The GENIUS Act Passed — Here’s What It Means for USDC and Stablecoin Adoption

It’s official: The GENIUS Act was signed into law on July 18, 2025. This marks a significant milestone for stablecoins like USDC. After years of regulatory uncertainty, stablecoins are now operating under a formal legal framework — and that’s a big deal for both retail users and institutional players.

This is a turning point for anyone using Coinbase, the largest distributor of USDC, to transfer money, settle payments, or manage digital liquidity - including consumers, payment service providers, banks, and businesses.

What Is the GENIUS Act?

The GENIUS Act (short for Guiding and Establishing National Innovation for U.S. Stablecoins) is the first federal law in the U.S. specifically designed to regulate dollar-backed stablecoins. Its goal is simple: bring transparency, safety, and regulatory clarity to the growing market of digital dollars.

Here’s what the law will require:

• 1:1 backing: All stablecoins must be fully backed by U.S. dollars or 3-month U.S. Treasury bills — no crypto, no leverage.

• Monthly reserve disclosures and annual audits for large issuers (those with more than $50 billion in circulation).

• Strict anti-money laundering (AML) compliance in line with federal financial institutions.

• Legal protections for users: If an issuer goes under, stablecoin holders have senior rights to the reserves.

• Federal and state supervision: Larger issuers will fall under federal regulators like the OCC, while smaller ones may continue under state oversight. 

What This Means for Institutions

USDC has long been a trusted, transparent, and fully backed digital dollar used by institutions for settlement, liquidity, and trading. The GENIUS Act will open the door to more serious and scalable integration of USDC into financial workflows:

• Regulatory clarity for USDC: With USDC already operating under strong oversight, the Genius Act will give institutions added confidence to expand use in cross-border payments, on-chain settlement, and liquidity management within a defined federal framework.

• Enhanced counterparty trust: USDC’s existing transparency and reserve standards will have the backing of law and a clear regulatory regime, making it easier for compliance, legal, and audit teams to greenlight broader usage across financial products and services.

• Trusted settlement layer: USDC will be more confidently integrated across capital markets — from trading desks and collateral management to tokenized assets and embedded treasury services.

• Frictionless trading and funding: USDC enables instant access to capital for trading, margin, and collateralization without the delays of traditional funding rails. Institutions will be able to post, move, and settle assets in real-time across exchanges, custodians, and DeFi protocols, and use USDC as collateral on our portfolio margin platform.

• Crypto-as-a-Service at scale: Our infrastructure enables financial institutions to build products for their clients that take advantage of USDC. Our custody, financing, trading, staking, tokenization, and digital payment rail capabilities seamlessly integrate USDC by default.

With USDC, our partners earn rewards or rebates by holding USDC balances across the Coinbases suite of institutional products, including USDC used as collateral. 

What This Means for Businesses and Payment Service Providers

For businesses and the PSPs that serve them, USDC has always offered real-time settlement, low-cost payments, and access to borderless commerce. The GENIUS Act will put these capabilities on a stronger legal foundation, removing a key barrier to adoption.

• PSPs can go further: Payment platforms and merchant services will be able to confidently offer USDC-based payments, with reduced transaction fees, faster settlement, and global reach with the assurance of legal compliance.

• Instant access to funds: Small businesses won't have to wait days for traditional settlement cycles. USDC enables near-instant payouts, and PSPs can promote that benefit with confidence under federal oversight.

• Simplified global transactions: USDC enables SMBs to serve international customers without the complexity of FX or cross-border banking.

• Easy access to crypto-native tools: Our Crypto-as-a-Service infrastructure lets PSPs and SMB platforms offer USDC wallets, payments, 24/7 settlement solutions, and treasury management tools without needing deep blockchain expertise.

Our USDC rewards program increases the earning potential for small businesses and PSPs with rewards on USDC balances held in their accounts — turning stored value into working capital.

What This Means for Consumers

If you’re a retail customer of USDC — whether you’re using it to send to friends or family, earn rewards, or just hold digital dollars on Coinbase — this is great news. 

• Transparency and safety: In addition to USDC being backed, audited, and overseen by regulators, it will operate under federal law.

• Greater accessibility: With more legal certainty, expect wider adoption at checkout, for online transactions, and within your favorite financial apps.

• Peace of mind: The Genius Act will raise the industry baseline, giving consumers confidence that USDC remains a safe, regulated choice. 

Plus, when you hold your USDC on Coinbase you can earn up to 4.1% rewards, which is 10x the average savings rate.¹  Coinbase One subscribers can earn up to 4.5% rewards. 

Final Take

The passage of the GENIUS Act is more than just a policy win — it’s a foundational moment for the digital economy. Stablecoins have grown under a fragmented mix of state regulations, the GENIUS Act establishes a unified federal framework and clears the path for USDC and modern stablecoin solutions to scale globally. They will now be part of the regulated financial system.

For consumers, this means confidence. For institutions, it means opportunity.

And for everyone in between, it means that the next phase of digital finance — faster, cheaper, and more transparent — just got a major boost.

¹Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and may vary by region. Please check the latest list of eligible regions here. Customers will be able to see the latest applicable rates directly within their accounts.