GENIUS Act

Prohibits anyone other than an approved 'permitted payment stablecoin issuer' from issuing payment stablecoins in the United States, backed by civil penalties and criminal fines up to $1,000,000 and up to 5 years in prison for knowing violations.

Requires permitted stablecoin issuers to back all outstanding stablecoins at least 1-to-1 with identified high-quality liquid reserves (such as U.S. currency, insured bank deposits, and short-term Treasury bills) and strictly restricts the rehypothecation or reuse of those reserve assets.

Classifies permitted stablecoin issuers as financial institutions under the Bank Secrecy Act, requiring them to run anti-money laundering and sanctions compliance programs and maintain the technical ability to freeze, seize, or burn stablecoins under lawful government orders.

Prohibits permitted and foreign stablecoin issuers from paying interest or yield to holders solely for holding or using a payment stablecoin.

Requires state-regulated stablecoin issuers that exceed $10 billion in issuance to transition into joint federal-state supervision or stop issuing new stablecoins, unless granted a federal waiver.

Establishes a 120-day federal application and review process for banks and nonbanks to obtain approval to issue stablecoins, deeming unaddressed complete applications approved and preempting state licensing for federally approved issuers.

Requires digital asset custodians and wallet providers for stablecoins to be regulated financial entities, segregate customer funds and keys from corporate assets, and give customer claims priority over general company creditors.

Amends federal bankruptcy law to keep required stablecoin reserves out of bankruptcy estates, give stablecoin holders first-priority claims to redeem reserves, and allow immediate court-approved ratable redemptions during issuer insolvencies.

Permits insured depository institutions and credit unions to custody stablecoins and use distributed ledgers, and prohibits the SEC and bank regulators from requiring them to treat custodied customer digital assets as balance-sheet liabilities or hold punitive capital against them.

Excludes permitted payment stablecoins from the legal definitions of a 'security' under federal securities laws and a 'commodity' under the Commodity Exchange Act.

Makes it unlawful for digital asset service providers, starting three years after enactment, to offer or sell payment stablecoins to U.S. persons unless the stablecoin is from an approved permitted issuer or a compliant foreign issuer.

Bars unapproved stablecoins from being counted as cash or cash equivalents for accounting, being used as margin or collateral in derivatives trading, or serving as settlement assets between banks.

Exempts direct peer-to-peer transfers, personal transfers between an individual's domestic and international accounts, and self-custodial software or hardware wallets from stablecoin issuance restrictions.

Mandates that issuers publish clear redemption policies and fees, disclose monthly reserve compositions online, and submit monthly third-party accounting examination reports certified by senior executives under criminal penalty.

Directs primary federal and state banking regulators to establish tailored capital, liquidity buffer, asset diversification, interest rate risk, and operational risk standards for stablecoin issuers.

Restricts permitted stablecoin issuers' business activities to issuing and redeeming stablecoins, managing and holding reserves, providing custody services, and directly related support activities.

Prohibits stablecoin issuers from conditioning services on a customer buying other products or agreeing not to use a competitor's services.

Bars stablecoin issuers from using U.S. government terminology in their name or marketing stablecoins as legal tender or government-backed (while allowing standard currency peg symbols like USD).

Requires privately held stablecoin issuers with more than $50 billion in outstanding tokens to publish annual financial statements audited by an independent public accounting firm under public company standards.

Prohibits commercial public companies and non-financial foreign companies from issuing payment stablecoins without unanimous approval from the Stablecoin Certification Review Committee and strict limits on commercial use or sharing of customer transaction data.

Designates the Office of the Comptroller of the Currency (OCC) as the exclusive regulator of federal qualified stablecoin issuers and prohibits false claims that stablecoins are covered by federal deposit or share insurance.

Allows state-qualified stablecoin issuers with $10 billion or less in total outstanding issuance to operate under certified, substantially similar state-level regulatory systems.

Bars individuals convicted of financial crimes, cybercrimes, or money laundering felonies from serving as officers or directors of a stablecoin issuer, under penalty of up to 5 years in prison and a $1,000,000 fine.

Authorizes federal stablecoin regulators to examine issuers, issue cease-and-desist orders, remove corporate officials, and assess daily civil money penalties of up to $100,000 (or $200,000 for knowing violations) for noncompliance.

Empowers state regulators to supervise state issuers while permitting emergency intervention by the Federal Reserve or OCC during unusual and exigent circumstances, and establishes home-state legal reciprocity for interstate operations.

Authorizes the Treasury Department to identify noncompliant foreign stablecoin issuers and order U.S. digital asset platforms to stop facilitating secondary trading in their tokens.

Directs FinCEN and the Treasury Department to study illicit finance detection methods and issue new rules on stablecoin transaction monitoring and risk standards for decentralized finance.

Authorizes federal stablecoin regulators to establish technical standards to ensure payment stablecoins are compatible and interoperable across different payment networks and blockchains.

Directs federal agencies to submit annual market and financial stability reports to Congress and requires the Treasury Department to study algorithmic and non-payment stablecoins.

Establishes a registration pathway allowing foreign payment stablecoins to be offered in the United States if their home regulatory regime is comparable to U.S. standards and they maintain sufficient U.S. reserves.

Exempts holdings of permitted payment stablecoins worth $5,000 or less from detailed public financial disclosure reporting for federal officials, treating them like bank deposits.