The GENIUS Act is the US federal law for “payment stablecoins,” the dollar tokens people use to move money on-chain. It was signed on 18 July 2025 and takes effect on 18 January 2027. It requires issuers to be licensed, to hold reserves at least 1:1 in cash and short-term Treasuries, to publish monthly reserve reports, and not to pay interest to holders. On 21 October 2026 the OCC issued its final rule implementing the law. Nothing changes overnight for people holding USDT, USDC or PYUSD. The bigger deadline for exchanges is 18 July 2028.
Key takeaways
- Enacted as Public Law 119-27 on 18 July 2025. The OCC’s Bulletin 2026-50 gives the Act’s effective date as 18 January 2027.
- The OCC’s final rule (21 October 2026, effective 18 January 2027) covers reserves, redemption, risk management, custody, capital and foreign issuers. AML and sanctions rules will come separately, together with Treasury.
- Issuers can’t pay holders interest or yield. The final rule offers no safe harbour for exchange “rewards” and doesn’t grandfather existing programmes.
- From 18 July 2028, US exchanges and wallets may offer only stablecoins from permitted issuers or from qualifying foreign issuers.
- Payment stablecoins aren’t securities or commodities under the Act, and they aren’t federally insured. Holders do get first priority on reserves if an issuer goes bankrupt.
The GENIUS Act in one paragraph
The Guiding and Establishing National Innovation for U.S. Stablecoins Act makes it illegal for anyone except a “permitted payment stablecoin issuer” to issue a payment stablecoin in the United States. The law defines that as a digital asset used for payment or settlement and redeemable at a fixed amount, such as $1. Permitted issuers can be bank subsidiaries, federally licensed nonbanks or state-licensed nonbanks. Each one must keep reserves, disclose them, redeem on request and follow anti-money-laundering law. The Act deals only with stablecoins. Rules for crypto trading markets in general belong to a separate market-structure bill, explained in our guide to the CLARITY Act. For a refresher on how stablecoins work, start with our stablecoin guide.
What the GENIUS Act requires of stablecoin issuers
The Congressional Research Service’s overview (updated 20 August 2026) summarises the main obligations:
| Requirement | What the Act says | Why holders care |
|---|---|---|
| Reserves | At least $1 of permitted reserves for every $1 issued. Permitted reserves are cash, insured deposits, short-dated Treasury bills, Treasury-backed repos, government money-market funds and central-bank reserves | Excludes the commercial paper, secured loans and bitcoin that some issuers have held in the past |
| Disclosure | Periodic (monthly) reports on tokens outstanding and reserve composition, certified by executives and examined by a registered public accounting firm. Issuers with more than $50 billion outstanding also need audited annual financial statements | You can check the backing yourself every month |
| Redemption | Issuers must set and publish clear redemption procedures | A defined route back to dollars |
| No interest | Issuers can’t pay holders interest or yield “solely in connection with the holding, use, or retention” of the coin | The token is meant to work as money, not as a savings product |
| Bankruptcy priority | Holders’ claims rank ahead of all other claims against the issuer | Better recovery odds than an ordinary unsecured creditor |
| AML and sanctions | Issuers are covered by the Bank Secrecy Act and must be able to freeze or block tokens when lawfully ordered | Tokens linked to crime or sanctions can be frozen |
| Naming | No names that suggest the US government issues or guarantees the coin | Payment stablecoins aren’t FDIC-insured |
Issuers choose between two supervisory routes. A nonbank issuer with less than $10 billion outstanding can stay with a state regulator, as long as the state’s regime is certified as “substantially similar” to the federal one. Above that size, it has to move to federal oversight unless it gets a waiver. Federally supervised nonbanks fall under the OCC. Bank subsidiaries stay with their usual banking regulator. Under the CRS summary, a federal application that regulators don’t act on within 120 days is treated as approved.
The rulemaking timeline to January 2027
A law of this kind only works once regulators write the detailed rules. Here’s where that stood in late October 2026:
| Date | Step | Status |
|---|---|---|
| 18 Jul 2025 | GENIUS Act signed (P.L. 119-27) | Enacted law |
| 25 Feb 2026 | OCC proposes its implementing rule (published in the Federal Register on 2 Mar 2026) | Superseded by the final rule |
| Apr 2026 | Treasury proposes rules on issuer AML and sanctions programmes and on how to judge “substantially similar” state regimes. The FDIC proposes rules for issuers it supervises, with comments due by 9 Jun 2026 | Proposals. We couldn’t confirm final versions as of this writing |
| 18 Jul 2026 | Statutory deadline for regulators to issue implementing rules | Several agencies missed it, according to press reports |
| 21 Oct 2026 | OCC final rule (Bulletin 2026-50), creating a new 12 CFR Part 15 | Final rule |
| 18 Jan 2027 | Act and OCC rule take effect | Scheduled |
| 18 Jul 2028 | US digital-asset service providers may offer only permitted (or qualifying foreign) payment stablecoins | Scheduled, per the statute and Treasury’s Section 3 proposal |
The statute’s effective date is the earlier of 18 January 2027 or 120 days after final regulations are issued. The OCC’s bulletin gives 18 January 2027. The OCC also changed some details from its proposal. The final rule takes a principles-based approach to reserve diversification, while still requiring minimum daily liquidity and limits on concentration with any single counterparty. It adds a capital and operational backstop. The OCC said it would announce separately when it starts accepting applications.
