GENIUS Act Signed: Stablecoins Now Face Strict Rules & Oversight

Key Points

1. The GENIUS Act defines three categories of entities allowed to issue stablecoins: subsidiaries of insured depository institutions, federally chartered nonbanks approved by regulators, or state-regulated entities.

2. The law prohibits commingling of customer funds and ensures bankruptcy protections for cash equivalents like Treasuries and overnight repos.

3. Annual audit requirements apply to issuers above the $50 billion threshold, but all issuers must comply with the new regulations.

4. The act requires stablecoin issuers to register, restructure, or cease operations if they previously operated in a regulatory gray zone.

5. The SEC and CFTC must clarify jurisdictional boundaries for stablecoin regulation, and regulatory agencies are tasked with enforcing the new framework.