US Congress Passes GENIUS Act, First Major Cryptocurrency Regulation

The US House of Representatives has passed the GENIUS Act, a bill that establishes rules for issuers of stablecoins, a type of coin pegged to a $1 valuation. The bill requires issuers to collateralize stablecoins with low-risk assets, provide accounts to a state or federal regulator, and maintain anti-money laundering controls. If enacted, the bill will help to protect stablecoin holders from fraud and reckless mismanagement, and help to prevent them from being abused by criminal actors.

The US House of Representatives has passed the Guiding and Establishing National Innovation for US Stablecoins Act, or the “GENIUS Act,” on July 17, 2025. This landmark legislation aims to establish a comprehensive regulatory framework for stablecoin issuers, a type of cryptocurrency pegged to a $1 valuation. The bill, which is now awaiting President Donald Trump's signature, introduces significant requirements for issuers and transactors of stablecoins.

Key provisions of the GENIUS Act include:

1. Collateralization: Issuers of stablecoins will be required to collateralize their coins with low-risk assets. This ensures that the value of the stablecoins remains stable and protects investors from fraud and mismanagement.

2. Regulatory Oversight: Stablecoin issuers must provide accounts to either a state or federal regulator. This oversight is crucial for monitoring the activities of issuers and ensuring compliance with anti-money laundering (AML) controls.

3. Anti-Money Laundering (AML) Controls: The GENIUS Act mandates that issuers implement robust AML controls to prevent the abuse of stablecoins by criminal actors.

The passage of the GENIUS Act marks a significant step forward in the regulation of stablecoins in the United States. The bill addresses the need for a structured and consistent regulatory environment to protect both investors and the broader financial system. The timeline for implementation includes a prohibition on issuing payment stablecoins until November 2026, followed by a period of rulemaking and certification by various regulatory bodies.

While the bill has passed the House, it is essential to note that the regulatory landscape for stablecoins remains complex and evolving. The GENIUS Act provides a foundation for future regulations, but the final details will depend on the actions of the regulatory agencies and the president's signature.

For more information on the GENIUS Act, refer to the LawFlash provided by Morgan Lewis [1].

References:
[1] https://www.morganlewis.com/pubs/2025/07/genius-act-passes-in-us-congress-a-breakdown-of-the-landmark-stablecoin-law