S. 1582

GENIUS Act

Sponsor: Bill Hagerty

5 cosponsors
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Official summary

Written by the Congressional Research Service.

Guiding and Establishing National Innovation for U.S. Stablecoins Act or the GENIUS Act

This act establishes a regulatory framework for payment stablecoins (digital assets which an issuer must redeem for a fixed value).

Under the act, only permitted issuers may issue a payment stablecoin for use by U.S. persons, subject to certain exceptions and safe harbors. Permitted issuers must be a subsidiary of an insured depository institution, a federal-qualified nonbank payment stablecoin issuer, or a state-qualified payment stablecoin issuer. Permitted issuers must be regulated by the appropriate federal or state regulator. Permitted issuers may choose federal or state regulation; however, state regulation is limited to those with a stablecoin issuance of $10 billion or less.

Permitted issuers must maintain reserves backing the stablecoin on a one-to-one basis using U.S. currency or other similarly liquid assets, as specified. Permitted issuers must also publicly disclose their redemption policy and publish monthly the details of their reserves.

The act specifies requirements for (1) reusing reserves; (2) providing safekeeping services for stablecoins; and (3) supervisory, examination, and enforcement authority over federal-qualified issuers.

The act allows foreign issuers of stablecoins to offer, sell, or make available in the United States stablecoins using digital asset service providers, subject to requirements, including a determination by the Department of Treasury that they are subject to comparable foreign regulations.

Under the act, permitted payment stablecoins are not considered securities or commodities under law. However, permitted issuers are subject to the Bank Secrecy Act for anti-money laundering and related purposes.

(Sec. 3) This section establishes that only payment stablecoin issuers permitted under this act are allowed to issue a payment stablecoin in the United States. Knowing violations of this requirement shall be subject to a fine of up to $1 million for each violation, up to 5 years imprisonment, or both. Treasury may issue regulations establishing limited safe harbors from this requirement that are consistent with the act's purposes, limited in scope, and apply to a de minimus volume of transactions. 

Three years after the date of enactment, digital asset service providers are prohibited from offering or selling stablecoins that are not issued by permitted issuers. Providers are also prohibited from offering, selling, or otherwise making available in the United States a foreign-issued payment stablecoin, unless it complies with requirements provided in section 18 of the act.

(Sec. 4) This section establishes requirements for permitted issuers. Issuers must maintain reserves on a one-to-one basis. Reserves must be comprised of

  • U.S. coins and currency;
  • demand deposits or shares at an insured depository institution;
  • certain Treasury acts, notes, or bonds;
  • money received under certain repurchase agreements or reverse repurchase agreements;
  • certain investment company securities and money market funds invested in certain approved assets on this list;
  • similarly liquid federal assets approved by regulators; or
  • certain listed reserves in tokenized forms. 

Issuers must comply with redemption requirements, such as establishing timely redemption procedures and disclosing such procedures and associated fees. Issuers must also report on the monthly composition of the issuer's reserves. These reports must be examined by a registered public accounting firm and certified by the chief executive officer and chief financial officer of the issuer.

The section prohibits the rehypothecation, or reuse, of reserves with limited exceptions.

Primary federal payment stablecoin regulators (federal regulators) and state payment stablecoin regulators (state regulators), where applicable, must issue regulations to implement capital requirements, liquidity reserve standards, reserve asset diversification standards, and risk management standards.

Issuers are subject to the anti-money laundering and counterterrorism requirements that are applicable to financial institutions.

The section sets forth requirements regarding activities of a permitted issuer, including by prohibiting issuers from providing services on the condition that a customer obtains an additional paid product or service from the issuer or a subsidiary.

Large issuers (those with more than $50 billion in consolidated total outstanding issuance) must publish an audited annual financial statement in accordance with generally accepted accounting principles.

The section prohibits a public nonfinancial services company from issuing payment stablecoins unless the company obtains unanimous approval from the Stablecoin Certification Review Committee.

