The GENIUS Act creates the U.S. regulatory framework for payment stablecoin issuers to operate in the U.S. or for foreign entities to offer stablecoins to U.S. residents. While the GENIUS Act clarifies much, financial regulators must now write rules that will determine if stablecoins can gain trust and contribute to a more efficient, lower cost payments system, or if they will continue to be used mainly for crypto trading and for users in some countries to more easily access U.S. dollars.
The GENIUS Act makes clear that payment stablecoins are neither a security nor a national currency, nor do they have deposit insurance or access to Federal Reserve payment services. The law says that payment stablecoin issuers can be nonbank entities (federal or state qualified) or subsidiaries of insured depository institutions (IDIs). Issuers’ activities are restricted to offering and…
