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GENIUS Act: Payment Stablecoins Coming to a Retailer Near You (Maybe)

The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) (S. 1582) establishes the first U.S. framework specifically regulating “payment stablecoins,” and sets forth regulatory and licensing requirements for various U.S. issuers as well as additional standards governing any foreign company participation. It was signed into law on July 18, 2025. It also presents a groundbreaking opportunity for non-financial companies (e.g., commercial retailers, tech companies and other service providers) to legally issue their own branded stablecoins, provided they meet the law’s stringent requirements. By adhering to these stringent regulatory requirements, companies can unlock new payment capabilities and enhance customer engagement, marking a significant shift in the digital asset landscape.  

Here are some key aspects non-financial companies need to be aware of if they are interested in leveraging this transformative opportunity to expand into digital payments: 

  • Strategic Opportunity: Branded stablecoins under the GENIUS Act can provide nonfinancial companies with a transformative opportunity to expand into digital payments, enhance customer engagement and build brand loyalty, all within the framework of stringent regulatory compliance.
  • Full Compliance with Regulatory Requirements: Companies must maintain 100% reserve backing to fully back the issued stablecoins, publish monthly reserve reports, and adhere to anti-money laundering (AML) requirements while upholding strict consumer protection standards.
  • Approvals and Certifications: To operate as a federally qualified stablecoin issuer, companies must endure a multi-agency certification process, including obtaining unanimous approval from the Stablecoin Certification Review Committee, demonstrating no risk to the financial system, and securing approval from the Office of the Comptroller of Currency (OCC).
  • Comply with Data and Consumer Protection Rules: Non-financial companies must restrict consumer transaction data use to disclosed purposes, strictly prohibit the use of consumer data for targeted advertising without consumer consent and comply with anti-tying restrictions (i.e., not linking stablecoin access to other products or prohibiting the use of competitor stablecoins).

Distinction from rewards and loyalty tokens:

  • Companies exploring digital asset loyalty initiatives must carefully evaluate the structure and transferability of token-based programs to ensure compliance with regulatory obligations. Payment stablecoins regulated under the GENIUS Act differ from closed-loop, non-fiat-pegged rewards tokens commonly used in loyalty programs. Closed-loop tokens are typically limited to an issuer’s ecosystem (e.g., store discounts or in-store purchases) and are not pegged to fiat currency. As such, they generally fall outside the scope of federal payment regulation. 
  • However, if these tokens become widely transferable, redeemable for cash or usable to purchase third-party goods or services, they may trigger regulatory scrutiny and require compliance with payments regulation frameworks.

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