Stablecoins and the GENIUS Act

Stablecoins track the value of a currency

Stablecoins are blockchain tokens designed to hold a fixed value against a currency, usually the US dollar. People use them for payments, trading and moving money between platforms. DefiLlama’s daily series put dollar-pegged tokens at $301.50bn on 28 October 2026, within $303.23bn across all currency pegs.

The GENIUS Act sets a US framework for payment stablecoin issuers, including reserve backing, redemption, reporting and supervision. The Act became law on 18 July 2025. Its commencement provision sets the effective date at the earlier of 18 months after enactment or 120 days after implementing final regulations by the primary federal payment stablecoin regulators. Treasury’s 30 September rule gives 18 January 2027 as the expected date. The state-certification procedure that took effect in September is a separate implementation step.

What the GENIUS Act requires

The GENIUS Act establishes a federal framework for these tokens, and its requirements read like conventional financial regulation rather than anything exotic. Once the regime takes effect, permitted issuers must hold reserves backing their tokens one for one, so every unit in circulation is matched by real assets. They must be transparent about those reserves and honour redemption rights, meaning a holder can reliably exchange a token for the dollar it represents. They must meet anti-money-laundering and counter-terrorist-financing obligations, and submit to audit and reporting. Oversight is shared across the Office of the Comptroller of the Currency, the Federal Reserve, the Financial Crimes Enforcement Network and the Treasury. Taken together, it aims to make a stablecoin something a cautious institution can use without taking a regulatory gamble.

Why the rules come now

The GENIUS Act became law on 18 July 2025; the reason its rulebook is being written now is that stablecoins have proved their usefulness under stress. When the speculative parts of the market contracted, stablecoin supply held up far better, though June 2026 brought a $7.7bn fall, the largest monthly drop since the Terra collapse of 2022, because the tokens function as dollars that move on blockchain rails: fast, around the clock, across borders. That utility is independent of whether bitcoin or ether is rising or falling, and it is why regulators have treated stablecoin rules as the most pressing part of the digital-asset agenda. The contrast with the rest of the market is what gives the legislation its urgency: rules tend to follow the products people actually use, and stablecoins have become the settlement layer for a growing share of on-chain payments. For a technology often associated with volatility, a dollar token that simply stays worth a dollar has turned out to be its most durable product.

Issuer yield and indirect payments

The GENIUS Act will prohibit permitted payment stablecoin issuers from paying holders interest or yield solely for holding, using or retaining their coins. The OCC’s final implementation rule, announced on 21 October and published on 23 October 2026, takes effect on 18 January 2027. It keeps the issuer prohibition and an anti-evasion rule. Payments through an agent or on the issuer’s behalf can still fall within the ban.

The final OCC text removes the automatic rebuttable presumption in its March draft. That change does not give issuers permission to arrange prohibited payments through another entity. The Federal Reserve’s separate proposal still has its own proposed treatment and remains open for comments until 30 November. Treasury’s earlier issuance proposal had a comment deadline of 19 October and addresses a different part of implementation.

What the Fed and other agencies have proposed

The Federal Reserve Board proposed two GENIUS Act rules on 24 September 2026 for the payment stablecoin issuers it supervises: full backing with short-term Treasury bills and other high-quality liquid assets, standardised capital and risk-management requirements, rules for firms that safekeep reserve assets, and an application process for Board-supervised banks that want to issue a stablecoin. Both proposals were published in the Federal Register on 29 September 2026, and comments are due by 30 November 2026. On 30 September Treasury issued an interim final rule, in force the same day, setting out how the Stablecoin Certification Review Committee will approve or deny state regulators’ certifications under section 4(c)(4) of the act; certifications are accepted only once Paperwork Reduction Act approval is in place, and comments on it also close on 30 November 2026. The OCC’s first notice on its application forms closed on 25 September, and a second information-collection notice was published on 23 October with comments due 23 November 2026. The application forms and their OMB review are separate from the OCC’s final prudential rule. Acceptance and processing of issuer applications will be announced separately.

What to watch

Implementation has several separate deadlines. Treasury’s proposed issuance rules had a published comment deadline of 19 October 2026. Comments on the Federal Reserve’s proposals and Treasury’s state-certification procedure close on 30 November. The issuer framework’s expected commencement is 18 January 2027. The OCC’s final rule now sets its requirements, while the Fed proposal and the remaining implementation processes keep their own timetables.