Canonical: https://builtonarc.app/guides/arc-and-us-stablecoin-regulation # Arc and US stablecoin regulation — what the GENIUS Act actually says Updated 2026-09-02. The GENIUS Act, signed July 2025, sets a federal framework for payment stablecoins. What it covers, its timeline, and what remains unconfirmed. > The United States has a federal statute governing payment stablecoins: the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), signed into law on 18 July 2025 as Public Law 119-27. It sets reserve, disclosure and issuer-eligibility rules for "payment stablecoins," gives smaller issuers a state-regulation option below a $10 billion threshold, restricts foreign issuers, and sets a three-year transition period — running to July 2028 — before its core restriction on non-permitted issuers takes full effect. This guide reports what the statute's text says, sourced directly from the public law. It is not legal advice, does not predict how regulators will implement it, and does not assess Arc's or Circle's specific compliance status — those require qualified counsel and verification directly against current agency guidance. ## The statute, and how it got here The GENIUS Act began as Senate Bill 1582 in the 119th Congress, passed the Senate, cleared the House on 17 July 2025, and was signed into law on 18 July 2025, becoming Public Law 119-27. It is the first dedicated federal statute establishing a licensing and operating framework specifically for "payment stablecoins" — dollar-denominated tokens intended for payment or settlement use, as distinct from the broader category of cryptocurrencies generally. Nothing below should be read as commentary on whether the law is good policy, adequate, or likely to be amended — this guide reports what the enacted text says and when its provisions take effect, not a forecast of its future. ## Who can issue one: the federal and state paths The Act restricts who may lawfully offer or sell a payment stablecoin in the United States to "permitted payment stablecoin issuers." It creates two regulatory tracks rather than one. Larger issuers fall under direct federal oversight from a named group of regulators. Smaller issuers get a state-level option: per the statute's own text, "a State qualified payment stablecoin issuer with a consolidated total outstanding issuance of not more than $10,000,000,000 may opt for regulation under a State-level regulatory regime," provided that state's regime is substantially similar to the federal standard. That $10 billion threshold is a specific, sourced figure directly from the statutory text — not a rounded approximation. Rulemaking and supervisory authority under the Act is distributed across several federal regulators named in the statute: the Secretary of the Treasury, the Comptroller of the Currency, the Board of Governors of the Federal Reserve, the Federal Deposit Insurance Corporation, and the National Credit Union Administration for credit-union-related provisions, alongside state payment stablecoin regulators for issuers using the state track. The statute directs these regulators to "issue regulations consistent with [Section 13]" before a deadline set in that section — the exact number of days or months in that deadline was not visible in the version of the text this research reviewed, and should be confirmed directly against the statute or current agency guidance before being relied on for a compliance timeline. ## Reserve requirements The Act requires permitted issuers to back payment stablecoins on a strict one-to-one basis with a defined list of qualifying reserve assets: U.S. currency and Federal Reserve deposits; demand deposits at insured depository institutions; Treasury bills, notes or bonds with a remaining maturity of 93 days or less; repurchase and reverse-repurchase agreements collateralized by such short-term Treasuries; money market fund shares invested in the above; other liquid federal-government assets as regulators approve; and tokenized versions of any of the above, if otherwise compliant. Reserves generally cannot be rehypothecated, with narrow, statute-defined exceptions related to margin, custodial services, or generating liquidity specifically to meet redemptions. This is a materially more prescriptive reserve regime than stablecoin issuers operated under prior to the Act, and it applies to the reserve composition itself, not to disclosure alone. ## Foreign issuers The Act specifically restricts non-US stablecoin issuers' access to the American market. Per the statutory text: "It shall be unlawful for any digital asset service provider to offer, sell, or otherwise make available in the United States a payment stablecoin issued by a foreign payment stablecoin issuer unless the foreign payment stablecoin issuer has the technological capability to comply, and will comply, with the