GENIUS Act Implementation Begins, Shaping the Future of Stablecoins
- The GENIUS Act became law on July 18, establishing a framework for stablecoin regulation.
- Federal agencies have one year to issue regulations, with the framework taking effect by January 18, 2027.
- Issuers under $10 billion can use state regimes, while larger issuers must comply with federal oversight.
- The act mandates that reserves for payment stablecoins be held in cash or T-bills, prohibiting rehypothecation.
- A three-year grace period ends on July 18, 2028, after which only permitted issuers can offer stablecoins to U.S. customers.
The GENIUS Act’s implementation will dictate how $250 billion in existing stablecoins are structured and regulated in the U.S., potentially leading to a significant shift towards bank-like products and affecting the broader DeFi landscape.
As compliance becomes mandatory by mid-2028, capital flow will likely favor compliant entities over non-compliant ones, reshaping the stablecoin market significantly. (Source)
