visa or Mastercard authorization against that fiat balance; it never depends on a live on-chain transaction, and it does not depend on who issued the stablecoin you loaded. Our guide to what a crypto debit card is covers the conversion step.
So the honest read: GENIUS changes the plumbing behind USDC and USDT -- who may mint them, what backs them, how you are treated if an issuer fails -- not the act of tapping a card. If the token you deposit does not qualify after 2028, the change shows up at the exchange that sells it to you, not at checkout.
No. It does not ban holding or spending any stablecoin. It sets a date, July 18, 2028, after which US exchanges and other digital asset service providers may only offer or sell stablecoins from permitted issuers or compliant foreign issuers, per the statute. Which side of that line a token lands on depends on its issuer.
On the earlier of 18 months after enactment or 120 days after regulators issue final rules. Treasury's August 2026 proposed rule says the effective date is expected to be January 18, 2027. The three-year cutoff on offering non-permitted stablecoins begins July 18, 2028.
No. Section 4(a)(11) bars any permitted or foreign issuer from paying a holder "any form of interest or yield ... solely in connection with the holding, use, or retention" of the coin, per the statute. The rule restricts the issuer; it does not tell you what to do with your own coins.
No. MiCA is the European Union's regulation, in force for stablecoins since June 30, 2024, per the EU's official summary. Both require full backing and redemption at face value, but they are separate regimes with separate approvals.
The GENIUS Act is a rulebook for stablecoin issuers, and most of it works in the holder's favor: reserves must be real, short-dated, and published monthly; redemption must be timely; and holders come first if an issuer fails. From July 18, 2028, US platforms will only sell tokens from issuers who follow those rules, and Circle and Tether are at different points on that path. None of it changes what you can do with your coins this week. Our how to pay with crypto guide covers spending.
- Public Law 119-27, the GENIUS Act, enrolled text (govinfo)
- Federal Register 2026-16796: GENIUS Act Regulations on Payment Stablecoin Issuance, Offer, and Sale (Treasury NPRM, August 18, 2026)
- U.S. Treasury: Treasury Seeks Public Comment on GENIUS Act Proposed Rulemaking (August 17, 2026)
- OCC Bulletin 2026-3: GENIUS Act Regulations, Notice of Proposed Rulemaking
- The White House: The President Signed into Law S. 1582 (July 18, 2025)
- SEC: Statement on President Trump Signing the GENIUS Act into Law (July 18, 2025)
- The Block: Treasury issues GENIUS Act rule proposal, seeks comment on state oversight for smaller issuers
- Circle: Circle Receives Final OCC Approval to Establish National Trust Bank (July 10, 2026)
- Circle: Circle Receives Conditional Approval from OCC for National Trust Charter (December 12, 2025)
- Decrypt: Tether Launches US-Regulated USAT Stablecoin Issued by Anchorage Digital (January 27, 2026)
- CoinDesk: Tether's USDT hits 2-year countdown threatening its position on U.S. crypto platforms (July 17, 2026)
- EUR-Lex: European crypto-assets regulation (MiCA) summary
