U.S. Implements GENIUS Act to Regulate Stablecoins with Full Dollar Backing

The U.S. government is moving forward with the implementation of the GENIUS Act, a newly enacted piece of legislation designed to regulate stablecoins by requiring them to be fully backed by U.S. dollars or equivalent liquid assets. Signed into law by President Donald Trump on July 18, 2025, the act marks the first federal regulatory framework for payment stablecoins and mandates that issuers with a market cap exceeding $50 billion conduct annual audits to ensure compliance [1].

Under the guidance of the U.S. Treasury Department, the next phase of the implementation involves public engagement. The department is seeking feedback from stakeholders to shape the rules and compliance standards for stablecoin issuers. This initiative also aims to identify cost-effective tools for detecting and preventing illicit financial activities, such as money laundering [2]. The Treasury explicitly encourages regulated financial institutions to submit innovative methods currently used or potentially useful for identifying illegal stablecoin transactions [3].

U.S. Treasury Secretary Scott Bessent has underscored the strategic importance of stablecoins in enhancing the global influence of the U.S. dollar. He emphasized that these digital assets could facilitate transactions for billions of people worldwide while reinforcing the need for strong oversight to ensure financial stability [4]. The 60-day public comment period is a key part of this process, as it will provide valuable insights that will inform the development of enforceable and practical regulations.

The implementation of the GENIUS Act is not immediate. It will take effect either when relevant agencies finalize their policies or after an 18-month grace period, whichever comes first. This transition period allows for a phased approach to integrating the new regulatory framework without disrupting market operations [1].

Compliance under the act also places new responsibilities on stablecoin issuers. The law requires them to maintain U.S. Treasury bonds in their portfolios, making the Treasury a central figure in the regulation process. Additionally, the requirement for independent audits could influence the operational structures of large stablecoin platforms, many of which already hold significant amounts of U.S. government securities [5].

Experts anticipate that, despite the uncertainties in the early stages, the GENIUS Act will likely bring meaningful changes to the stablecoin market. As the Treasury compiles the feedback and prepares its report for senior lawmakers, the final regulatory guidance will likely reflect a balance between innovation and risk management.