GENIUS Act

The definition above lists the reserve and disclosure rules; what it leaves out is who may issue at all. Once in effect, the Act limits issuance of a payment stablecoin in the United States to permitted issuers: a subsidiary of an insured bank, a federally approved nonbank issuer, or a state-licensed issuer operating under a state regime certified as substantially similar to the federal one. A payment stablecoin from a permitted issuer is also excluded from the definitions of security and commodity.

The narrow bank analogy holds on the asset side: reserves sit in cash, insured deposits, short Treasuries, overnight repos and government money market funds, and cannot be pledged or reused beyond narrow exceptions for margin, custody and repurchase agreements of 93 days or less used to meet redemption liquidity. It breaks on the liability side. A bank deposit is insured and backed by central bank lending. A stablecoin holder has neither, so the only defense against a depeg is the reserve itself and the holder's priority over it in insolvency.

The interest prohibition binds the issuer, not necessarily the platforms that distribute the token. Whether an exchange or affiliate can pay holders rewards from its own revenue is the point banking groups have contested most, because it decides whether the token competes with a deposit.

For an institution holding or accepting stablecoins, the decision is one of issuer status: whether a given token comes from a permitted issuer, under which regulator, since a token outside that perimeter carries none of these protections.