terms of any lawful order." Foreign issuers seeking US market access are also required to meet blocking-and-freezing obligations comparable to those imposed on domestic permitted issuers. The statute treats this as a distinct compliance track from the domestic federal/state framework described above, layering additional conditions specifically onto issuers organized outside the United States. ## The timeline: what's dated, and what to verify independently The Act's central prohibition — that it becomes unlawful for a digital asset service provider to offer or sell a payment stablecoin to a US person unless it's issued by a permitted issuer — takes effect, per the statutory text, "beginning on the date that is 3 years after the date of enactment of this Act." Enactment was 18 July 2025, which places that deadline at **18 July 2028**. That is the one hard, sourced date this guide can confirm for the transition period's endpoint. Separately, the statute sets a regulatory rulemaking deadline under its Section 13, referenced but not fully quoted in the source text reviewed for this guide — Built on Arc could not independently confirm that specific date and marks it **not yet confirmed as of 2 Sep 2026**. Whether federal regulators have in fact issued proposed or final implementing rules as of this writing was also not confirmed in this research pass; a check of Treasury's, the OCC's, and the Federal Reserve's current press materials in late August 2026 did not surface a stablecoin-specific rulemaking announcement, but that is an absence of evidence found, not confirmation that no rulemaking activity exists — readers needing current status should check the relevant agencies' rulemaking dockets directly. ## Where Arc and Circle sit in this framework — stated narrowly Circle, which operates Arc and issues USDC and EURC, is a US-based, publicly traded nonbank stablecoin issuer — the kind of entity this framework is built to regulate. Built on Arc did not find, and does not claim to have found, a specific public determination of Circle's certification status as a "permitted payment stablecoin issuer" under the GENIUS Act as of 2 Sep 2026, nor does this guide predict how that determination will resolve. What can be stated plainly is narrower: Arc's gas and settlement asset, USDC, is issued by an entity operating inside the jurisdiction this statute directly targets, and any institution evaluating Arc for US-facing regulated activity should treat GENIUS Act compliance as a live, relevant question to raise with Circle and with its own counsel — not one this guide resolves. ## What this guide deliberately does not do It does not predict how any named regulator will implement its rulemaking authority. It does not offer an opinion on whether Circle, USDC, EURC, or any Arc-related entity currently satisfies or will satisfy the Act's requirements. It does not constitute legal advice, and nothing in it should be relied on as a substitute for review by qualified counsel familiar with current implementing guidance, which continues to evolve. Sources: - [Public Law 119-27 (GENIUS Act), full text](https://www.govinfo.gov/content/pkg/PLAW-119publ27/html/PLAW-119publ27.htm) - [Public Law 119-27, GovInfo bill detail page](https://www.govinfo.gov/app/details/PLAW-119publ27) - [Wikipedia: GENIUS Act (background and signing date)](https://en.wikipedia.org/wiki/GENIUS_Act) *Built on Arc is an independent directory. Arc is a Circle product; we are not affiliated with, endorsed by, or operated by Circle. Nothing in this guide is legal advice.* ## Questions **When did the GENIUS Act become law?** 18 July 2025, as Public Law 119-27, following House passage on 17 July 2025. **When does its core issuer restriction take full effect?** Three years after enactment, per the statute's own text — 18 July 2028. **What's the $10 billion figure about?** It's the threshold under which a state-qualified payment stablecoin issuer may opt for state-level regulation instead of the federal track, per the statute's text, provided the state regime is substantially similar to federal standards. **Does the Act ban foreign stablecoin issuers outright?** No — it conditions their US market access on demonstrated technical capability and commitment to comply with lawful orders, plus blocking-and-freezing obligations, rather than an outright ban. **Is Circle a certified "permitted payment stablecoin issuer" under the Act?** Not confirmed by this research as of 2 Sep 2026 — Built on Arc did not locate a public determination either way, and does not speculate on the outcome. **Should this guide be used to make a compliance decision?** No. It summarizes statutory text for informational purposes only; any actual compliance determination requires qualified legal counsel and current agency guidance, which this guide does not substitute for.