After a rocky start to its highly-anticipated “Crypto Week,” the House of Representatives voted 308–122 to adopt the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the “GENIUS Act”) on Thursday July 17, 2025, sending landmark crypto legislation to the President’s desk for signature. The House also adopted a broader market infrastructure bill, the Digital Asset Market Clarity Act of 2025 (the “CLARITY Act”), as well the Anti-CBDC Surveillance State Act (the “Anti-CBDC Act”), both of which now head to the Senate for action.
With both the GENIUS and CLARITY Acts attracting wide bipartisan margins, the United States appears poised to adopt a comprehensive regulatory framework for digital assets, a prospect that seemed highly unlikely barely a year ago.
Below we briefly summarize the GENIUS, CLARITY, and Anti-CBDC Acts. As attention turns back to the Senate for action on market infrastructure legislation, we will monitor developments and provide updates as warranted.
GENIUS Act
In an earlier post, we discussed competing stablecoin bills that worked their way through the House and Senate, respectively, over the course of 2025. The Senate acted first, passing its measure, the GENIUS Act, on June 17, 2025. At the urging of President Trump—who posted on social media that it would make the United States the “UNDISPUTED, NUMBER ONE LEADER in Digital Assets”—the House took up the Senate measure rather than its own STABLE Act.
The GENIUS Act governs “payment stablecoins,” defined to mean digital assets that can be used as a means of payment or settlement, which the issuer must convert, redeem, or repurchase for a fixed amount of monetary value. The term excludes tokenized deposits and securities under the Securities Act of 1933 or the Investment Company Act of 1940.
The legislation creates a pathway for both subsidiaries of insured depository institutions and nonbank financial institutions to become stablecoin issuers. Specifically, an issuer must either obtain a federal license or operate under a state licensing regime that federal regulators deem to be “substantially similar” to the federal framework. In a feature that initially met with resistance in the House, the GENIUS Act creates a two-tier framework and includes a presumption that issuers with more than $10 billion of stablecoins in circulation will become subject to federal regulation, unless federal authorities grant a waiver allowing a state-licensed issuer to remain within the relevant state framework.
Whether state- or federally-regulated, stablecoin issuers must satisfy the following requirements, among others:
- Reserves. Issuers must maintain a one-to-one reserve backing for all outstanding stablecoins. Reserves must be held in high-quality liquid assets, including U.S. currency, insured bank deposits, short-term Treasury bonds, or tokenized equivalents of these instruments. Payment of interest or yield and (except in narrow circumstances) rehypothecation of reserves are prohibited.
- Reporting Regime. The legislation mandates a robust disclosure and audit regime. Issuers must publish monthly reports detailing the composition of their reserves and the total supply of outstanding stablecoins. These disclosures must be certified by senior executives and verified through independent audits conducted by registered public accounting firms. For issuers with more than $50 billion in circulation, annual audited financial statements are also required.
- AML and Sanctions. The GENIUS Act subjects all issuers to the full scope of the Bank Secrecy Act (“BSA”): implementation of comprehensive AML programs, sanctions screening protocols, and suspicious activity reporting (“SAR”) mechanisms. Additionally, the Financial Crimes Enforcement Network (“FinCEN”) is tasked with issuing tailored rules to address the unique risks posed by digital assets, including the use of novel detection technologies.
- Infrastructure Readiness and Integration. The GENIUS Act also requires that issuers maintain the ability to freeze and burn wallets where required by lawful orders to do so. Moreover, the GENIUS Act effectively lowers barriers to integrating blockchain functionality into traditional financial infrastructure. Both suggest a coming wave of technical investment and readiness efforts with concomitant compliance obligations.
CLARITY Act
With “Crypto Week” now concluded, the House has surpassed the Senate in one important respect: action on a broader market infrastructure bill that would govern all digital assets rather than only payment stablecoins. Specifically, the chamber voted 294–134 to pass the CLARITY Act, which would create a comprehensive regulatory framework for “digital commodities.” Although prospects for the bill are uncertain in the Senate, the strong bipartisan support it received in the House may spur action on the CLARITY Act on the other side of Capitol Hill as well.
We anticipate discussing the CLARITY Act in greater detail in future posts, especially as the direction of travel becomes clearer in the Senate. Briefly, however, key features include:
- Allocation of regulatory authority between the Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”), with the SEC having responsibility for overseeing, among other things, primary market activities and alternative trading systems and the CFTC taking a broad role as the market regulator responsible for digital commodity exchanges and intermediaries.
- A provisional registration regime for exchanges, brokers, and dealers in digital commodities, allowing activity to continue pending full registration with the CFTC.
- Disclosure and anti-fraud provisions for digital asset offerings.
- Safe harbors for decentralized finance (“DeFi”) and various other blockchain applications.
Anti-CBDC Act
The Anti-CBDC Act would prohibit the Federal Reserve Board from issuing a central bank digital currency (“CBDC”), whether directly to individuals or through an intermediary. The legislation would codify similar provisions contained in one of the earliest Executive Orders of the second Trump administration, E.O. 14179, issued January 23, 2025 and titled “Strengthening American Leadership in Digital Financial Technology.”
The measure is very popular in the libertarian wing of the Republican caucus, and a group of 13 Republican representatives threatened to block all action during “Crypto Week” unless it was adopted. To improve its chances of passage in the Senate, the Anti-CBDC Act was added to the National Defense Authorization Act, the annual must-pass military spending bill, and garnered a narrow 219–210 margin.
What’s Next?
President Trump signed the GENIUS Act into law on Friday, July 18. Attention will now turn to the Treasury Department, federal banking agencies, and state regulators for the various rulemakings required to implement its provisions. Although the statute requires such rules to be issued within one year, it is difficult to predict when the stablecoin framework will be fully in place.
One thing is clear, however: market participants should begin considering how the new landscape will affect them and take proactive steps to prepare, whether by planning for an issuer application and stablecoin launch or considering how to protect existing market share in the payments space. With stablecoin market capitalization already estimated to be more than $260 billion, most analysts expect a dramatic increase once the regulatory framework is settled.
All stakeholders in the digital asset industry, moreover, should stay vigilant regarding developments in the Senate, as it either takes up the CLARITY Act or advances a companion measure in the coming weeks. Market infrastructure legislation like this has long been the holy grail for crypto companies, and it will be important to keep abreast of how it takes shape and what the emerging landscape could mean for their business model and compliance obligations.
