The GENIUS Act: Why Industry Players Need to Pay Attention to Stablecoin

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Mark Dixon

Senior Consultant

Nacha Consulting

On July 18, 2025, President Donald Trump signed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) into law-the first federal framework for payment stablecoins in the United States. This law marks a turning point for stablecoins as a legitimized part of the financial services landscape and creates a significant opportunity for those ready to lead in this new payment space.

This new law requires stablecoin issuers to be licensed as "permitted issuers" under federal or state oversight, thereby ending years of regulatory uncertainty that had previously deterred many participants from engaging in this space. Stablecoins must be backed 1-to-1 with dollars or high-quality liquid assets, such as U.S. Treasury securities, with monthly disclosures to verify their reserves. Issuers are also subject to Bank Secrecy Act compliance, which requires them to adhere to AML, sanctions, and customer identification standards. Notably, holders gain priority in insolvency, boosting consumer trust.

Why does the GENIUS Act matter for banks and credit unions?

• Financial institutions are now able to explore stablecoin services knowing what their compliance expectations are.
  
• Reserve and redemption requirements necessitate careful treasury management.
  
• Early movers may be able to offer lower-cost, faster settlement options for retail and corporate clients.
  
• The law may increase Treasury demand, creating both opportunities and risks in liquidity planning.

The GENIUS Act sets up the regulatory framework for stablecoins into a mainstream, regulated payment tool. Financial institutions that act now may gain a competitive edge as new use cases continue to emerge.

I lead the Nacha Payment Innovation Alliance - Navigating Through Digital Currencies project team. This group has spent two years tackling the cryptocurrency landscape. Last fall, the group released its "Diving into the Fundamentals of Cryptocurrency as a Form of Digital Payment" white paper, which begins to explore stablecoins. The group is currently working on releasing a new piece that focuses solely on stablecoins.

Nacha Consulting has collaborated with financial institutions and other payment participants to navigate the complexities of cryptocurrency, including its usage of ACH as an on- and off-ramp for funding and disbursement of stablecoin wallets, establishing appropriate risk management practices, and aligning company decisions with the best industry practices.

Reach out to learn more about how we can help your organization navigate the new world of Stablecoin.

Click here for a free 15-minute consultation.