---
title: "The GENIUS Act explained for businesses that use stablecoins"
seoTitle: "GENIUS Act explained: what it means for businesses"
description: "What the GENIUS Act means if your business sends, receives, or holds stablecoins: who it regulates, the dates that matter, and what to do before 2027."
date: "2026-09-25"
updated: "2026-09-25"
category: "compliance"
author: "BlindPay Team"
faq:
  - q: "What is the GENIUS Act in simple terms?"
    a: "The GENIUS Act is the US federal law for payment stablecoins, signed on July 18, 2025. It decides who may issue a dollar stablecoin, requires 1:1 reserves in cash and short-term Treasuries with monthly disclosure, bans issuers from paying interest, and, from July 18, 2028, limits the stablecoins that platforms can offer to people in the US."
  - q: "When does the GENIUS Act take effect?"
    a: "On January 18, 2027. The law takes effect on the earlier of 18 months after signing or 120 days after regulators issue final rules. No final rule was issued before September 20, 2026, the cut-off that could have moved the date earlier, so January 18, 2027 is the date."
  - q: "Do businesses need a license to use stablecoins under the GENIUS Act?"
    a: "Not to use them. The Act licenses issuers and sets rules for the platforms that offer stablecoins, not for businesses that send, receive, or hold them through a provider. Other laws still apply: a business that moves money for other people may need money transmitter licenses, and every business keeps its sanctions obligations."
  - q: "Is USDC compliant with the GENIUS Act?"
    a: "There is no final answer yet, because the licensing rules are still proposals and no issuer has been approved under them. What a business can check today is how each issuer backs and reports its reserves, and which licensing path it has said it will take. Ask your providers which stablecoins they expect to keep offering after July 18, 2028."
  - q: "Can stablecoin issuers pay interest under the GENIUS Act?"
    a: "No. Permitted issuers may not pay holders any interest or yield for simply holding, using, or keeping a payment stablecoin. Whether affiliates and platforms can offer rewards on stablecoin balances is still debated, and it was one of the disputes that stalled the CLARITY Act in the Senate."
  - q: "Did the CLARITY Act pass?"
    a: "No. The House passed the CLARITY Act in July 2025, but on September 15, 2026 the Senate vote to begin debate failed 49 to 50, short of the 60 votes needed. As of late September 2026 it is not law, and the GENIUS Act remains the federal framework for 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?

| Party | Examples | What the Act requires |
| --- | --- | --- |
| Permitted payment stablecoin issuer | A bank subsidiary, a federally approved nonbank issuer, or a state-approved issuer with up to $10 billion outstanding | Licensing, 1:1 reserves, monthly disclosure, AML and sanctions programs, no interest to holders |
| Foreign issuer | A stablecoin issuer based outside the US | Can be offered in the US only if its home regime is found comparable and it meets US conditions |
| Digital asset service provider | Exchanges, custodians, brokers, and other platforms that offer stablecoins as a business | From July 18, 2028, may only offer or sell stablecoins from permitted issuers to people in the US |
| Business user | A company that pays suppliers, collects payments, or holds a treasury balance in stablecoins through a provider | No license under the Act. Other laws, like money transmission and sanctions, still apply |
| Holder | Anyone holding a payment stablecoin | Priority claim on the issuer's reserves if it fails. No deposit insurance |

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](https://fasterpaymentscouncil.org/userfiles/2080/files/CBPWG_DAWG_Stablecoins%20as%20a%20Cross-Border%20Payment%20Method2_07-22-2026%20Final.pdf), 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?

| Date | What happened or happens |
| --- | --- |
| July 18, 2025 | Signed into law |
| September 2025 | Treasury asks for public comment on how to implement the Act |
| December 19, 2025 | FDIC proposes how bank subsidiaries apply to issue stablecoins |
| February 25, 2026 | OCC proposes its main rule for issuers it supervises |
| April 2026 | FDIC proposes prudential standards; FinCEN and OFAC propose AML and sanctions rules for issuers; Treasury proposes principles for state regimes |
| July 18, 2026 | Statutory deadline for final rules. Missed |
| August 18, 2026 | Treasury proposes rules on issuing, offering, and selling stablecoins in the US, with comments due October 19 |
| September 24, 2026 | Federal Reserve proposes reserve, capital, and application rules for the issuers it supervises |
| January 18, 2027 | Core provisions take effect |
| July 18, 2028 | Platforms may only offer payment stablecoins from permitted issuers to people in the US |

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](https://www.congress.gov/bill/119th-congress/senate-bill/1582/text), the [OCC proposal](https://www.occ.gov/news-issuances/news-releases/2026/nr-occ-2026-9.html), [Treasury's August proposal](https://www.federalregister.gov/documents/2026/08/18/2026-16796/genius-act-regulations-on-payment-stablecoin-issuance-offer-and-sale), and the [Federal Reserve's September proposals](https://www.federalreserve.gov/newsevents/pressreleases/bcreg20260924a.htm).

## 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](/resources/more/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](/resources/more/stablecoin-payments-provider-due-diligence) 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](/resources/more/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](/resources/more/mica-stablecoin-rules-explained), Brazil's [PSAV regime](/resources/more/psav-brazil-explained), and the [travel rule](/resources/more/travel-rule-stablecoin-off-ramps) 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?

| | GENIUS Act | CLARITY Act (H.R. 3633) |
| --- | --- | --- |
| Covers | Payment stablecoins and their issuers | Market structure for digital assets, including how the SEC and CFTC split oversight |
| Status as of September 25, 2026 | Law since July 18, 2025, with rules being written | Passed the House in July 2025. On September 15, 2026 the Senate vote to begin debate failed 49 to 50 |
| What it means for payment businesses | Decides which stablecoins can circulate in the US | Would have set rules for trading platforms and token classification |

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](/resources/more/stablecoin-regulation-tracker-2026) 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](/licenses).

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](/docs/kb/kyc).

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](/resources/more/stablecoin-payments-guide).

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