GENIUS Act: How the new US bill could change the future of stablecoins in the US is changing the global rules of the game?

Author: Zilver Law Firm
Date of publication: September 11, 2025 Category: Financial law | Cryptocurrency & stablecoins | Regulation of crypto assets | Innovations in law

Zilver Fintech & Digital Asset Legal Insights

What is the GENIUS Act?

In July 2025, the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins Act) was passed in the United States. This is the first US federal law to create a comprehensive legal framework for so-called payment stablecoins are digital assets backed by a fixed value and intended for payments and settlements.

For the digital asset industry, financial institutions and consumers, this law could be a starting point in moving from a legal vacuum to a robust and reliable regulatory system.

What is Stablecoin?

Stablecoin is a type of cryptocurrency that has a constant value and is backed by certain assets. The GENIUS Act, among other things, establishes requirements for asset backing, which is intended to increase and ensure the security of using stablecoins along with traditional (fiat) currencies.

The main goals of the GENIUS Act are:

Bring the emission and circulation of stablecoins out of the “gray zone” and under strict government supervision.
Protect consumers from the risks associated with under-collateralization of stablecoins and cryptocurrencies in general.
Ensure financial stability by setting strict requirements for stablecoin issuers.
To stimulate innovation in the digital currency space without restricting the growth of technology.
Establish clear powers for regulators, including the U.S. Treasury Department and federal banks.

Additional purposes (not related to jurisprudence) include:

Allowing additional players (issuers) not directly connected to the Federal Reserve (central banks) to enter the financial market.
Providing additional collateral for US national currency, US securities and shares of certain companies.
Creation of measures of influence on foreign emission centers of cryptocurrencies.

Key provisions of the GENIUS Act:

The emission of stablecoins is permitted only:
1. Provided that stablecoins are backed 1:1 by real low-risk assets (US national currency, bank deposits, securities (bonds, T-bills, etc.), shares of certain investment companies.
2. Companies that have received the appropriate license from federal or state authorities (subject to compliance with requirements).
A system of permits and controls is being established in the area of emission and circulation of stablecoins.
A system of auditing issuers and their reserves is being established.
Banning algorithmic stablecoins: for example, UST Terra (Luna), which led to the collapse of the ecosystem in 2022. The ban includes stablecoins that are not backed by full-fledged assets.
Responsibility for violation of the emission and circulation of stablecoins is established.
Foreign issuers may operate in the United States only if they comply with the requirements of the GENIUS Act.
Anti-money laundering (AML) measures and cybersecurity and identification requirements are established.
In the event of bankruptcy of the issuer of stablecoins, holders receive priority over other creditors.

The importance of the GENIUS Act in practice from a lawyer’s perspective

The GENIUS Act opens up the possibility for private companies to issue stablecoins legally, within the legal framework. However, due to the requirements for issuers, only very large companies will be able to engage in this activity.
Foreign issuers must comply with the GENIUS Act if their stablecoins are going to be marketed in the US (which is pretty easy in a free internet environment if you don’t impose restrictions), or face fines of up to $1,000,000.
People and businesses receive a legal and less risky financial instrument for settlements as an alternative to classic national currencies.
The foundation has been laid for the creation of “stablecoin unions of states” within which stablecoins issued in other states will be recognized without the need for licensing (accreditation) in the United States.
For investors and funds: Investments in stablecoin projects now require expert assessment of their compliance with the GENIUS Act. Non-compliance means serious legal and reputational risks.
For developers and IT companies: Ukrainian teams developing products for American clients in the DeFi or CeFi sphere will have to include the requirements of the new regulator in the architecture of their solutions from the very beginning.

Position of the law firm “Zilver”

The Zilver team believes that the GENIUS Act represents a significant step towards the mature regulation of digital currencies. We support the balance between innovation and protection that the Act establishes.

At the same time, it is important for crypto market participants to understand that the GENIUS Act can significantly affect existing players and market rules, creating conditions for the emergence of new crypto market whales and reducing the role of unsecured crypto assets.

As a result, cryptocurrency issuers, crypto banks and crypto exchangers, regardless of their place of registration and activity, must conduct a legal audit of their activities for compliance with the requirements of the GENIUS Act.

The Zilver Law Firm continues to monitor the development of legislation in the field of digital assets and is ready to support clients at all stages – from risk analysis to full compliance with new regulations.

GENIUS: Stablecoins Regulated in the US