The GENIUS Act Is Law. Here's What Stablecoin Issuers Must Build Now.

After 25 years of watching financial services regulation evolve, I've learned one thing: the winners aren't the fastest movers. They're the ones who built compliance infrastructure before they needed it.

The GENIUS Act—signed into law on July 18, 2025—gives stablecoin issuers 18 months to comply. That sounds like plenty of time. It isn't.

What the Law Actually Requires

The GENIUS Act passed the Senate 68-30 and the House 308-122. This wasn't partisan warfare—it was bipartisan consensus that stablecoins need federal oversight. Here's what issuers must now deliver:

Reserve requirements: 1:1 backing with cash, Treasury bills, government money market funds, or Fed reserves. No commercial paper. No crypto assets. No loans to affiliates. The days of creative reserve definitions are over.

Redemption rights: Every holder gets the right to redeem at par. This must be operationalized—not just promised in terms of service nobody reads.

Regulatory path: Three options—subsidiary of an FDIC-insured bank, OCC-supervised nonbank, or state-chartered entity meeting federal standards. But here's the catch: state regulation caps at $10 billion in issuance. Grow beyond that, and you're federally supervised whether you like it or not.

The Compliance Clock Is Ticking

I've seen this pattern before. When new regulations pass, operators fall into three camps:

The first group panics, hires expensive consultants, and builds reactive compliance programs that cost twice what they should. The second group ignores the deadline until enforcement actions start, then scrambles. The third group—the smart operators—started building before the law even passed.

Which camp is your organization in?

The 18-month implementation window closes in January 2027. But final regulations could accelerate that timeline—the law triggers compliance 120 days after final rules if that's earlier. Regulators are already drafting.

What I'd Build First

Based on what I've observed across regulated stablecoin operations, here's the priority sequence:

First, reserve infrastructure. You need custody relationships with institutions that can hold Treasuries, segregated accounts, and daily reconciliation capabilities. This isn't something you spin up in a month. The issuers who already work with qualified custodians have a 6-month head start.

Second, attestation machinery. Monthly attestations by a U.S.-licensed CPA aren't optional—they're table stakes. If you're above $50 billion outstanding, you need full audited financials. Start those relationships now. Accounting firms are going to be capacity-constrained.

Third, redemption operations. The law requires "timely" redemption at par. What does timely mean? That's where regulatory guidance will fill gaps. But I'd design for same-day redemption capability, because that's where the bar will land.

Fourth, AML/BSA compliance. Stablecoin issuers are now "financial institutions" under the Bank Secrecy Act. Full KYC, transaction monitoring, suspicious activity reporting, sanctions screening. If you've been operating in the gray zone on identity verification, that ends now.

The $10 Billion Trap

Here's what nobody's talking about: the $10 billion state-regulation threshold creates a strategic cliff.

Below $10 billion, you can operate under state frameworks—potentially lighter touch, familiar regulators, established relationships. Above $10 billion, you're federally supervised. Different examiners. Different expectations. Different cost structure.

I've watched companies design their business models around regulatory thresholds before. Some will cap issuance just under $10 billion. Others will build for federal supervision from day one, accepting higher costs for unlimited scale. There's no wrong answer—but you need to make this choice deliberately, not accidentally.

What This Means for the Market

The GENIUS Act does something unprecedented: it removes compliant payment stablecoins from SEC and CFTC jurisdiction. They're not securities. They're not commodities. They're a new category—payment stablecoins—with their own regulatory framework.

This clarity will accelerate institutional adoption. Banks that have been waiting years for legal certainty now have it. Expect traditional financial institutions to enter stablecoin issuance within 24 months.

The compliance burden is real, but so is the opportunity. Issuers who get this right will capture institutional capital that's been sitting on the sidelines. Those who don't will find themselves competing against regulated alternatives with better reputations and deeper pockets.

The GENIUS Act isn't just regulation. It's the starting gun for the next phase of stablecoin competition. The question is whether you're ready to run.