The GENIUS Act explained for businesses that use stablecoins

The GENIUS Act is the US federal law for payment stablecoins, signed on July 18, 2025. It regulates the companies that issue dollar stablecoins and, from July 18, 2028, the platforms that offer them to people in the US. A business that simply sends, receives, or holds stablecoins through a provider doesn't need a GENIUS license. Its core rules take effect on January 18, 2027.

So the law mostly lands on your suppliers: the issuer behind each stablecoin you use, and every exchange, custodian, or payout provider that handles it for you. What changes for you is which stablecoins will be available, and what to ask the companies in your chain.

This article summarizes the law and the proposed rules as of September 25, 2026. It is general information, not legal advice. Confirm your own obligations with counsel.

Who does the GENIUS Act apply to?

The Act also clarifies that a payment stablecoin issued by a permitted issuer is not a security or a commodity under federal law. That settles a question that kept many regulated companies away from stablecoins before 2025.

What are the reserve, disclosure, and yield rules?

Reserves. Every payment stablecoin must be backed at least 1:1 by permitted assets, such as US coins and currency, demand deposits at insured banks, Treasuries with 93 days or less to maturity, overnight repurchase agreements backed by Treasuries, and government money market funds invested in those assets. Commercial paper and algorithmic backing don't qualify.

Disclosure. Issuers must publish the composition of their reserves every month, with the report examined by a registered public accounting firm. Issuers with more than $50 billion outstanding must also publish audited annual financial statements.

Yield. A permitted issuer may not pay holders any interest or yield for holding, using, or keeping the stablecoin. According to the U.S. Faster Payments Council's July 2026 report, the OCC's proposed rules go further and presume that affiliate or white-label reward arrangements violate the ban unless the issuer shows otherwise.

Marketing. Issuers can't present a payment stablecoin as legal tender, as guaranteed by the US government, or as federally insured. It isn't any of those. If an issuer fails, holders get priority over other creditors on the reserves, which is the protection the Act offers instead of insurance.

Compliance. Issuers are financial institutions under the Bank Secrecy Act. They need AML and sanctions programs, and the technical ability to freeze or block tokens when a lawful order requires it.

What is the GENIUS Act timeline?

The effective date is settled by arithmetic. The law takes effect on the earlier of 18 months after signing or 120 days after final regulations. Only a final rule issued before September 20, 2026 could have pulled the date forward, and none came. The OCC has said it aims to finalize its rule by November.

The primary documents: the law's text on congress.gov, the OCC proposal, Treasury's August proposal, and the Federal Reserve's September proposals.

What should businesses using stablecoins do now?

Most of the work is asking the right questions of your suppliers.

1. List every stablecoin you touch, and who issues it. For each one, find out which licensing path the issuer has said it will take: bank subsidiary, federal nonbank, state regime, or foreign issuer.
2. Ask each provider what happens after July 18, 2028. Exchanges, custodians, and payout providers will have to drop stablecoins that aren't from permitted issuers. Ask which ones they expect to keep.
3. Read the reserve reports. Check what backs each stablecoin you hold and how often it's reported. USDC vs USDT for payments compares how the two largest issuers report.
4. Don't plan around issuer yield. If a provider offers rewards on stablecoin balances, have counsel review how the program is structured.
5. Write down who handles compliance. Split KYC, KYB, sanctions screening, and monitoring between your provider and your own team, in writing.
6. Keep an audit trail. Record who approved each payment, the counterparty, and the stablecoin and network used.
7. Know your exit. If a stablecoin you hold stops being offered, how fast can you convert it, and through whom?

30 due diligence questions for a stablecoin payments provider covers the provider side in more depth.

What doesn't the GENIUS Act change?

• AML and sanctions duties. Anyone moving money for others keeps Bank Secrecy Act obligations, and every US person must follow OFAC sanctions. The FPC report puts it plainly: compliance requirements are the same for stablecoins as for cash-based payments.
• Money transmission. A business that moves stablecoins or dollars on behalf of other people may still need FinCEN registration and state money transmitter licenses. Do merchants need a license to accept stablecoins covers where that line sits.
• Deposit insurance. A stablecoin is not a bank deposit and is not FDIC insured.
• Rules outside the US. The EU's MiCA, Brazil's PSAV regime, and the travel rule still apply to cross-border flows.
• Tax. The Act doesn't address how stablecoin transactions are taxed.

What is the difference between the GENIUS Act and the CLARITY Act?

The two are often mentioned together because the CLARITY Act touched stablecoins at the edges, most visibly on whether platforms can pay rewards on stablecoin balances. With it stalled, the GENIUS Act and its rules are the federal framework for now. The stablecoin regulation tracker compares it with the EU, Brazil, and Japan.

How does BlindPay fit?

BlindPay is not a stablecoin issuer. It converts USDC and USDT to and from local currency, and pays out over Pix, SPEI, ACH, and SWIFT (POBO/COBO), with compliance built into the payment flow. BlindPay is registered with FinCEN as a Money Services Business (NMLS #2745309) and publishes its US and non-US license status on its licenses page.

KYC, KYB, sanctions screening, and travel rule checks run inside the API before money moves, so a business using BlindPay doesn't build those controls from scratch. Payouts from an external wallet are non-custodial: the stablecoins stay in the customer's wallet until the quoted payout executes. The customer requirements are in the KYC reference.

Start with step 1 of the checklist this week: list every stablecoin you hold or accept, and the issuer behind each one. Then send your providers the July 18, 2028 question. For how stablecoin payments work end to end, see stablecoin payments explained.

For how the Act and Visa's USDC settlement affect card programs, see stablecoin cards in the United States.

If you collect payments in stablecoins, read what the GENIUS Act and MiCA mean for payin businesses.

If your company sends payouts in the US and the EU, read what the GENIUS Act and MiCA change for payout senders.

This article is for general information only and is not legal advice.