Foreign issuers and Tether’s position
The Act lets foreign issuers’ coins circulate in the US, but only with conditions. Treasury may recognise foreign regimes as “comparable” through reciprocal arrangements. The issuer must register with the OCC, which the final rule now covers in its foreign-issuer examination provisions, and it must be able to comply with lawful US orders, including freezes. US exchanges can list a foreign payment stablecoin only if it meets those conditions.
That’s why Tether, the issuer of USDT and based outside the US, matters so much here. In late January 2026 it launched a separate US token, USAT, issued by Anchorage Digital Bank, a federally chartered bank, with Cantor Fitzgerald named as reserve custodian. At launch, Tether said USDT itself was “progressing towards GENIUS Act compliance.” Whether USDT qualifies under the foreign-issuer route depends on Treasury’s comparability findings and OCC registration, and neither had been publicly settled as of October 2026. The USDT vs USDC comparison covers the two tokens’ reserve histories.
Interest, rewards and the yield question
The statute bans issuers from paying interest. CRS points out that it doesn’t stop exchanges from paying their own customers. That gap is behind the current “rewards” programmes, such as PayPal’s PYUSD rewards and exchange-paid balances on USDC and other coins. The OCC’s February 2026 proposal would have presumed that some issuer payments to affiliates or third parties that then reach holders broke the ban. According to Genfinity’s 21 October summary, the final rule drops those presumptions but also “declines to presume that rewards programs that predated the GENIUS Act comply.” Each arrangement will be judged on its own facts, and the OCC has said it can act against evasion.
In practice, any reward rate you see on a stablecoin balance is a promotional term set by a platform. It isn’t interest guaranteed by the issuer, and it could be changed or dropped as supervisors review these programmes. Congress could still change the yield wording in market-structure legislation.
What changes for people who hold stablecoins
Here’s what the January 2027 timeline means for four widely held dollar coins, based only on public, dated statements:
- USDC (Circle). The OCC gave Circle final approval for a national trust bank on 10 July 2026. Circle said the bank would start with custody, and that managing the USDC reserve would come in a later phase. USDC is a US-issued coin that can apply as a permitted issuer.
- PYUSD (Paxos for PayPal). Paxos says it received an OCC national trust charter in December 2025. Its token already publishes regular reserve reports. The main open question is PayPal’s holder rewards under the yield rules.
- USDT (Tether). USDT is a foreign issuer’s coin, with USAT as Tether’s US-regulated alternative. From July 2028, whether US platforms can keep listing USDT depends on whether it meets the foreign-issuer conditions.
- Crypto-collateralised or synthetic dollars (for example Sky’s USDS or Ethena’s USDe). Their backing doesn’t match the Act’s permitted-reserve list. As currently designed, they don’t fit the “payment stablecoin” model, so US platforms’ handling of them after 2028 is uncertain.
What to do as a holder: keep redemption and withdrawal routes you understand, read your platform’s notices about delistings or conversions, and treat reward rates as temporary. Stablecoins remain uninsured. Our explainer are stablecoins safe? goes through depeg and issuer risk, and the stablecoin hub links our coverage of individual coins. This page summarises public law and agency documents. It isn’t legal advice.
FAQ
When does the GENIUS Act take effect?
The Act became law on 18 July 2025. It takes effect on the earlier of 18 January 2027 or 120 days after regulators issue final rules, and the OCC’s October 2026 bulletin gives 18 January 2027. A separate deadline, 18 July 2028, is when US exchanges and wallets must stop offering stablecoins from issuers that aren’t permitted or don’t qualify as foreign issuers.
What is a permitted payment stablecoin issuer?
It’s an entity approved to issue dollar stablecoins in the US: a subsidiary of an insured bank, a federally qualified nonbank supervised by the OCC, or a state-qualified issuer with less than $10 billion outstanding under a certified state regime. All of them must meet the reserve, disclosure, redemption and anti-money-laundering requirements.
Does the GENIUS Act ban stablecoin yield?
It bans issuers from paying holders interest or yield just for holding the coin. It doesn’t expressly cover exchanges or other third parties. The OCC’s final rule doesn’t create a safe harbour for those rewards and doesn’t grandfather existing programmes, so supervisors will review each arrangement individually.
What did the OCC GENIUS Act rule decide?
The OCC’s final rule, announced in Bulletin 2026-50 on 21 October 2026 and effective 18 January 2027, sets standards for issuers’ activities, reserves, redemption, risk management, audits, custody, capital and applications. It also covers foreign-issuer supervision. AML and sanctions rules will follow in a separate rulemaking with Treasury.
Crypto is volatile and risky; this is education, not financial advice. Do your own research.
