The GENIUS Act celebrated its one-year anniversary on July 18, 2022, which is an important milestone for the U.S. digital asset industry. The stablecoin bill was signed into law by President Donald Trump on the same day in 2025.
Since then, the act has made financial institutions more comfortable to create the payment products based on the blockchain. Even so, the system is still not in place, since federal agencies are still drafting specific regulations that will carry out the law.
GENIUS Act Turns One In Washington
The GENIUS Act stipulates that payment stablecoins must be backed by a one-to-one ratio with cash or other very liquid assets. It also sets out general principles of management, transparency and financial crime controls for reserves. However, there are still some essentials that need to be developed.
The Treasury Department, Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) are still working on the rules in regard to customer-identification, anti-money laundering (AML), sanctions compliance, liquidity and capital. There are also public consultation periods that are ongoing as the rules are still being worked on.
Despite not having the final rulebook, industry has been quick to move. In the last year, banks, fintech companies and payment providers have continued to increase their stablecoin offerings. The law has given businesses a level of confidence to start investing in blockchain infrastructure.
Circle, the issuer of USDC, hailed the law as an important milestone for the industry. The company said, “The GENIUS Act […] sets consistent standards for reserve backing, transparency, and consumer protections, paving the way for […] innovation in the digital asset space.” Circle has also been given permission to create a national trust bank, which will enable future USDC reserves to be subject to federal oversight.
Now, it’s up to regulators to take the next step, experts say. Nellie Liang, a Brookings senior fellow, commented, “While the GENIUS Act clarifies much, financial regulators must now write rules.” Her remarks reveal the industry’s interest in the practical requirements that will be imposed by the regulators in implementing the law.
What’s Next For The CLARITY Act?
Focus has now shifted towards the CLARITY Act. It is a bill that would establish a much more comprehensive regulatory framework for digital assets that does not only apply to stablecoins. However, the bill is not being as readily accepted in the Senate as the GENIUS Act.
Several Democratic lawmakers are still worried about ethics provisions and President Trump’s crypto business activities, along with whether the legislation includes more safeguards against illicit finance, Bloomberg reported. There needs to be a compromise between the Banking and Agriculture Committee versions by the law makers before it goes any further.
The time schedule is getting shorter. The Senate now plans to start its August recess after Aug. 7. There is little time for lawmakers to consider the latest draft. Axios noted that discussions are stalled on ethics language that was recommended following Trump’s disclosure that he made $1.4 billion from his crypto businesses since taking office for his second term. This placed yet another hurdle in Congress on the CLARITY Act.