A state qualified payment stablecoin issuer with a consolidated total outstanding issuance of not more than $10 billion may opt for state regulation if such regulation is substantially similar to the federal regulatory framework under this act. If the issuance exceeds that amount, the issuer must transition to federal regulation, receive a waiver from the federal regulator to remain under state regulation, or stop issuing stablecoins until the issuance is under the threshold.

(Sec. 5) This section establishes requirements for stablecoins issued by subsidiaries of insured depository institutions and certain entities chartered by the Office of the Comptroller of the Currency (OCC) to issue payment stablecoins. Federal regulators must establish an application process and a supervision framework for such entities.

The section sets forth requirements for the review of applications, explanations for denials, and an appeals process.

(Sec. 6) This section sets forth supervision, examination, and enforcement requirements for payment stablecoin issuers under federal supervision. The provisions include reporting on financial conditions, risk management, compliance with the act, and compliance with sanctions and anti-money laundering requirements. The section specifies that payment stablecoin issuers with less than $10 billion in consolidated total outstanding issuance are subject to federal supervision if they are not state qualified payment stablecoin issuers.

The section establishes civil penalties for violations of this act that are committed by those subject to federal supervision.

(Sec. 7) This section establishes state regulatory authority over issuers that qualify for and elect state regulation. The Federal Reserve Board may exercise enforcement authority over state issuers in unusual and exigent circumstances. The OCC must exercise enforcement authority over nonbank state issuers in these circumstances.

(Sec. 8) This section requires foreign issuers to comply with the terms of lawful orders to be allowed to offer, sell, or make available for trading a payment stablecoin in the United States. The section sets forth enforcement and appeal provisions. Treasury may waive the prohibition against the secondary trading of foreign payment stablecoins in the United States from noncompliant foreign issuers on a case-by-case basis if certain criteria are met.

(Sec. 9) Treasury must seek public comment regarding methods, techniques, or strategies for financial institutions to detect illicit activities involving digital assets and perform research and risk assessments on such methods, techniques, or strategies. Treasury must report their legislative recommendations to Congress and the Financial Crimes Enforcement Network must issue rules based on the results.

(Sec. 10) This section establishes requirements for custodial or safekeeping services for payment stablecoin reserves, collateral, and the private keys used to issue stablecoins. Among other requirements, such property must be separately accounted for and not comingled with other assets of the custodian.

(Sec. 11) This section addresses the treatment of payment stablecoins and stablecoin issuers in bankruptcy and insolvency proceedings, including their claim priority, conditions for an automatic stay, and the treatment of reserves as property of the estate.

Federal regulators must also report on topics regarding potential insolvency proceedings of issuers.

(Sec. 12) Federal regulators may, if determined necessary after an assessment, prescribe technical standards for issuers to promote compatibility and interoperability with other issuers and the broader digital finance system.

(Sec. 13) This section requires regulators to issue regulations to carry out the act, with federal and state regulators and Treasury coordinating as appropriate.

(Sec. 14) This section requires Treasury to study and report on nonpayment stablecoins, including endogenously collateralized payment stablecoins (a digital asset the originator of which has represented will be converted, redeemed, or repurchased for a fixed amount of monetary value and that relies solely on the value of another digital asset created or maintained by the same originator to maintain the fixed price).

(Sec. 15) This section requires federal regulators to annually report on payment stablecoin activity trends, the number of payment stablecoin issuer applicants, and the potential financial stability risks to the safety and soundness of the broader financial system posed by payment stablecoin activities.

(Sec. 16) This section defines authorities related to the act, such as by providing that the act does not limit the authority of a depository institution, credit union, national bank, or trust company to issue digital assets to represent deposits or shares.

Federal financial regulators may not require a financial institution to include certain digital assets held in its custody as a liability on financial statements or balance sheets.

(Sec. 17) This section establishes that payment stablecoins issued by permitted issuers are not securities or commodities under federal law.

