GENIUS Act of 2025

Reserve Requirements: Issuers are required to maintain reserves on an at least 1 to 1 basis using specific assets like United States coins, currency, or Treasury bills (Section 4(a)(1)(A)). This ensures that digital assets are backed by actual value.

Redemption Procedures: The bill requires issuers to establish procedures for the timely redemption of outstanding stablecoins and to publicly disclose their redemption policies (Section 4(a)(1)(B) and (C)).

Transparency: Issuers must publish monthly reports on their website detailing the total number of outstanding stablecoins and the specific composition of their reserves (Section 4(a)(1)(D)).

Asset Segregation and Protection: For those providing custodial services, the bill requires that customer property be treated as belonging to the customer and kept separate from the issuer's own funds (Section 8(b)).

Bankruptcy Priority: In the event of insolvency, the claim of a person holding payment stablecoins is granted priority over other claims (Section 9(a)). This provides a safety net for holders during bankruptcy proceedings (Section s 9(b)).

Criminal Penalties for Falsehoods: Chief Executive Officers and Chief Financial Officers face criminal penalties if they submit certifications regarding the accuracy of monthly reports while knowing they are false (Section 4(a)(3)(C)).

Regulatory Burdens and Costs: Issuers must pay for monthly examinations by registered public accounting firms to verify their reports (Section 4(a)(3)(A)).

Civil Money Penalties: Entities that violate the Act or its regulations can face significant daily fines, including up to $100,000 per day for certain violations (Section 6(b)(5)).

Strict Limitations on Activity: Permitted issuers are restricted to specific activities, such as issuing, redeeming, and managing reserves, which limits their ability to engage in other financial activities unless explicitly allowed by a regulator (Section 4(a)(6)).