HOW TO ACT LIKE A GENIUS?

Summary from the TLDR Crypto newsletter

The GENIUS Act establishes a federal framework for payment stablecoins, allowing banks and federally recognized nonbanks to issue stablecoins under strict reserve, custody, governance, and compliance rules. State issuers can participate if their regimes substantially mirror federal standards and issuance stays under $10 billion. Compliance requirements include face-value redemptions within defined timeframes, backing with safe liquid assets like cash and short-dated Treasuries with monthly reserve reports, capital buffers above reserves, full AML/BSA programs, lawful freeze capabilities, and prohibitions against coercive tying arrangements that force stablecoin usage for other services. The framework prohibits paying holders interest for simply using or holding stablecoins but allows rewards tied to usage, loyalty programs, whitelabeled issuance, and merchant involvement focused on service value rather than interest distributions. Only US-formed entities can issue domestically for full access. Foreign issuers face restrictions and second-tier status unless exceptional compliance is achieved. Key implementation dates include regulator rulemaking by July 2026, GENIUS taking effect by January 2027, and restricted status for non-compliant foreign stablecoins on US platforms by July 2028.