(Sec. 18) This section provides an exception to the act's prohibition on foreign-issued payment stablecoins. For the exception to apply, foreign issuers must be subject to regulation and supervision by a foreign country that is comparable to the requirements under this act, as determined by Treasury. The foreign issuer must also be registered with the OCC, hold sufficient reserves in a U.S. financial institution (subject to exceptions), and the country where the issuer is domiciled must not be subject to U.S. sanctions.

The section sets forth requirements for Treasury's determination as to whether a foreign country has comparable regulatory and supervisory requirements, including the process of requesting a determination, the deadline for Treasury to render a decision, and the process by which Treasury may rescind a previous determination.

The section also sets forth OCC registration requirements.

Treasury may implement reciprocal or bilateral agreements between the United States and jurisdictions with comparable regulatory requirements.

(Sec. 19) This section requires certain federal employees to disclose holdings over $5,000 of permitted payment stablecoins as part of required financial disclosures.

(Sec. 20) The act takes effect on the earlier of (1) 18 months after the date of enactment, or (2) 120 days after federal regulators issue final regulations implementing the act. 

Text of the bill

Expand all
Sec. 5. Approval of subsidiaries of insured depository institutions and Federal qualified payment stablecoin issuers Changed · Jun 17

Where this section came from

  1. May 5, 2025 · Placed on Calendar Senate
  2. Jun 17, 2025 · Engrossed in Senate S.Amdt. 2307: In the nature of a substitute. Official page › On the Cloture Motion — Cloture Motion Rejected, 48–49 · Roll Call 240On Cloture on the Motion to Proceed — Cloture on the Motion to Proceed Agreed to, 66–32 · Roll Call 262On the Motion to Proceed — Motion to Proceed Agreed to, 69–31 · Roll Call 263On the Cloture Motion — Cloture Motion Agreed to, 68–30 · Roll Call 305On the Motion to Table — Motion to Table Failed, 45–52 · Roll Call 309On the Motion — Motion Agreed to, 64–33 · Roll Call 310On the Amendment — Amendment Agreed to, 67–30 · Roll Call 311On the Cloture Motion — Cloture Motion Agreed to, 67–27 · Roll Call 312On Passage of the Bill — Bill Passed, 68–30 · Roll Call 318
What changed in the text

… 43 unchanged passages …

(h) Relation to other licensing requirements. The provisions of this section supersede and preempt any State requirement for a charter, license, or other authorization to do business with respect to a Federal qualified payment stablecoin issuer or subsidiary of an insured depository institution or credit union that is approved under this section to be a permitted payment stablecoin issuer. Nothing in this subsection shall preempt or supersede the authority of a State to charter, license, supervise, or regulate an insured depository institution or credit union chartered in such State or to supervise a subsidiary of such insured depository institution or credit union that is approved under this section to be a permitted payment stablecoin issuer.

(i) Certification required.

(1) In general. Not later than 180 days after the approval of an application, and on an annual basis thereafter, each permitted payment stablecoin issuer shall submit to its primary Federal payment stablecoin regulator, or in the case of a State qualified payment stablecoin issuer its State payment stablecoin regulator, a certification that the issuer has implemented anti-money laundering and economic sanctions compliance programs that are reasonably designed to prevent the permitted payment stablecoin issuer from facilitating money laundering, including, in particular, facilitating money laundering for cartels and organizations designated as foreign terrorist organizations under section 219 of the Immigration and Nationality Act (8 U.S.C. 1189) and the financing of terrorist activities, consistent with the requirements of this Act.

… 6 unchanged passages …

(a) Application

(1) In general. Each primary Federal payment stablecoin regulator shall—

(A) receive, review, and consider for approval applications from any insured depository institution that seeks to issue payment stablecoins through a subsidiary and any nonbank entity, Federal branch, or uninsured national bank that is chartered by the Comptroller pursuant to title LXII of the Revised Statutes, and that seeks to issue payment stablecoins as a Federal qualified payment stablecoin issuer; and

(B) establish a process and framework for the licensing, regulation, examination, and supervision of such entities that prioritizes the safety and soundness of such entities.

