Thomas P. Gross, B.S., M.S., J.D.
Partner, Cogent Law Firm
On July 18, 2025, President Donald Trump signed into law the GENIUS Act—short for Guiding and Establishing National Innovation for U.S. Stablecoins—marking a major milestone in the regulation of digital assets in the United States. The law creates, for the first time, a federal regulatory structure for privately issued stablecoins backed by the U.S. dollar or equivalent liquid assets. These stablecoins may now serve as digital equivalents to the U.S. dollar under a unified federal regime.
SEC Paved the Way
The GENIUS Act follows the April 4, 2025, announcement by the Securities and Exchange Commission (SEC), which significantly reshaped the regulatory landscape for stablecoins. In a Statement issued by the SEC's Division of Corporate Finance, the agency clarified that stablecoins backed on a one-to-one basis by U.S. dollars do not constitute the offer or sale of securities under the Securities Act of 1933 or the Securities Exchange Act of 1934. Therefore, such stablecoins are not required to be registered as securities.
Read the SEC Statement:
https://www.sec.gov/newsroom/speeches-statements/statement-stablecoins-040425
Industry Reaction and New Offerings
In the wake of the SEC’s Statement, major institutions moved quickly. Société Générale launched USDCV, a stablecoin backed by reserves held at Bank of New York Mellon, and Standard Chartered worked with Animoca Brands, a Web3 leader based in Hong Kong, to issue a Hong Kong-licensed stablecoin. These moves signaled a rapid acceleration in private stablecoin development and highlighted the growing need for a consistent regulatory framework—one that the GENIUS Act now seeks to provide.
Key Provisions of the GENIUS Act
According to a Fact Sheet released by the U.S. Senate Committee on Banking, Housing, and Urban Affairs, the GENIUS Act establishes a comprehensive set of rules for U.S. dollar-backed payment stablecoins.
Reserve and Disclosure Requirements
Under the Act, all approved payment stablecoins must:
- Be 100% backed by U.S. dollars, short-term U.S. Treasuries, or similarly liquid assets as defined by their primary federal regulator.
- Publicly disclose their reserve composition on a monthly basis.
- Submit annual audited financial statements if the issuer’s market capitalization exceeds $50 billion.
Strict Marketing and Consumer Protection Rules
The GENIUS Act imposes rigorous marketing standards to protect consumers and prevent misrepresentation. Among other things, the Act :
- Prohibits any claim that stablecoins are backed by the full faith and credit of the U.S. government, guaranteed by the government, or covered by FDIC insurance.
- Forbids marketing stablecoins as legal tender, or implying they are issued or approved by the U.S. government.
- Makes it illegal to advertise a digital asset as a payment stablecoin unless it fully complies with the GENIUS Act.
A New Era for Digital Dollars
The GENIUS Act represents a critical and pivotal moment in digital asset regulation, creating a clear pathway for compliant, privately issued, U.S. dollar-backed digital assets. While it does not establish a central bank digital currency (CBDC), the Act signals that the federal government is open to innovation—provided it operates under a transparent and secure regulatory framework.
As the market responds, the Act is expected to catalyze a wave of new stablecoin products issued by banks, fintechs, and global institutions alike—reshaping how digital dollars are created, used, and trusted in both domestic and international finance.
