GENIUS ACT

Guiding and Establishing National Innovation for U.S. Stablecoins Act (S.1582)
EFFECTIVE: 18 MO / 120 DAYS POST-REGS
Senate Passed 68-30 • House Pending • White House Support
Critical Implementation Timeline
30-90 DAYS
• Treasury AML consultation
• States with pre-existing regimes qualify
• Safe harbor window
180 DAYS
• State certification fast-track
• Agency rulemaking plans
• Treasury counter-terrorism report
1 YEAR
• Final regulations issued
• Annual reporting starts
• Foreign regime rules
18 MONTHS
• Full enforcement begins
• All provisions active
• No grace period
2 YEARS
• International reciprocity final
• Market fully regulated
• Enforcement precedents
3 YEARS
• Service provider ban effective
• FinCEN AML guidance
• Insolvency study due
Core Regulatory Framework
THREE ISSUER PATHS (§3)
1) IDI subsidiaries (Fed/OCC/FDIC regulated) 2) Federal nonbank (OCC license, $10M capital) 3) State-qualified (certified regime, <$10B)
$10B TRANSITION TRIGGER (§4(d))
360 days to go federal or stop growing. Waiver available under certain criteria. OCC becomes primary regulator.
100% RESERVE BACKING (§4(a))
USD in segregated FDIC accounts, Treasury bills <90 days, overnight Federal Reserve repos only. Zero rehypothecation. Monthly public attestations required.
PUBLIC COMPANY BAN (§4(a)(11))
Non-financial public companies prohibited unless unanimous Committee approval (Federal Reserve, Treasury, OCC, FDIC, NCUA). "Predominantly financial" undefined.
OPERATIONAL LIMITS (§3(b))
Zero yield to holders. 24hr redemption at par. Bankruptcy super-priority. No lending, trading, or non-stablecoin activities allowed.
Affected Entities & Requirements
🏦
BANKS & CREDIT UNIONS
Issue via subsidiaries; separate capital requirements; QTL exemption for reserves; existing bank regulations + GENIUS overlay; can act as agents/principals
💰
NONBANK FINANCIALS
OCC federal license (120-day decision) or state; $10 million minimum capital; CCO & audit committee required; comprehensive risk framework; limited to stablecoin only
💻
BIG TECH / PUBLIC COMPANIES
Effectively banned without unanimous approval; must prove no risk to financial stability; existing initiatives need restructuring; private subsidiaries may qualify
🌍
FOREIGN ISSUERS
Treasury registration showing "comparable" regime; U.S. office & agent required; subject to freeze/block; reciprocity agreements pending
🔄
EXCHANGES & WALLETS
3-year transition then ban on unregistered coins; must verify issuer status; criminal penalties possible; includes all "digital asset service providers"
Critical Numbers
State→Federal Trigger $10 billion
Minimum Federal Capital $10 million
Decision Timeline 120 days
Transition Period 360 days
Redemption Time 24 hours
Reserve Maturity <90 days
SAR Filing 30 days
CTR Threshold >$10K
Comprehensive Compliance Requirements
AML/BSA PROGRAM
  • Full financial institution status under BSA
  • Suspicious activity report filing within 30 days of detection
  • Currency transaction reports for transactions >$10,000
  • Customer identification program with enhanced due diligence
  • Independent testing & annual training
  • Designated BSA compliance officer
  • OFAC real-time sanctions screening
  • 5-year record retention requirement
TECHNICAL INFRASTRUCTURE
  • Real-time freeze/block/burn capability
  • Application programming interface for law enforcement orders
  • Transaction pattern monitoring
  • Multi-sig architecture for controls
  • 24/7 redemption processing system
  • Automated sanctions list checking
  • Blockchain analytics integration
  • Incident response procedures
REPORTING & DISCLOSURE
  • Monthly CEO/CFO attestations
  • Quarterly financials (annual audit)
  • Daily reserve composition updates
  • Material incident reporting
  • Public website posting <5 days
  • Fee schedule transparency
  • Bilingual consumer materials
  • 15-day complaint response
💰 COST ESTIMATES
$5-15M
Initial implementation
• AML system: $1-3M
• Tech infrastructure: $2-5M
• Annual ongoing: $3-10M
👥 STAFFING NEEDS
10-25 FTEs
• CCO + compliance team (5-10)
• Tech/security (3-5)
• Operations/finance (2-10)
⏱️ MARKET IMPACT
18-month land grab
• State bottlenecks likely
• M&A surge near $10B
• Foreign partnership boom
⚠️ KEY RISKS
• OCC resource constraints
• State cert delays (12-18mo)
Public co litigation
• Enforcement uncertainty
FINANCIAL SERVICES MARKET IMPACT ANALYSIS
Strategic positioning and competitive dynamics across the financial services ecosystem
📈 POSITIONED TO BENEFIT
Circle, Paxos, Gemini
New York Licensed Stablecoin Issuers
Strong brand recognition positions them well once New York receives state certification from Stablecoin Certification Review Committee. Expedited certification likely for states with pre-existing regimes. Well-positioned to partner with big technology companies, retailers, and financial services firms seeking stablecoin market entry.
