S919-119

What This Bill Does

The GENIUS Act makes payment stablecoin issuance lawful only for permitted issuers and builds a supervisory system around that permission. Issuers must maintain one-to-one reserves, make monthly public reserve disclosures, avoid misleading claims of federal backing, and face approval, examination, enforcement, and receivership rules. The bill divides oversight among primary federal payment stablecoin regulators, state payment stablecoin regulators, the Treasury Department, the Federal Reserve Board, the Comptroller of the Currency, and the FDIC; applies Bank Secrecy Act and sanctions compliance to digital asset service providers; gives stablecoin holders priority claims in insolvency; and clarifies that payment stablecoins are not securities, commodities, investment-company securities, or investment-adviser assets merely because they are payment stablecoins.

Who Benefits and How

Permitted payment stablecoin issuers benefit because the bill creates a legal route to issue payment stablecoins in the United States instead of leaving issuance exposed to ad hoc enforcement risk. Depository institution subsidiaries benefit because the approval process gives bank-affiliated issuers a defined federal path for stablecoin business lines. State qualified payment stablecoin issuers benefit because state regulators can keep supervisory authority when the state framework meets federal standards. Payment stablecoin holders benefit from one-to-one reserve requirements, custody restrictions, monthly disclosures, redemption expectations, and priority treatment in issuer insolvency. Custodial banks and trust companies benefit because the bill defines when reserve and collateral custody may be provided and how it should be segregated. Banking institutions benefit from savings language preserving their authority to take deposits, issue tokenized deposits, and use distributed ledger technology when otherwise lawful.

Who Bears the Burden and How

Unauthorized stablecoin issuers are barred from issuing payment stablecoins in the United States unless they become permitted issuers. Permitted payment stablecoin issuers must maintain reserves, publish monthly reports, meet redemption obligations, and avoid representing that stablecoins are government-backed. Primary Federal payment stablecoin regulators must review applications, supervise issuers, conduct examinations, issue enforcement orders, and write implementing rules. State payment stablecoin regulators must meet federal standards, share information, supervise state issuers, and lose state-qualified status if the framework is inadequate. Digital asset service providers must comply with anti-money-laundering, sanctions, suspicious-activity, and law-enforcement cooperation duties. Foreign payment stablecoin issuers face reciprocity and comparability conditions before their coins can be treated as permitted overseas stablecoins.

Key Provisions

• Prohibits payment stablecoin issuance by anyone other than a permitted payment stablecoin issuer.
• Requires one-to-one reserves, monthly reserve disclosures, redemption terms, and restrictions on claims of federal insurance or backing.
• Establishes approval, supervision, enforcement, receivership, and state-qualified issuer standards for federal and state regulators.
• Applies Bank Secrecy Act, sanctions, and illicit-finance obligations to stablecoin-related digital asset service providers.
• Provides custody, insolvency-priority, interoperability, study, report, overseas reciprocity, effective-date, and rulemaking provisions.
• Amends securities, commodities, investment-company, and investment-adviser statutes to clarify payment-stablecoin regulatory treatment.