INSIGHT

How the newly signed GENIUS Act cryptocurrency law will impact your business 

July 18, 2025

Industries: Blockchain & Digital Assets

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The cryptocurrency industry just achieved a historic milestone. After years of regulatory uncertainty, Congress passed the first major federal legislation governing digital assets, specifically for payment stablecoins, and President Trump signed the GENIUS Act into law on Friday, July 18. This represents a seismic shift in how these cryptocurrencies will be regulated in the United States. 

If your business deals with digital assets, accepts cryptocurrency payments, or has been considering blockchain technology, these new rules may directly affect your operations. Understanding what’s changed—and what’s still evolving—is crucial for making informed decisions about your crypto strategy. 

What the GENIUS Act means for stablecoins 

The newly signed GENIUS Act establishes the first comprehensive federal framework for payment stablecoins, those digital currencies designed to maintain a stable $1 value through 1:1 fiat reserve backing. This legislation provides much-needed clarity for businesses that have been hesitant to adopt these payment methods due to regulatory ambiguity. 

Key provisions affecting your business: 

Regulatory clarity: Payment stablecoins as defined in the GENIUS Act now have official government recognition and are explicitly defined as not securities or commodities, eliminating regulatory uncertainty and creating consistent consumer rights across jurisdictions. 

Enhanced consumer protection: New safeguards include requirements such as 1:1 reserve backing with cash and Treasury securities, monthly public disclosures of reserve holdings, independent examinations by registered accounting firms, and priority claims for stablecoin holders in insolvency proceedings, significantly increasing customer confidence in digital payments. 

Operational standards: Issuers face restricted activities limited to issuing, redeeming, and managing reserve assets, with regulators establishing tailored capital standards, liquidity protocols, custody and segregation rules, and mandatory monthly reporting with CEO/CFO certifications. 

Mandatory redemption rights: Retail holders gain same-day redemption rights with published redemption policies, improving liquidity confidence and ensuring reliable access to funds. 

Understanding the new regulatory framework 

The GENIUS Act creates a dual-track system that gives stablecoin issuers flexibility while maintaining strict standards. This approach balances innovation with consumer protection in ways that will affect how you interact with digital payment providers. 

The framework includes: 

Federal licensing pathway: Non-bank issuers can obtain federal licenses, providing a clear regulatory path for new market entrants and potentially increasing competition in the stablecoin space. 

State charter option:  Companies can also operate under state money-transmitter or trust-company charters (such as NYDFS state rules) that meet minimum national standards, but only if they remain under $10 billion of outstanding stablecoin issued, offering flexibility for smaller established financial institutions. 

Strict reserve requirements: The 1-for-1 reserve mandate limited to cash, Treasury bills, and overnight repo backed by Treasuries creates stronger backing for stablecoins than many current arrangements. 

Enhanced transparency: Monthly public attestation and annual independent audits will provide you with better visibility into the financial health of stablecoin issuers you work with. 

Operational restrictions: Stablecoin issuers must operate as distinct legal entities with limited activities restricted to minting, redemption, reserve management, and custody. They cannot commingle operations with other businesses, tie stablecoin services to additional paid products, restrict customers from using competitors, or pay interest or yield on stablecoins. 

Naming and marketing restrictions: Permitted payment stablecoin issuers are prohibited from using terms related to the US government in their names and marketing to prevent insinuating the stablecoin is issued or guaranteed by the US government. 

Redemption policy disclosure: Permitted payment stablecoin issuers must publicly disclose policies and procedures around customer redemptions. 

Implementation timeline and compliance requirements 

 Understanding the rollout schedule is critical for planning your business response to these changes. The implementation timeline affects when new requirements take effect and how quickly you need to adapt your operations. Critical dates to remember: 

• July 18, 2025: GENIUS Act signed into law by President Trump 
• Effective date: The Act takes effect on the earlier of 18 months after enactment (January 18, 2027) or 120 days after the primary Federal payment stablecoin regulators issue final regulations 
• Regulatory timeline: Primary Federal payment stablecoin regulators (Treasury, Federal Reserve, OCC, and FDIC) will issue implementing regulations. This timeline gives businesses up to 18 months to fully adapt to the new regulatory environment, but preparation should begin immediately considering that regulators are required to propose rules within 180 days of enactment (by mid-January 2026). 