JPMorgan Chase, Bank of America, Wells Fargo, Citigroup
Money Center Banks
Significant first-mover advantage through existing regulatory infrastructure. Ability to leverage subsidiary structure for rapid market entry. Access to large-scale payment processing revenue streams.
BlackRock, Vanguard, State Street Global Advisors
Treasury Bill and Reserve Management Firms
Massive opportunity to manage stablecoin reserves invested in Treasury securities. Expertise in short-duration government securities creates competitive advantage. Potential for billions in assets under management from reserve requirements.
Bank of New York Mellon, State Street, Northern Trust
Custody Banks
Mandatory requirement for qualified custodians creates guaranteed demand. Opportunity to capture custody fees on substantial reserve assets. Strategic positioning as infrastructure backbone.
Anchorage Digital, BitGo, Fireblocks
Digital Asset Custodians and Custody Software
Specialized infrastructure for digital asset custody becomes essential. Technical requirements for freeze and block capabilities favor sophisticated providers. Recurring revenue from custody and infrastructure services.
American Express, Capital One
Bank-Integrated Card Networks
Direct banking relationships enable seamless stablecoin integration. Closed-loop networks provide enhanced control over payment flows. Better positioned than standalone networks for compliance requirements.
Meta, Google, Amazon
Big Technology Companies
Partnership opportunities with licensed issuers bypass direct issuance restrictions. Enhanced data collection through stablecoin payment flows. Development of alternative consumer engagement models without regulatory burden.
📉 FACING HEADWINDS
Fidelity National Information Services, Fiserv, Jack Henry
Legacy Banking Infrastructure
Traditional core banking systems face disruption from blockchain-native solutions. New technical requirements may favor modern infrastructure providers. Risk of disintermediation as banks build direct capabilities.
Visa, Mastercard
Standalone Payment Networks
Stablecoins enable direct bank-to-bank transfers bypassing traditional rails. Reduced transaction fees pressure existing business models. Must adapt to blockchain-based payment infrastructure.
Tether, Binance USD, International Issuers
Foreign Stablecoin Issuers
Must wait for reciprocal regime recognition from Treasury Department. Cannot operate in United States without full registration and compliance. Subject to United States regulatory enforcement regardless of domicile.
Regional Banks, Community Banks
Smaller Financial Institutions
Lack resources to build competitive stablecoin infrastructure. Risk deposit outflows to stablecoin wallets. Cannot match money center banks' scale advantages. May become acquisition targets.
Western Union, MoneyGram, Remitly
Traditional Money Transfer Operators
Stablecoins enable instant, low-cost cross-border transfers. Core remittance business faces direct disruption. Twenty-four hour redemption requirement surpasses traditional settlement times. Regulatory moat eroded by new entrants.
Offshore Crypto Banks
Non-U.S. Digital Asset Banks
United States registration requirements eliminate regulatory arbitrage opportunities. Cannot serve United States customers without full compliance. Business model of serving crypto firms faces disruption from traditional banks entering space.
DAI, Frax, Other Algorithmic Stablecoins
Non-Treasury Backed Stablecoins
Explicitly excluded from regulatory framework as non-payment stablecoins. Cannot compete in regulated United States market. Must maintain offshore operations or restructure entirely.
💡 KEY STRATEGIC THEMES
RELX, NICE, FICO
Regulatory Technology Renaissance
Explosive growth in demand for compliance infrastructure providers. Every issuer requires sophisticated anti-money laundering and transaction monitoring systems. Positioned to capture significant market share from mandatory requirements.
State-Licensed Issuers
Consolidation Wave Approaching
Ten billion dollar threshold creates natural consolidation pressure. State-licensed issuers become attractive acquisition targets. Market structure likely to concentrate around major financial institutions.
Chainalysis, Elliptic, TRM Labs
Infrastructure Investment Cycle
Blockchain analytics companies see dramatic valuation increases. Gain strategic importance from mandatory monitoring requirements. Create sustainable recurring revenue streams from compliance needs.
JPMorgan, Bank of America, Wells Fargo
Traditional Finance Advantage
Regulatory framework favors established financial institutions over crypto-native firms. Existing compliance infrastructure provides competitive moat. Partnership models emerge between traditional and digital finance players.