¶ 3701
Overview
Scope of the chapter. This chapter examines the law that governs the issuance of stablecoins and the state licensing regimes that govern the businesses that deal in them. Its first and larger part is a section-by-section treatment of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act), Pub. L. No. 119-27, 139 Stat. 419 (2025) (codified at 12 U.S.C. §§ 5901-5916), enacted on July 18, 2025, and of the implementing rules the federal agencies proposed and adopted through October 2026. Its second part treats the enforcement record that preceded the Act, the state regimes for money transmission and virtual-currency business, and the way the Act allocates authority between federal and state regulators. The chapter closes with checklists for issuers and for persons who hold stablecoins for themselves or for others.
Why stablecoins receive their own statute. A stablecoin is a token whose issuer promises that it can be exchanged for a fixed amount of a national currency. The promise makes the token useful as a means of payment and as a settlement asset on a distributed ledger. It is also the source of the principal legal risks the token carries. If the issuer does not hold assets sufficient to honor the promise, holders who redeem first are paid and holders who redeem later are not. Before 2025 no federal statute addressed that risk directly. Issuers in the United States operated under state money-transmission licenses or state trust charters, and the federal agencies reached stablecoins only through the securities, commodities and anti-money-laundering laws, each of which was designed for a different problem. The Act replaces that arrangement with a licensing regime aimed at the redemption promise itself: who may make it, what assets must back it, how quickly it must be honored and the rank of holders if the issuer fails.
The structure of the Act. The Act has twenty sections. Section 2 defines the terms on which everything else depends, including "payment stablecoin," "permitted payment stablecoin issuer" and "digital asset service provider." Section 3 makes it unlawful for anyone other than a permitted issuer to issue a payment stablecoin in the United States and, from July 18, 2028, for a digital asset service provider to offer or sell a payment stablecoin that a permitted issuer did not issue. Section 4 sets the substantive standards: reserves, redemption, disclosure, capital, anti-money-laundering obligations, a limit on activities and a prohibition on paying interest or yield to holders. Sections 5 through 7 provide for approval and supervision of three kinds of issuer: subsidiaries of insured depository institutions, federal qualified issuers licensed by the Comptroller of the Currency, and state qualified issuers licensed by a state. Sections 8 through 11 address anti-money-laundering protections, custody of stablecoins and reserves, and the treatment of holders in an issuer's insolvency. Section 17 amends the securities and commodities statutes to exclude a permitted issuer's payment stablecoin, and section 18 provides for foreign issuers. Section 20 fixes the effective date.
The effective date and the state of the rules. The Act takes effect on the earlier of eighteen months after enactment or 120 days after the primary federal payment stablecoin regulators issue final regulations implementing it. GENIUS Act § 20. Eighteen months after July 18, 2025 is January 18, 2027. The Comptroller of the Currency published its final implementing rule on October 23, 2026, with an effective date of January 18, 2027, and stated that "[t]he GENIUS Act will be effective on January 18, 2027." Implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the Office of the Comptroller of the Currency, 91 Fed. Reg. 67,000, 67,001 (Oct. 23, 2026) (to be codified at 12 C.F.R. pt. 15). At the date this chapter states the law, the Treasury, the Federal Deposit Insurance Corporation, the Federal Reserve Board, the National Credit Union Administration and the Financial Crimes Enforcement Network had proposed rules but had not finalized them, and the Stablecoin Certification Review Committee had adopted interim procedures for reviewing state certifications. The chapter identifies each rulemaking where it bears on a question. Readers should confirm the status of any proposal before relying on it.
Relation to other chapters. The taxonomy of stable-value assets appears in ch. 1 (¶ 140). Custody of stablecoins and reserves is treated in chs. 9 and 11; the insolvency priority for holders in ch. 27; anti-money-laundering obligations and the travel rule in chs. 33 and 34; the securities-law treatment of algorithmic stablecoins in ch. 35; and the commodities treatment in ch. 36. Chapter 25 discusses the lawful-order provisions as a recovery tool. This chapter refers to those discussions and does not repeat them.