GENIUS Act

The GENIUS Act (S.1582) is the US law that regulates payment stablecoins. It was signed on 18 July 2025 and takes effect on the earlier of 18 January 2027 or 120 days after regulators publish final implementing rules.

Two of its requirements translate directly into smart contract design. Sec. 4(a)(1) and 4(a)(3) require reserves of at least 1:1 and a monthly report on them, examined by an accounting firm. A contract that cannot see its reserves can mint past them, which is why issuers check supply against a proof of reserve feed. Sec. 4(a)(6)(B) requires the issuer to have "the technological capability to comply, and will comply, with the terms of any lawful order". In practice, that means a contract able to freeze, seize and burn.

Those compliance powers are also the ones an attacker wants. A seize function one key can point anywhere, or an upgrade path one key controls, turns a compliance feature into a withdrawal of every balance. Holding them behind separate roles, a multisig and a timelock is what keeps them safe. This entry describes the law only as it shapes code; it is not legal advice.