GENIUS Act

GENIUS Act

The GENIUS Act, short for Guiding and Establishing National Innovation for U.S. Stablecoins Act, is a U.S. law that creates clear rules for stablecoins, a type of cryptocurrency designed to keep a steady value, usually pegged to the U.S. dollar.

Signed into law on July 18, 2025, the GENIUS Act aims to boost public trust in digital currencies by requiring stablecoin issuers to follow strict guidelines. These include:

  • 1:1 Reserve Requirements: Issuers must hold a matching amount of real assets (like U.S. dollars or Treasury bills) for every stablecoin they issue.
  • Regular Audits and Disclosures: Reserves must be kept in separate accounts and reviewed by outside auditors, with monthly reports shared publicly.
  • Ban on Algorithmic Stablecoins: The Act prohibits stablecoins that rely on algorithms instead of actual reserves to maintain their value.
  • Dual Oversight: Both federal and state regulators oversee stablecoin issuers, ensuring accountability.
  • AML/CFT Compliance: Issuers must follow anti-money laundering rules and prevent misuse for illegal purposes.

One major impact of the GENIUS Act is its influence on the U.S. Treasury market. Since stablecoin issuers must hold safe and liquid assets, many will choose short-term U.S. Treasury bills. These are low-risk government bonds that are easy to buy and sell. As the demand for regulated stablecoins grows, so will the demand for Treasury bills.

This shift could help the U.S. government by lowering its borrowing costs and giving it more flexibility when issuing debt. It also brings stablecoins closer to the traditional financial system, offering users more safety and transparency than unregulated or algorithmic alternatives.

The GENIUS Act marks a big step toward making digital dollars safer and more reliable for everyday use.

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Disclaimer: This post is for informational purposes only and does not constitute financial, legal, or investment advice. Please consult a qualified professional for guidance tailored to your situation.

For personalized support, contact GLOBAL ABAS Consulting, LLC with your specific questions or concerns.

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