US Launches First Federal Stablecoin Regulation: The GENIUS Act Explained

The U.S. has enacted its first federal regulation for payment stablecoins, officially known as the GENIUS Act. This landmark legislation, signed on July 18, 2025, establishes a framework for stablecoin issuers to maintain compliance and transparency. The GENIUS Act mandates 1:1 reserves and regular audits, directly impacting market dynamics and issuer practices. The act also raises concerns about regulatory arbitrage and the potential for interest-rate gaps in the emerging stablecoin sector.