GENIUS Act heads to Trump’s desk: Here’s what will change

Key Points

1. The GENIUS Act creates incentives for stablecoin issuers to seek banking charters, limiting their activities outside the scope of the new license.

2. The bill introduces uncertainty for decentralized finance (DeFi) platforms regarding how to handle stablecoins, with some gaps expected to be addressed by future legislation like the CLARITY Act.

3. Stablecoin issuers must back their tokens 1:1 with reserves like US dollars or Treasury bills and undergo audits by registered accounting firms.

4. Non-approved stablecoin issuers will be barred from operating in the US, while foreign issuers may serve the US market under certain conditions.

5. Multiple agencies, including the Treasury and Federal Reserve, will regulate stablecoins, with the law taking effect 18 months after Trump's signature or 120 days after final regulations are issued.