Tax and accounting implications you should consider 

These regulatory changes will have significant tax and accounting consequences for businesses involved in cryptocurrency transactions. The clearer regulatory framework may impact how digital asset transactions are classified and reported. 

Areas requiring immediate attention: 

• Audit and attestation demands: The independent-audit mandate for reserve assets requires monthly examinations by a registered public accounting firm (PCAOB registered firms), with CEO and CFO certification of examination reports. Additionally, permitted payment stablecoin issuers with more than $50 billion in outstanding stablecoins must conduct annual GAAP financial statement audits and publicly post those financial statements, creating new assurance engagement opportunities and compliance requirements for accounting teams. 

• Cross-border considerations: U.S.-dollar stablecoin projects headquartered abroad but serving U.S. users will come within the Act’s extraterritorial reach once rules are finalized. 

• Financial statement impact: Enhanced disclosure requirements and reserve standards may require updates to existing financial reporting processes. 

The intersection of new regulations and existing tax obligations creates complexity that requires careful planning. Businesses should review their current crypto activities and assess how these changes affect their tax and accounting position. 

Preparing for enhanced governance requirements 

The new regulatory framework will likely drive significant changes in how stablecoin issuers operate, which affects the entire ecosystem of businesses that rely on these digital assets. 

Expected governance changes: 

• Board-level oversight: Risk committees and enhanced internal-control frameworks—mirroring those of large payment companies—are expected to become standard under forthcoming Fed regulations. 

• Compliance infrastructure: Companies will need to map current reserve holdings and disclosure practices against the Act’s hard requirements. 

• AML/KYC enhancement: Explicit application of the Bank Secrecy Act, FinCEN reporting, and other anti-money laundering rules to all covered issuers will strengthen compliance requirements. 

These changes should improve the overall stability and reliability of the stablecoin ecosystem, benefiting businesses that depend on these payment methods. 

Planning for ongoing regulatory evolution 

While this legislation represents major progress, the regulatory landscape remains fluid. The fate of additional crypto bills that just passed the House and are returning to the Senate is uncertain, and implementation of current laws will take time. 

Steps to take now: 

Audit current practices: Review your existing crypto activities against new regulatory requirements 

Update compliance procedures: Modify internal processes to align with federal standards 

Monitor developments: Stay informed about additional legislation and regulatory guidance 

Assess opportunities: Consider how regulatory clarity might enable new business strategies 

Engage professional advisors: The complexity of these changes warrants professional guidance on implementation 

Preparing your business for what’s next 

The signing of federal cryptocurrency legislation marks the beginning of a new era for digital assets in business. Companies that proactively adapt to these changes will be better positioned to capitalize on opportunities while managing compliance risks. 

This regulatory evolution affects more than just crypto-focused businesses. Companies across industries are exploring blockchain technology, digital payments, and tokenization strategies. Understanding how these new rules impact your specific situation is essential for strategic planning. 

The key is developing a comprehensive approach that addresses both current requirements and anticipated future developments. This includes evaluating your existing crypto activities, identifying new opportunities, and implementing robust compliance frameworks. 

With the GENIUS Act now law and additional legislation working through Congress, the digital asset landscape is transforming rapidly. The businesses that succeed will be those that embrace these changes while maintaining strong risk management and compliance practices. 

Ready to navigate the changing cryptocurrency landscape?

With our extensive experience in PCAOB-registered audit and attestation services, our team can help you understand how new federal regulations affect your business, meet monthly examination requirements, and develop strategies that align with evolving compliance demands. Contact BPM today to discuss your digital asset planning needs and position your company for success in this new regulatory environment.