On Friday, President Trump signed the GENIUS Act into law, capping off the first major legislative effort to regulate crypto assets, in this case payment stablecoins. A White House Fact Sheet notes that “[t]he GENIUS Act prioritizes consumer protection, strengthens the U.S. dollar’s reserve currency status, and bolsters our national security.” The Fact Sheet also states that “[t]he GENIUS Act will make America the undisputed leader in digital assets, bringing massive investment and innovation to our country.”

SEC Chairman Paul Atkins issued a statement marking the signing of the legislation, noting:

The GENIUS Act provides necessary guidance for a crucial element of the emerging crypto asset ecosystem. Clear payment stablecoin regulation allows companies and individuals to transact in ways that boost efficiency and lower costs. Payment stablecoins will play a significant role in the securities industry moving forward, which is why I have asked SEC staff to consider whether guidance, rulemaking, or other steps may be helpful to accommodate SEC registrants utilizing payment stablecoins, including for settlement and margining. I invite market participants to engage with the SEC staff on what is needed for our securities markets to take advantage of the GENIUS Act’s full potential.

Commissioner Hester Pearce also issued a statement, noting:

The signing of the GENIUS Act into law marks an important milestone in the effort to bring regulatory clarity to crypto—a necessary prerequisite for innovation in our markets to flourish and for the American public to benefit from that innovation. The new law confirms that payment stablecoins are not securities. People have voted with their dollars—privately issued stablecoins already enjoy broad use as a payments mechanism. The GENIUS Act, by putting a regulatory framework around them, aims to protect current and future users and the financial system. The GENIUS Act charges state and federal banking regulators with overseeing payment stablecoin issuers. This clear direction from Congress also should serve as a catalyst for the SEC to provide guidance on how SEC registrants can use—and accommodate their customers’ use of—payment stablecoins. I invite investors and market participants regulated by the SEC to engage with the Crypto Task Force on what the Commission needs to do, in light of the GENIUS Act, to ensure that SEC registrants interacting with payment stablecoins can serve their customers effectively, efficiently, and safely.

As this WilmerHale alert indicates, the GENIUS Act will take effect either 18 months after its passage or 120 days after final regulations are issued, whichever comes first, while the regulations implementing the GENIUS Act must be issued within one year of enactment.

– Dave Lynn