Home web3.0 A comprehensive understanding of GENIUS stablecoin bill analysis

A comprehensive understanding of GENIUS stablecoin bill analysis

Aug 08, 2025 pm 10:51 PM
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On July 18, 2025, the US President signed the "Guiding and Establishing a US Stable Coin National Innovation Act" (hereinafter referred to as the "GENIUS Act"), marking a historic step in the field of digital asset regulation. As the first federally-level stablecoin special legislation in the United States, the bill aims to establish a comprehensive and clear legal and regulatory framework for "payment-based stablecoins".

A comprehensive understanding of GENIUS stablecoin bill analysis in one article - php Chinese

The introduction of the GENIUS Act not only responds to many pain points and gray areas in the stablecoin regulatory field in the past, but more importantly, it will profoundly reshape the entire stablecoin market structure and have a profound impact on the global digital asset market. The passage of the bill reflects a broad cross-party consensus that stablecoins have entered the mainstream financial field and require special federal supervision to ensure their healthy development. At the same time, they are also working hard to maintain the financial competitiveness of the United States and the dominance of the US dollar in global finance.

Analysis of core terms: clear definition and strict supervision

The GENIUS Act clearly defines a "payment-type stablecoin" as a digital asset that is value-anchored to a fixed fiat currency (such as the US dollar) and promises to be redeemed at a fixed amount, mainly for payment or settlement. A series of core provisions of the bill aim to address industry pain points and build market confidence:

  1. Issuer License System:

The bill stipulates that in the future, the issuer must obtain the "Permission Payable Stable Coin Issuer" (PPSI) qualification or meet certain exemptions. This includes bank subsidiaries and federally approved non-bank institutions. This sets a clear entry threshold for the issuance of stablecoins and ensures compliance of the issuing entities.

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  1. Reserve Asset Requirements:

All licensed payment stablecoin issuers must maintain reserves at a ratio of at least 1:1, and reserve assets are limited to low-risk assets such as cash, Federal Reserve accounts, FDIC deposits, U.S. Treasury bonds with a term of not exceeding 90 days and their related repurchase agreements. Reserved assets shall not be repeatedly mortgaged or misappropriated, which is intended to ensure that users can redeem at any time and prevent the risk of "deaning" or runs.

  1. "Dual Track" supervision model:

The bill adopts the dual-track regulatory model of "federal states". Non-bank institutions with issuance balances below $10 billion can choose to meet the standards state regulatory system; once the scale exceeds $10 billion, they must be converted to federal supervision within the specified time. This move aims to solve the problem of "50 states fragmentation", retain state innovation space, and implement unified and prudent supervision of large issuers.

  1. Bankruptcy quarantine and user protection:

The GENIUS Act has amended the law to give stablecoin reserve assets trust property status, ensuring that the holder has the right to priority redemption when the issuer goes bankrupt. This solved the problem that stablecoin holders lacked explicit security barriers when the issuer went bankrupt, greatly improving the trustworthiness of stablecoins.

  1. Payment of interest to coin holders is prohibited:

The bill explicitly prohibits the payment of interest, dividends or other return mechanisms to stablecoin holders. This aims to position the stablecoin as a payment tool rather than a financial product, avoid direct competition with the deposited funds, and consolidate its legal attributes that are not securities.

A comprehensive understanding of GENIUS stablecoin bill analysis in one article - php Chinese

Market impact and compliance considerations

The implementation of the GENIUS Act is expected to have a profound impact on the stablecoin market:

  1. Industry integration accelerates:

The new regulations will raise the industry threshold, small or non-compliant issuers will face survival challenges, and market integration and survival of the fittest will accelerate. For example, USDC and other transparent stablecoins issued and reserved by licensed institutions will be easier to gain the trust of users and institutions and will be more widely used in scenarios such as payment and cross-border remittance. Stablecoins such as USDT and DAI, which have previously had a vague regulatory path or are difficult to meet the new regulations, may face the risk of usage restrictions or market share in the US market.

  1. Compliance costs and user protection:

Compliant issuers need to invest more resources to meet requirements such as reserves, reporting and audits, which may increase issuance costs. But at the same time, strict reserve requirements and bankruptcy isolation mechanism will greatly improve the security of user assets and enhance the overall market confidence in stablecoins.

  1. Promote the international status of the US dollar:

One of the major goals of the GENIUS Act is to consolidate the dollar’s dominance in the global digital economy and create sustained demand for U.S. Treasury bonds. By incorporating stablecoins into the "dollar-US debt" cycle, the United States is expected to expand the use scenarios of the US dollar in global payments.

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