(2) Authority to issue regulations and process applications. The primary Federal payment stablecoin regulators shall, before the date described in section 13—

(A) issue regulations consistent with that section to carry out this section; and

(B) pursuant to the regulations described in subparagraph (A), accept and process applications described in paragraph (1).

(3) Mandatory approval process. A primary Federal payment stablecoin regulator shall, upon receipt of a substantially complete application received under paragraph (1), evaluate and make a determination on each application based on the criteria established under this Act.

(b) Evaluation of applications. A substantially complete application received under subsection (a) shall be evaluated by the primary Federal payment stablecoin regulator using the factors described in subsection (c).

(c) Factors to be considered. The factors described in this subsection are the following:

(1) The ability of the applicant (or, in the case of an applicant that is an insured depository institution, the subsidiary of the applicant), based on financial condition and resources, to meet the requirements set forth under section 4.

(2) Whether an individual who has been convicted of a felony offense involving insider trading, embezzlement, cybercrime, money laundering, financing of terrorism, or financial fraud is serving as an officer or director of the applicant.

(3) The competence, experience, and integrity of the officers, directors, and principal shareholders of the applicant, its subsidiaries, and parent company, including—

(A) the record of those officers, directors, and principal shareholders of compliance with laws and regulations; and

(B) the ability of those officers, directors, and principal shareholders to fulfill any commitments to, and any conditions imposed by, their primary Federal payment stablecoin regulator in connection with the application at issue and any prior applications.

(4) Whether the redemption policy of the applicant meets the standards under section 4(a)(1)(B).

(5) Any other factors established by the primary Federal payment stablecoin regulator that are necessary to ensure the safety and soundness of the permitted payment stablecoin issuer.

(d) Timing for decision; grounds for denial

(1) Timing for decisions on applications

(A) In general. Not later than 120 days after receiving a substantially complete application under subsection (a), a primary Federal payment stablecoin regulator shall render a decision on the application.

(B) Substantially complete

(i) In general. For purposes of subparagraph (A), an application shall be considered substantially complete if the application contains sufficient information for the primary Federal payment stablecoin regulator to render a decision on whether the applicant satisfies the factors described in subsection (c).

(ii) Notification. Not later than 30 days after receiving an application under subsection (a), a primary Federal payment stablecoin regulator shall notify the applicant as to whether the primary Federal payment stablecoin regulator considers the application to be substantially complete and, if the application is not substantially complete, the additional information the applicant shall provide in order for the application to be considered substantially complete.

(iii) Material change in circumstances. An application considered substantially complete under this subparagraph remains substantially complete unless there is a material change in circumstances that requires the primary Federal payment stablecoin regulator to treat the application as a new application.

(2) Denial of application

(A) Grounds for denial

(i) In general. A primary Federal payment stablecoin regulator shall only deny a substantially complete application received under subsection (a) if the regulator determines that the activities of the applicant would be unsafe or unsound based on the factors described in subsection (c).

(ii) Issuance on open, public, or decentralized network not ground for denial. The issuance of a payment stablecoin on an open, public, or decentralized network shall not be a valid ground for denial of an application received under subsection (a).

(B) Explanation required. If a primary Federal payment stablecoin regulator denies a complete application received under subsection (a), not later than 30 days after the date of such denial, the regulator shall provide the applicant with written notice explaining the denial with specificity, including all findings made by the regulator with respect to all identified material shortcomings in the application, including actionable recommendations on how the applicant could address the identified material shortcomings.

(C) Opportunity for hearing; final determination

(i) In general. Not later than 30 days after the date of receipt of any notice of the denial of an application under this section, the applicant may request, in writing, an opportunity for a written or oral hearing before the primary Federal payment stablecoin regulator to appeal the denial.

(ii) Timing. Upon receipt of a timely request under clause (i), the primary Federal payment stablecoin regulator shall notice a time (not later than 30 days after the date of receipt of the request) and place at which the applicant may appear, personally or through counsel, to submit written materials or provide oral testimony and oral argument.

