The Genius Act Turns One Year Old on July 18 – Here is What Us Stablecoin Law Actually Changed
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Written by
Simonas Brazionis - Updated 2026-06-29 13:09:04
The Guiding and Establishing National Innovation for U.S. Stablecoins Act was signed into law on July 18, 2025, becoming the first comprehensive federal framework for stablecoin regulation in U.S. history. With the law's first anniversary approaching on July 18, 2026, the deadline is now pressing: all primary federal regulators must have their implementing regulations completed and submitted to Congress by that date. The Treasury Department's FinCEN and OFAC have already issued a joint proposed rule implementing anti-money laundering and sanctions compliance requirements for permitted payment stablecoin issuers.
The law passed with strong bipartisan support – 68 to 30 in the Senate and 308 to 122 in the House. It defines payment stablecoins as digital assets designed for use as a means of payment, backed one-for-one by U.S. dollars or other low-risk assets, and requires issuers to hold identifiable reserves, publish monthly reserve compositions, and maintain clear redemption policies.
One year on, the impact on market structure is already visible. Circle's USDC on-chain volume rose more than 250% year-over-year to over $21 trillion, capturing approximately 63% of global stablecoin market share. Stablecoin market cap has grown to roughly $300 billion globally, and the technology is now processing more transaction volume annually than Visa and Mastercard combined.
What the Law Actually Requires
The GENIUS Act creates a dual-track regulatory system. Issuers with less than $10 billion in outstanding stablecoin issuance can choose state-level regulation, provided the state framework is certified as substantially similar to the federal standard. Issuers above that threshold must come under federal oversight from the OCC, Federal Reserve, or FDIC depending on their structure.
The law explicitly prohibits stablecoin issuers from paying interest or yield to holders – a provision designed to prevent stablecoins from functioning as unregulated deposit products. It also restricts issuance by large non-financial public companies, a clause directed at preventing technology giants from issuing their own digital currencies outside the banking framework.
Permitted issuers must maintain a 1:1 reserve ratio in U.S. dollars, Treasury bills, or other specified low-risk instruments. The reserves cannot be rehypothecated in most circumstances. This requirement directly addresses the concern that arose from the 2022 collapse of TerraUSD, where an algorithmic stablecoin with no real reserves wiped out roughly $40 billion in market value in 72 hours.
Winners and Losers One Year in
Circle and Tether are the clear winners. Both already operated with full reserve backing before the law passed, and their compliance-ready infrastructure gave them a head start over competitors. Circle in particular has benefited from the law's legitimacy signal – institutional clients who previously hesitated to use stablecoins in treasury operations are now comfortable with USDC in ways they were not before federal law existed.
The losers are smaller issuers who cannot afford the compliance infrastructure, and algorithmic stablecoin projects which the law effectively bans from the U.S. market. Galaxy Digital lowered its estimated probability of the companion CLARITY Act on crypto market structure becoming law in 2026 to 50%, suggesting that the broader regulatory picture for crypto beyond stablecoins remains uncertain.
What to Watch
July 18 is the hard deadline for all implementing regulations. Any agency that misses the deadline must explain to Congress why. The stablecoin market will be watching whether the OCC's final rules for nonbank issuers are published on time – that determination will define how quickly fintech companies and banks can bring new products to market.
For individual holders, the GENIUS Act matters because it defines which stablecoins can legally operate in the U.S. market going forward. Understanding what is cryptocurrency and how regulated stablecoins differ from unregulated alternatives is increasingly important as the line between crypto and traditional payments blurs. The practical implication is straightforward: best crypto exchanges are now required to verify that any stablecoin they list meets the GENIUS Act's reserve and issuer requirements.
