Stablecoins are now a roughly $300 billion market, and most crypto futures are priced and margined in them. When the US passed its first stablecoin law in July 2025, it set rules that will shape how USDT, USDC and new bank-issued tokens work for years.
This guide explains what the GENIUS Act requires, where implementation stands in 2026, what it means for Tether's USDT, and how it affects traders who use stablecoins as collateral.
What is the GENIUS Act?
GENIUS, the Guiding and Establishing National Innovation for US Stablecoins Act, is a federal law in the United States that establishes a regulatory framework for US stablecoins. It was introduced by Senator Bill Hagerty (R-TN) in the Senate Banking, Housing, and Urban Affairs Committee and is one of many pieces of legislation aimed at addressing crypto regulations in the US. GENIUS outlines what a 'permitted payment stablecoin' is and the conditions for a stablecoin issuer to issue payment stablecoins in the US.
The US government differentiates between bank-issued stablecoins, which are overseen by the Federal Reserve and other federal banking regulators, and non-bank payment stablecoins, which require licensing under state law for smaller issuers and under a federal framework for issuers with a market cap of more than $10 billion. GENIUS also applies to stablecoin issuers outside the US. Here's a breakdown of its most important points for stablecoin traders on Bitunix.
The Genius Act Timeline
Date | Milestone |
February 4, 2025 | Sen. Bill Hagerty introduces the original bill (S.394) |
May 19, 2025 | Senate votes to advance the revised bill (S.1582), 66–32 |
June 17, 2025 | Senate passes the bill, 68–30 |
July 17, 2025 | House passes the bill, 308–122 |
July 18, 2025 | President Trump signs the GENIUS Act into law |
July 18, 2026 | Deadline for regulators to issue rules (missed) |
January 18, 2027 | Latest date the Act takes effect |
July 18, 2028 | Platforms may offer US persons only stablecoins from permitted issuers |
Sources: Public Law 119-27 (govinfo), White House fact sheet, House Financial Services section-by-section
GENIUS Act Key Points
Payment stablecoin issuers and operations under the legislation must follow these stipulations:
Issuers have to maintain 1:1 reserves in dollars or short-term US Treasury bills, or other liquid instruments. There is no fractional reserve and no algorithmic backing allowed under GENIUS.
All payment stablecoin issuers need to be licensed by a designated US regulator (either federally or at state level, depending on the size of the company).
Stablecoin issuers also need to comply with AML (anti-money laundering) and KYC (Know Your Customer) standards, in line with Bank Secrecy Act provisions.
Stablecoin users are able to redeem their stablecoins at 1:1 with the issuer. This is an inherent condition for stablecoin issuers and not just a marketing promise or a market-driven phenomenon.
Stablecoin issuers that are foreign to the US but issue to people in the US also need to meet these requirements, otherwise they cannot operate in the country.
When Does the GENIUS Act Take Effect?
The Act takes effect on the earlier of two dates: January 18, 2027, or 120 days after regulators issue final rules. Regulators were due to finish their rules by July 18, 2026, but none had issued a final implementing rule by that date. Any final rule issued after September 20, 2026 can no longer bring the date forward, so January 18, 2027 is now the effective date in practice.
Rulemaking is well under way:
Regulator | Rulemaking so far | Status (October 2026) |
Treasury | Advance notice (Sept 2025); proposals on state regimes (April 2026) and on issuance, offer and sale, including foreign issuers (August 2026) | Proposals; comments on the August rule close October 19, 2026 |
OCC | Comprehensive proposal (March 2026); Bank Secrecy Act proposal (June 2026) | Final rule expected in late 2026 |
FDIC | Application procedures (Dec 2025); prudential standards (April 2026) | Proposals |
Federal Reserve | Comprehensive proposal (September 2026) | Comments close November 30, 2026 |
NCUA | Licensing and issuer standards (February and May 2026) | Proposals |
FinCEN and OFAC | AML and sanctions program rules (April 2026) | Proposal |
Sources: Federal Register: Treasury issuance rule, Federal Register: Federal Reserve proposal, Morgan Lewis implementation tracker, CoinDesk.
Two dates matter most for the market. From January 2027, issuing payment stablecoins in the US without a license becomes illegal. From July 18, 2028, exchanges and other platforms may no longer offer US persons stablecoins from issuers that are not permitted.
