The U.S. House of Representatives has passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act—also known as the GENIUS Act—just minutes after approving the landmark Digital Asset Market Clarity Act (CLARITY Act).
(Photo credit: Zaller Law Group).
Together, the two pieces of legislation represent the most comprehensive federal action yet on digital assets and blockchain-based financial infrastructure.
The GENIUS Act, which cleared the House 308 to 122, is designed to establish a national framework for the issuance and oversight of payment stablecoins. These are blockchain-based digital assets that maintain a stable value by being backed 1:1 with monetary reserves. The legislation is aimed at reducing financial risks while encouraging innovation in the digital economy.
Under the act, only federally or state-approved entities will be allowed to issue payment stablecoins in the U.S. Stablecoin issuers must meet strict reserve backing requirements, submit to regular audits, and maintain detailed public disclosures. The bill explicitly bars non-licensed entities from issuing or marketing payment stablecoins, and imposes civil and criminal penalties for violations.
The legislation sets clear eligibility criteria for who can issue stablecoins. Qualified issuers include certain nonbank entities approved by the Office of the Comptroller of the Currency (OCC), uninsured national banks with OCC approval, and insured depository institutions. These issuers must maintain full reserves consisting of cash, Treasury securities with maturities under 93 days, or other highly liquid assets. They must also make monthly disclosures on reserve composition and submit to third-party audits.
The GENIUS Act also contains strong consumer protection measures. It prohibits stablecoin issuers from paying interest or yield to holders, bans deceptive naming that could imply government backing, and restricts the use of consumer data for advertising or profiling without consent. Public companies not primarily engaged in financial activities are barred from issuing stablecoins unless granted unanimous approval by a newly created Stablecoin Certification Review Committee.
The legislation provides a pathway for state-level regulation, allowing smaller stablecoin issuers with less than $10 billion in outstanding issuance to opt for state supervision—provided their states meet federal equivalency standards. Larger issuers would be required to transition to federal oversight unless they receive a waiver.
The bill includes provisions that subject stablecoin issuers to anti-money laundering and sanctions compliance obligations under the Bank Secrecy Act. Issuers must also maintain technological capabilities to comply with lawful orders to block or freeze assets.
Supporters of the bill say the GENIUS Act will bring long-overdue stability and accountability to a sector that has grown rapidly with little oversight. By clearly defining permissible issuers, reserve requirements, and regulatory responsibilities, the bill seeks to reduce systemic risks while fostering innovation in the digital asset space.
Passage of the GENIUS Act comes shortly after the House approved the CLARITY Act, which clarified the respective roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission in regulating digital commodities and securities. Together, the bills form a dual legislative push to provide much-needed clarity for the crypto and blockchain industries.
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