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Author: Paul Tierno, U.S. Congressional Research Office; translated by AIMan@Bitchain Vision
After the setback on May 8, the U.S. Senate voted to pass the cloture motion of Act S.1582 (the 2025 US Stablecoins Act 2025″ (Note: The cloture procedure is the procedure to end the debate and deliver the voting).The GENIUS Act aims to establish a system that regulates stablecoins.
Requirements for issuing payment stablecoins
Act S.1582 defines a “payment stablecoin” as a digital asset used for payment or settlement that can be redeemed at a predetermined fixed amount (such as $1).The issuer is required to hold at least USD 1 compliant reserves for every USD 1 stablecoin issued.The bill stipulates thatCompliance reserves are limited to coins and currencies, insurance deposits in banks and credit unions, short-term Treasury bonds, repos and reverse repos, government money market funds, central bank reserves, and other similar government-issued assets approved by regulators.The issuer may only use reserve assets for specific activities, including redemption of stablecoins, as collateral for repurchase and reverse repurchase agreements, etc.The bill requires federal and state regulators to establish specialized capital, liquidity and risk management rules for federal and state stablecoin issuers, but stablecoin issuers do not need to comply with regulatory capital standards applicable to traditional banks.
The issuer must formulate and disclose stablecoin redemption procedures, and regularly publish reports on the number and reserves of stablecoins in circulation. The reports must be certified by senior executives and “reviewed” by registered public accounting firms.Issuers with stablecoins in circulation that exceed US$50 billion are required to submit audited annual financial statements.
Issuers must abide by the Bank Secrecy Act, and the Financial Crime Law Enforcement Network (FinCEN) must formulate special anti-money laundering rules.The S.1582 Act requires FinCEN to promote “new ways to detect illegal activities involving digital assets.”The issuer must authenticate that the anti-money laundering and sanctions compliance program has been implemented.The bill prohibits individuals who have been convicted of a specific financial crime from serving as executives or directors of the issuer.
Stable coins can be issued by banks and credit unions (through subsidiaries) or non-bank institutions (not limited to financial enterprises), all types of issuing entities must register with the corresponding federal regulatory authority (the regulatory authority shall be one of the federal banking regulatory authorities according to the type of entity).Regulators willAssess whether the issuer meets the baseline requirements (as described above).If the application is not processed within 120 days, it will be deemed to be automatically approved.The regulator must state the reasons for refusal and allow the applicant to appeal.
For non-bank issuers whose stablecoins are less than $10 billion in circulation, the bill allows them to choose a state regulatory system, but it must be determined by the Secretary of the Treasury, the Federal Reserve Chairman and the Chairman of the Federal Deposit Insurance Company that the state regulatory system is “substantively similar” to the federal system.
Federal supervision and law enforcement system:
A bank or non-bank issuer whose federal regulatory system or stablecoins in circulation will be supervised by the regulatory authority of its bank or credit union (the non-bank issuer is supervised by the OCC of the Currency Supervision Office). The regulator will assess the financial status of the issuer, the risks to the security and stability of the institutions and the financial system, and the risk management system.
All stablecoin issuers under the federal regulatory system are required to submit reports to their major federal regulators and may be inspected by regulators.
If the regulator determines that the issuer violates any written conditions set by the regulatory authority, it has the right to prevent the issuer from continuing to issue stablecoins or taking other enforcement actions.
State regulatory system
Non-bank issuers with less than $10 billion in circulation can choose state regulatory systems.If its size exceeds this threshold, it must be converted into a federal regulatory system jointly managed by federal and state regulators unless exempted from federal regulators.
Supervision and law enforcement
State regulators have “oversight, inspection and enforcement powers” over all state issuers, but the bill allows state regulators to transfer these powers to the Federal Reserve.The bill also allows the Federal Reserve or OCC to take enforcement actions against state issuers under “abnormal emergency.”
Foreign issuer
The bill stipulates that“Issuance and Sales” of stablecoins to the United States must be limited to compliant U.S. issuers within three years after the bill comes into effect.The Treasury Department may enter into a “reciprocal” agreement with jurisdictions deemed to be “comparable” to regulate the United States after consultation with the federal stablecoin regulator.Stable coins from qualified jurisdictions with the ability to freeze transactions and comply with legal directives, registered by the OCC and subject to ongoing supervision, and hold sufficient reserves in the U.S. financial institutions to meet redemption needs in the U.S., can be traded in the U.S., interoperated with U.S. dollar stablecoins and used for international transactions.The bill authorizes the Finance Minister and other agencies to exempt foreign issuers and digital asset providers that sell stablecoins from multiple requirements.
Other Terms
The bill sets rules for stablecoin assets and reserve custodians. The custodians can be issuers or non-issuers, but are subject to federal or state banking regulators, the U.S. Securities and Exchange Commission, or the Commodity Futures Trading Commission.The bill prohibits the custodian from confusing his own funds with customer funds (except for special circumstances).The bill allows banks to custody stablecoins and reserves, use blockchain technology, and issue tokenized deposits.
This bill gives stablecoin holders the right to priority payment for all other claims when the issuer goes bankrupt, and amended the bankruptcy law.
This bill explicitly states that payment of stablecoins does not belong to securities or commodities and does not enjoy federal insurance.
A clause in S.1582 states that current ethical laws and regulations prohibit senior administrative officials from issuing stablecoins.