How GENIUS Affects Crypto Traders
The stablecoin law provisions in GENIUS are relevant to traders and other participants in the crypto market, for example traders using USDT as futures margin on Bitunix.
The most noticeable effect is on Tether (USDT), the largest stablecoin globally, which is issued in the US but registered outside it. The US stablecoin law stipulates foreign-issued stablecoins. That means Tether is required to meet the GENIUS Act stipulations to keep its current access to US persons. The GENIUS Act is likely one reason why Tether has been more focused recently on providing transparent information on its reserves and compliance.
However, for traders outside the US, the more important part of GENIUS and the US Stablecoin Act is what this means for overall crypto market sentiment. As long as stablecoins are the largest segment of the market (by market cap), the US stablecoin legislation and other regulations will have a bearing on the trading of stablecoins, including trading USDT futures on Bitunix. Stablecoin regulation under the Act is still evolving; it centers on centralized payment stablecoins and is not currently focused on decentralized tokens issued by crypto protocols.
Who Else Is Affected by the GENIUS Act?
The Act is drawing banks and fintechs into stablecoins and pushing existing issuers toward federal oversight:
Circle (USDC): the second-largest stablecoin, at about $73 billion. Circle received final OCC approval for a national trust bank in July 2026 (Circle).
Banks: SoFi launched SoFiUSD, issued by its national bank, in May 2026. In September 2026, a group of 21 banks including Citi, Goldman Sachs and Bank of America announced a joint dollar stablecoin targeted for 2027.
Other issuers: PayPal's PYUSD and World Liberty Financial's USD1 stablecoin are among the tokens positioning for the new rules.
DeFi: the Act regulates issuers of payment stablecoins, not DeFi protocols. Decentralized and algorithmic stablecoins fall outside its definition, which leaves their treatment to future rules.
GENIUS Act vs CLARITY Act vs MiCA
The GENIUS Act covers only stablecoins. Rules for the wider crypto market sit in other laws:
| GENIUS Act (US) | CLARITY Act (US) | MiCA (EU) |
Scope | Payment stablecoins | Market structure: which crypto assets the SEC or CFTC oversees | All crypto assets and service providers, including stablecoins |
Status | Law since July 18, 2025; effective by January 18, 2027 | Passed the House July 2025; failed a Senate procedural vote 49–50 on September 15, 2026 | Fully applicable; transition period ended July 1, 2026 |
Reserve rules | 1:1 in cash and short-term Treasuries | Not applicable | Reserves required; issuers need EU authorization |
Effect on USDT | Needs the foreign-issuer path to serve US users after 2028 | Indirect | Not authorized; delisted for EEA users on major exchanges since 2025 |
Sources: Orrick on the CLARITY Act, AMF on the end of the MiCA transition.
For the market impact of these rules, see our reports on the CLARITY Act setback in the Senate and on MiCA enforcement and the CLARITY Act timeline.
Stablecoin Compliance Implications for USDT Trading on Bitunix
Bitunix is a crypto derivatives exchange that supports USDT perpetual futures. Stablecoin compliance under the GENIUS Act could impact future stability and availability of USDT and other stablecoin margin assets on global crypto exchanges over the long-term. For traders using USDT as collateral to open futures positions, it is important to keep abreast of US Tether (USDT) stablecoin compliance developments and any regulatory or market structure impacts resulting from the Act's passage.
From a risk perspective, the GENIUS Act's reserve requirements and redemption guarantees, if adopted by major stablecoin issuers, would add structural support to the stablecoins being used as collateral in USDT perpetual futures contracts. More regulation in the stablecoin sector would lower the likelihood of a major depegging event, such as occurred in 2022, that can cause cascading losses for crypto positions.
Conclusion
The GENIUS Act represents a landmark event in the trajectory of stablecoin regulation globally. By introducing mandatory reserve requirements, stablecoin issuer licensing, and AML/KYC obligations, it establishes a new set of standards that could transform the way stablecoins are issued and utilized in U.S. and global crypto markets in 2026 and into the future. For Bitunix traders trading USDT perpetual futures, it is important to understand the key provisions and implications of the Act and follow its progressive implementation as a part of ongoing risk management education and best practices. As always, Bitunix strives to provide our crypto futures customers with essential educational content on navigating the dynamic crypto regulatory environment.