Read the full Senate Banking Fact Sheet Here: U.S. Senate Committee Banking, Housing, & Urban Affairs Fact Sheet:
https://www.banking.senate.gov/imo/media/doc/genius_fact_sheet_-_consumer_protectionpdf.pdf
Contact Thomas Gross for more information:
tgross@cogentlaw.com
July 23, 2025
TUESDAY, AUGUST 20TH, 2025 12:00 – 1:00 PM EST LIVE WEBINAR + Q&A VIRTUAL EVENT
June 5, 2025
Explore how legal, IT, and payment systems can work together to drive profitability and reduce risk in today’s banking landscape. Event Description: A must-attend webinar for financial institutions, credit unions, and banks navigating the challenges of 2025. Learn how combining legal strategy, IT infrastructure, and modern payment systems can drive profitability while minimizing compliance and cyber risks. Join three industry experts for a tactical discussion on what’s working (and what’s not) when it comes to Risk and compliance management, IT modernization, revenue-generating tools for FIs and cannabis banking strategy. Topics Covered: How to identify and close profitability gaps Real risks to watch in today’s regulatory and tech environment Strategies for building compliant, revenue-positive CRB programs Tools and services that drive operational efficiency Mini case studies from financial institutions who’ve made the leap Who Should Watch? Credit Union & Community Bank Executives Compliance, Risk, and Legal Teams IT, Operations & Security Leaders Anyone exploring cannabis or high-risk banking strategies Meet the Speakers: Daniel Garedew Founder, Merchant Services United Daniel partners with banks, credit unions, and small businesses to reduce payment processing costs, optimize POS and ATM setups, and boost fee-based income. He’s known for his hands-on support and trusted relationships with financial institutions and community partners across the DMV region. Michael Drobnis CEO, OptfinITy Michael brings 30+ years of tech leadership, with deep expertise in cybersecurity, regulatory compliance (FFIEC, PCI), and managed IT services for financial institutions. Under his leadership, OptfinITy has been nationally recognized for helping FIs modernize infrastructure while staying secure. Chris Van Dyck Partner, Cogent Law Group Chris is a former financial regulator and longtime BSA Officer with nearly a decade of experience building one of the most successful cannabis banking programs in the U.S. He now advises credit unions and banks on launching compliant, revenue-generating programs tailored to their regulatory environments. Register now - FREE Bonus Is your Financial Institution offering, or considering offering, financial services to cannabis-related businesses (CRB’s)? Below is a checklist developed by Chris to assist your Financial Institution so that it appropriately manages the risks, and meets the regulatory expectations, of having a CRB program. Click Here to download the checklist.
June 5, 2025
Event Description: Join Tony Repanich (Shield Compliance) and Chris Van Dyck ( Cogent Law ) for a fireside chat with two of the industry's leading voices in cannabis banking. This discussion explores how financial institutions are approaching compliance, lending, risk, and strategy in an evolving regulatory landscape and what your institution needs to know to stay ahead. Topics Covered: Recent federal developments and what they mean for banks and credit unions How to approach cannabis lending opportunities Strategies for managing risk and distinguishing your CRB program What makes a CRB a good client—and how to attract them Key service offerings to stay competitive Board engagement: why it matters and how to maintain it Who Should Watch? Bank & credit union executives Compliance, BSA/AML, and risk officers Legal and policy teams Anyone exploring or managing a CRB banking program Meet the Speakers: Tony Repanich President and CEO, Shield Compliance Tony Repanich is the President and Chief Executive Officer of Shield Compliance, where he leads the company’s strategic direction and serves as the principal architect of its compliance solutions. With over 30 years of experience in the financial services industry, including two decades as a senior executive at a Washington State-based community bank, Tony brings deep expertise in banking operations, regulatory compliance, and risk management. At Shield Compliance, he leverages this experience to help financial institutions navigate the complex regulatory landscape of serving high-risk industries, including the legal cannabis industry. His leadership drives the development of purpose-built solutions that enable banks to manage risk, streamline operations, and expand into high-growth markets. Chris Van Dyck Partner, Cogent Law Group Chris is a former financial regulator and longtime BSA Officer with nearly a decade of experience building one of the most successful cannabis banking programs in the U.S. He now advises credit unions and banks on launching compliant, revenue-generating programs tailored to their regulatory environments. Register Now – Free Bonus Is your Financial Institution offering, or considering offering, financial services to cannabis-related businesses (CRB’s)? Below is a checklist developed by Chris to assist your Financial Institution so that it appropriately manages the risks, and meets the regulatory expectations, of having a CRB program. Click Here to download the checklist.
