The GENIUS Act: what it means for businesses using stablecoins

Last updated October 12, 2026

The GENIUS Act, signed July 18, 2025, makes payment stablecoins a licensed product. Only permitted issuers can issue in the US. They must hold 1:1 reserves in cash-like assets, publish monthly reserve reports, follow BSA rules, and can't pay holders interest. It takes effect by January 18, 2027 at the latest.

Break free How it works

Stablecoins just got a rulebook. If you take or send them, your bank will read it before you do.

What is the GENIUS Act?

A federal law for payment stablecoins, S.1582, enacted July 18, 2025 as Public Law 119-27 (Congress.gov). A payment stablecoin is a digital asset used for payment or settlement that the issuer must redeem for a fixed amount of money. Deposits, securities and national currency are excluded from the definition.

Who can issue a payment stablecoin?

Only a permitted payment stablecoin issuer (Sec. 3):

A subsidiary of an insured depository institution
A federal qualified issuer approved by the OCC
A state qualified issuer under a qualifying state regime

Three years after enactment, digital asset service providers can't offer or sell a payment stablecoin in the US unless a permitted issuer issued it, with limited exceptions.

What must issuers do?

Under Sec. 4:

1:1 reserves in cash, Fed balances, demand deposits, short-term Treasury bills (93 days or less) and certain repos and money market funds
Monthly public reserve reports, examined by a registered public accounting firm
No rehypothecation of reserves, with narrow exceptions
Bank Secrecy Act duties, as if the issuer were a financial institution
No interest or yield paid to holders

Is a payment stablecoin a security?

No. Sec. 17 says a payment stablecoin from a permitted issuer is not a security or a commodity under the federal securities and commodities laws.

When does it take effect?

On the earlier of 18 months after enactment (January 18, 2027) or 120 days after the regulators issue final rules (Sec. 20). As of October 11, 2026, rules are still being proposed, for example OCC Bulletin 2026-3. Plan for January 18, 2027 at the latest.

What does it mean for a business that uses stablecoins?

Expect banks and on- and off-ramp providers to ask which coins you hold and who issued them.
Treat a non-permitted coin as a problem coming, not a loophole.
Moving value for others can still make you a money transmitter. See crypto on- and off-ramps.

How Break Free Finance helps

We're not a bank, processor, or money transmitter. We structure the deal, build the file a bank can underwrite, and place it with institutions in our network: decades of relationships with 40+ financial institutions and solution providers. The institution makes the decision, and approval is never guaranteed. Talk to us.

Sources (last checked October 11, 2026)

General information, not legal or compliance advice.

Sources

GENIUS Act, S.1582, Pub. L. 119-27 (enacted July 18, 2025), enrolled text · accessed 2026-10-11
OCC Bulletin 2026-3, GENIUS Act proposed rule · accessed 2026-10-11

What this means for your file

The facts above are what an underwriter can check. We use them to build the file and place it with an acquiring bank that already takes the MCC. The bank still decides.

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Questions

When does the GENIUS Act take effect?

On the earlier of January 18, 2027 (18 months after enactment) or 120 days after regulators issue final rules. As of October 2026, agencies are still at the proposal stage.

Can stablecoin issuers pay interest?

No. Permitted issuers can't pay holders interest or yield on payment stablecoins.

Is a payment stablecoin a security?

The Act says a payment stablecoin issued by a permitted issuer is not a security or a commodity under the federal securities and commodities laws.

Who can issue a payment stablecoin?

Subsidiaries of insured depository institutions, federal qualified issuers approved by the OCC, and state qualified issuers under a state regime.