The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025) is the first federal law regulating stablecoins in the United States. Signed into law in July 2025, it requires stablecoin issuers to maintain 100% reserves backed by U.S. dollars, Treasury bills, or other low-risk assets. The legislation establishes dual federal and state oversight, mandates anti-money laundering compliance, and gives stablecoin holders priority claims over other creditors in bankruptcy proceedings.
Example:
If a company wants to issue a USD-pegged stablecoin under the GENIUS Act, it must hold $1 million in reserves (like U.S. Treasuries or cash) for every $1 million of stablecoins issued. Should the company become insolvent, stablecoin holders would be repaid first before other creditors can make claims.