Stablecoin issuers must meet rigorous regulatory standards under the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.
The long-awaited Act, signed into law in July 2025, brings stablecoins directly under financial supervision.
GENIUS mandates firms to hold strong reserves, abide by transparency requirements and operate under strict oversight to protect consumers and the wider financial system.
For overseas issuers, expansion into the US is only permitted if your home country’s rules match US standards. The Act narrowly opens the door to foreign stablecoin issuers if they register with the Office of the Comptroller of the Currency (OCC) and maintain US based reserves.
US President Trump hailed the law as “going to make America the undisputed leader in digital assets. Nobody will do it better, it is pure genius. Digital assets are the future, and our nation is going to own it.”
By refining rules for US issuers and setting a high bar for international players, the Act could lean the digital asset leadership toward Washington.
The UK which is still finalising its own regime has a greater challenge in hand, whether to match the speed and clarity of US, or risk watching capital, talent, and innovation flow elsewhere.
For firms trying to make sense of shifting rules in the US, UK, and other jurisdictions, FinregE helps to cut through the noise by turning regulatory uncertainty into clear steps that businesses can act on.
What does the GENIUS Act mean for firms
Stablecoins are typically used for making payments, Foreign exchange( FX,) and treasury management. Globally, the combined market size for stablecoins is between $230 and $270 billion.
With this scale of usage, there is pressure on regulators worldwide to regulate stablecoins.
- For the first time, issuers know exactly what reserve, disclosure, and authorisation requirements look like at the national level.
- Stablecoin issuers are subject to the Bank Secrecy Act, requiring client profiles, record keeping, and flagging suspicious transactions.
- Stablecoin issuers face tight marketing restrictions to protect consumers. They cannot imply that their tokens are government-backed, carry federal insurance, or count as legal tender.
- The law puts stablecoin reserves outside the bankruptcy estate, giving users first claim. That boosts confidence but also changes how issuers might navigate insolvency.
- Once it is finalised in late 2026, only “permitted payment stablecoin issuers” (PPSIs) will be able to operate. They may be smaller issuers under certified state regulators, non-bank organisations authorised by the OCC, or subsidiaries of insured banks.
- Stablecoin issuers that grow past $10bn in payments have one year to move into federal oversight, unless granted a waiver.
- Public companies that are not primarily engaged in finance cannot issue stablecoins unless they are approved by regulators.
This a strategic win for US in terms of policy, however, stablecoins only make up a small percentage of the crypto world.
What about foreign issuers?
Foreign stablecoin issuers must follow these rules to operate in the US:
- Treasury must determine that the home regime of the foreign issuer is comparable to US standards.
- The issuer must register with the OCC.
- Reserves must be held in a US financial institution to cover local liquidity.
- The issuer’s jurisdiction cannot be under US sanctions.
In comparison to the earlier STABLE Act proposal, the GENIUS Act is much tougher, imposing stricter reserve requirements, tighter limits on who can issue stablecoins, and far more demanding oversight of compliance and transparency.
Risks associated with GENIUS Act
- Heavy compliance costs could push smaller issuers out thus giving more power to big banks and tech firms.
- In the Act, there is no system to ensure the smooth exchange between different stablecoins, creating a fragmented stablecoin ecosystem.
- Restrictions on non-financial corporates and high compliance costs may limit the entry of new entrants, reducing the competitive edge of digital finance.
The GENIUS Act deserves recognition as a milestone, but its demanding compliance obligations risk reshang the stablecoin landscape, said Professor David Krause of Marquette University in a blog for the Oxford Business Law.
How is the UK reacting
The GENIUS Act has added momentum to the UK’s process in creating its own framework to regulate stablecoins.
The UK Treasury has published a draft legislation that would bring fiat-backed stablecoin issuance and custody under the Financial Services and Markets Act.
The FCA’s CP25/14 consultation sets out rules on safeguarding, redemption rights, reserves, and disclosures. The Bank of England is designing a draft framework for systemic stablecoin payment systems.
Currently, stablecoins fall under Anti Money Laundering (AML) and e-money rules that are far from similar to the GENIUS Act. Thus, it would be difficult for the US treasury to mark these rules comparable.
With the US (GENIUS Act) and EU (Markets in Crypto-Assets Regulation – MiCA) both moving in a decisive direction, the UK is lagging behind.
“The Treasury is driving growth and innovation, while the Bank of England and FCA focus on financial stability. For industry, this is the moment to show how risks can be mitigated to give regulators comfort,” said Elise Soucie Watts, Executive Director at Global Digital Finance.
The EU’s crypto landscape
Effective since June 2024, the Markets in Crypto-Assets Regulation (MiCA) defines stablecoin issuers as “asset-referenced tokens” and “e-money tokens.” as “asset-referenced tokens” and “e-money tokens.”
The rules are much complex than the UK’s draft proposals and requires robust authorisation, governance and reserve standards.
As Ripple’s UK & Europe MD Cassie Craddock put it: “What we see is that clear regulation equals a willingness for banks to offer digital assets to their customers. In the UK, we’ve made a start … but timing is critical if the country hopes to capitalise on its second or even third-mover advantage.”
What does the future hold for digital assets
The knock-on effects could be significant on financial markets globally:
- UK issuers could be restricted by US rules and may not be able to operate there. With GENIUS and MiCA in place, banks and Payment Service Providers (PSPs) can confidently integrate stablecoins into payments and treasury operations. UK firms are now at a risk of being left on the sidelines.
- Regulation is now a competitive advantage. Jurisdictions that move faster attract the liquidity, issuers, and infrastructure.
How FinregE helps firms stay ahead
With the GENIUS Act, MiCA and UK’s draft proposals for stablecoins, it’s necessary for stablecoin issuers to stay abreast of emerging regulatory requirements and map these to internal policies and controls.
FinregE’s Regulatory Horizon Scanning and Digital Rulebooks modules simplify the end-to-end regulatory compliance journey by:
- Scanning relevant consultations and rule updates as they’re published.
- Mapping requirements from the EU, US and UK regulators into clear, actionable obligations.
- Creating digital rulebooks that compliance and risk teams can operationalise across policies, controls and reporting.
- Comparing the US, UK and EU regulations for linkages for similarities and showing the rules that are not linked.
Forward-thinking firms will proactively align to changing regulatory standards and build compliance into their growth strategies.
Find out how FinregE can help. Book a demo today.