(iii) Final determination. Not later than 60 days after the date of a hearing under this subparagraph, the applicable primary Federal payment stablecoin regulator shall notify the applicant of a final determination, which shall contain a statement of the basis for that determination, with specific findings.

(iv) Notice if no hearing. If an applicant does not make a timely request for a hearing under this subparagraph, the primary Federal payment stablecoin regulator shall notify the applicant, not later than 10 days after the date by which the applicant may request a hearing under this subparagraph, in writing, that the denial of the application is a final determination of the primary Federal payment stablecoin regulator.

(3) Failure to render a decision. If a primary Federal payment stablecoin regulator fails to render a decision on a complete application within the time period specified in paragraph (1), the application shall be deemed approved.

(4) Right to reapply. The denial of an application under this section shall not prohibit the applicant from filing a subsequent application.

(e) Reports on pending applications. Each primary Federal payment stablecoin regulator shall—

(1) notify Congress upon beginning to process applications under this Act; and

(2) annually report to Congress on the applications that have been pending for 180 days or more since the date the initial application was filed and for which the applicant has been informed that the application remains incomplete, including documentation on the status of such applications and why such applications have not yet been approved.

(f) Safe harbor for pending applications. The primary Federal payment stablecoin regulators may waive the application of the requirements of this Act for a period not to exceed 12 months beginning on the effective date of this Act, with respect to—

(1) a subsidiary of an insured depository institution, if the insured depository institution has an application pending for the subsidiary to become a permitted payment stablecoin issuer on that effective date; or

(2) a Federal qualified payment stablecoin issuer with a pending application on that effective date.

(g) Rulemaking. Consistent with section 13, the primary Federal payment stablecoin regulators shall issue rules necessary for the regulation of the issuance of payment stablecoins, but may not impose requirements in addition to the requirements specified under section 4.

(h) Relation to other licensing requirements. The provisions of this section supersede and preempt any State requirement for a charter, license, or other authorization to do business with respect to a Federal qualified payment stablecoin issuer or subsidiary of an insured depository institution or credit union that is approved under this section to be a permitted payment stablecoin issuer. Nothing in this subsection shall preempt or supersede the authority of a State to charter, license, supervise, or regulate an insured depository institution or credit union chartered in such State or to supervise a subsidiary of such insured depository institution or credit union that is approved under this section to be a permitted payment stablecoin issuer.

(i) Certification required

(1) In general. Not later than 180 days after the approval of an application, and on an annual basis thereafter, each permitted payment stablecoin issuer shall submit to its primary Federal payment stablecoin regulator, or in the case of a State qualified payment stablecoin issuer its State payment stablecoin regulator, a certification that the issuer has implemented anti-money laundering and economic sanctions compliance programs that are reasonably designed to prevent the permitted payment stablecoin issuer from facilitating money laundering, in particular, facilitating money laundering for cartels and organizations designated as foreign terrorist organizations under section 219 of the Immigration and Nationality Act (8 U.S.C. 1189) and the financing of terrorist activities, consistent with the requirements of this Act.

(2) Availability of certifications. Federal payment stablecoin regulators and State payment stablecoin regulators shall make certifications described in paragraph (1) available to the Secretary of Treasury upon request.

(3) Penalties

(A) Approval revocation. The primary Federal payment stablecoin regulator or State payment stablecoin regulator of a permitted payment stablecoin issuer that does not submit a certification pursuant to paragraph (1) may revoke the approval of the payment stablecoin issuer under this section.

(B) Criminal penalty

(i) In general. Any person that knowingly submits a certification pursuant to paragraph (1) that is false shall be subject to the criminal penalties set forth under section 1001 of title 18, United States Code.

(ii) Referral to attorney general. If a Federal payment stablecoin regulator or State payment stablecoin regulator has reason to believe that any person has knowingly violated paragraph (1), the applicable regulator may refer the matter to the Attorney General or to the attorney general of the payment stablecoin issuer’s host State.