crs_reports: R49351

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R49351 GENIUS Act (P.L. 119-27): Creating a Regulatory Framework for Stablecoins 2026-09-17T04:00:00Z 2026-09-19T16:52:51Z Active Reports Paul Tierno, Marc Labonte   The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) was signed into law as P.L. 119-27 on July 18, 2025. The act creates a regulatory structure for payment stablecoins. Stablecoins are cryptocurrencies that aim to maintain a fixed value against some other asset, such as the U.S. dollar. Currently, they are used primarily to facilitate the trading of other cryptocurrencies, but proponents of the act believe that a regulatory framework could spur their adoption for retail payments and other non-crypto applications. However, depending on future rulemaking, various exemptions in the act combined with current market practices could limit how much of the existing market becomes subject to the act. The GENIUS Act mainly regulates issuers. Under the act, anyone can issue a stablecoin in the United States if they are approved and regulated by a federal regulator or a certified state regulator. Issuers can be divided into three groups—depository institutions, nonbank financial firms, and commercial firms. During the congressional debate before passage of the bill, its most contentious aspects involved its approach to certain policy issues, including the following: Preventing illicit finance. The act subjects issuers to anti-money-laundering laws, such as those mandating the monitoring and reporting of suspicious activity, and requires stablecoins issuers to be capable of complying with lawful orders. Given the pseudonymous nature of crypto, it is unclear how illicit activity can be effectively prevented in the secondary market to which issuers are not party. Foreign stablecoins. Foreign issuers are not required to be regulated under the U.S. regime. If they wish to be available to U.S. persons through intermediaries, they must be regulated in a country with a regulatory regime that the Treasury Secretary has certified as comparable to the U.S. regime, register with the Office of the Comptroller of the Currency, and be capable of complying with lawful orders. Eligibility of commercial firms. Congress debated whether commercial firms, such as big tech companies, should be permitted to issue stablecoins. The Stablecoin Certification Review Committee (SCRC), led by the Treasury Secretary, may approve commercial firms that meet various criteria. Federal versus state regulation. The act requires issuers that are subsidiaries of insured depositories (banks and credit unions that accept deposits) to be federally regulated. The act allows non-depository issuers with under $10 billion in stablecoins outstanding to choose between state and federal regulation. Once such issuers exceed $10 billion, they would transition to joint state-federal supervision, unless the federal supervisor waives its right to supervise. States’ regulatory regimes must be approved by the SCRC. Conflicts of interest. Controversy over a stablecoin issued by a company sponsored by President Trump led to debate about whether companies with ties to government officials and Members of Congress should be permitted to issue stablecoins. The act references, but does not change, existing government ethics laws. Banning yield. Banks fear that if stablecoins pay yield to customers, this will drain deposits from the banking system. The act prohibits issuers from paying yield directly to customers but does not explicitly prohibit exchanges—where many users purchase and hold their stablecoins—from paying yield to their customers. The current stablecoin market is dominated by two companies—Circle, a U.S. company, and Tether, licensed in El Salvador. Thus, the act’s near-term impact will largely be based on how these two issuers are treated under its provisions. This depends, first, on whether rulemaking considers stablecoins that are primarily used for crypto trading, but not retail payments, to be payment stablecoins and thus subjects the companies to the act’s licensure requirements (unless they voluntarily choose to seek a license). Second, if Tether is considered to be a payment stablecoin and wishes to continue to be available to U.S. persons on exchanges, its availability depends on whether the Treasury Secretary finds El Salvador to have a regulatory regime comparable to the U.S. regime. https://www.congress.gov/crs_external_products/R/PDF/R49351/R49351.2.pdf https://www.congress.gov/crs_external_products/R/HTML/R49351.html

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