Discover how Circle and USDC already meet standards set by the GENIUS Act and the path forward to full regulatory alignment.
Circle’s GENIUS Act Readiness and Path Forward
The digital asset landscape is rapidly evolving, and with it, the need for clear and comprehensive regulatory frameworks. The recent signing of the GENIUS Act is a historic milestone for payment stablecoins in the US, establishing a federal payments framework that provides much-needed regulatory certainty and consumer protections. At Circle, we've long advocated for responsible innovation and robust regulation. Consequently, USDC, sets a high benchmark for payment stablecoin standards codified in this landmark legislation.
The GENIUS Act, designed to foster innovation while safeguarding financial stability and protecting users, introduces several key provisions. Below is a high level overview of how Circle is already operating in alignment with these principles and the path forward to full GENIUS Act compliance:
Federal Licensing and Oversight: The GENIUS Act pioneers the first-ever federal licensing regime for payment stablecoin issuers — an innovative, bank-grade framework that cements US leadership in global digital payments. By creating a federal charter and supervisory structure under the Office of the Comptroller of the Currency (OCC) and federal banking regulators, GENIUS sets a “gold standard” for safety, soundness, and transparency in the stablecoin market. Circle has long championed this approach: we already operate under state money transmitter licenses nationwide, were the first New York BitLicense holder, and are regulated under national payments and stablecoin regimes globally. Our application to establish First National Digital Currency Bank, N.A. directly reflects our commitment to this groundbreaking federal framework and to upholding the highest standards set by US banking regulators, perfectly embodying the spirit of the GENIUS Act.
State-Federal Coordination: The GENIUS Act also preserves pathways for state-chartered entities to issue stablecoins provided that the state regimes meet the high federal oversight and interoperability requirements. Importantly, however, payment stablecoin issuers must transition to federal oversight once their circulation reaches $10 billion, an important safeguard for macro-financial stability. Circle's current operation across a network of state licenses coupled with our support for a federal charter exemplifies this coordinated approach. We believe in a robust regulatory ecosystem that leverages the strength of states as the laboratories for innovation with the global regulatory and standard-setting leadership of federal regulators fosters diversity in innovation while ensuring a consistent federal standard.
Reserves and Transparency: A cornerstone of the GENIUS Act is the mandate for 1:1 backing with high-quality liquid assets, such as cash and short-term US Treasuries, along with public disclosures and attestations. This is an area where Circle has consistently set the industry standard. USDC is 100% backed by a combination of cash and highly liquid cash equivalents, primarily short-duration US Treasury bills. Since 2018 Circle has published monthly attestations by an independent accounting firm detailing the exact composition of our reserves, providing unparalleled transparency and assurance to USDC holders. Our reserves are also segregated and held for the benefit of our customers, offering a crucial layer of protection that will be enshrined in the GENIUS Act.
Moreover, the GENIUS Act preserves the distinction between banking and stablecoin issuance, requiring banks to establish standalone subsidiaries (complete with all attending capital and risk management infrastructure), and prohibiting all issuers from lending or offering yield or interest on their stablecoins, distinguishing them from traditional bank deposits and securities.
Consumer Protections: The GENIUS Act establishes a landmark federal framework that comprehensively codifies stablecoin redemption rights, custody protocols, and cybersecurity obligations to set a global “gold standard” for digital payments. Under its redemption rights provisions, all payment stablecoins must be backed 1:1 with high-quality liquid assets, primarily cash and short-term US Treasuries, and provide transparent, efficient mechanisms for holders to redeem tokens for fiat on demand. Circle already meets these requirements as detailed above.
The GENIUS Act’s marketing controls prohibit misleading or opaque promotions, mandate clear, prominent disclosures, and stipulate that only digital assets meeting the strict requirements can call themselves “payment stablecoins.” Circle’s Marketing and Communications teams are already configured to work closely with our Legal and Policy teams to adhere to this standard.
In parallel, the GENIUS Act mandates that reserve assets be held by qualified custodians in fully segregated accounts that are not subject to a bankruptcy estate should an issuer become insolvent. Circle holds reserve assets in deposits with regulated banks and eligible securities with one of the world’s largest and most respected custodians of US Treasuries.
The GENIUS Act also layers on rigorous cybersecurity requirements, which for Circle are business-as-usual practices that include periodic risk assessments, secure coding practices, strong encryption, multi-factor authentication, incident response planning, and independent audits and penetration testing, alongside information-sharing obligations to strengthen collective resilience.
Together, these measures underscore how the GENIUS Act — and Circle’s leadership — forge the first truly global standard for stablecoins as payments instruments, elevating US leadership in global digital finance.
AML and Sanctions Compliance: All payment stablecoin issuers not only must comply with law enforcement orders but must adhere to the strict anti-money laundering (AML) and sanctions compliance requirements faced by US financial institutions. Circle has a long-standing and robust AML and sanctions compliance program in place. We adhere to Bank Secrecy Act (BSA) obligations, including customer due diligence, transaction monitoring, and sanctions screening, and have an industry leading financial crimes compliance program. Our dedicated compliance team works diligently to meet applicable regulatory requirements, actively combating illicit finance within the digital asset ecosystem and deploying products that support compliance with the wider blockchain space.
US Leadership: By reinforcing the role of the US dollar in digital finance, the GENIUS Act bolsters America’s global leadership in writing strong, versatile rules for global stablecoin issuers. USDC, as a dollar-denominated stablecoin, inherently supports the adoption of regulated dollar assets in the digital economy. Our mission to enable seamless, global stablecoin payments directly supports the US dollar's continued role in global trade and settlement and the evolving financial landscape.
Global Harmonization: From a global perspective, the framework raises the bar by establishing a clear mandate for federal regulators to work with their counterparts and develop a harmonized global framework for stablecoin oversight rooted in the core requirements of the GENIUS Act. Federal regulators can establish bilateral or reciprocal agreements with foreign counterparts to ensure that there are equivalent regulatory regimes for foreign issuers and shared supervisory standards to hardwire the trust, utility, and ubiquity of globally regulated stablecoins such as USDC across borders. It also allows foreign issued tokens to circulate but only if they comply with lawful orders, meet the standards in the Act, enter a reciprocal arrangement with an approved foreign government, and are registered with the OCC.
Next steps towards implementing the GENIUS Act
Passage of the GENIUS Act kicks off an 18-month “rule writing” period during which federal authorities will craft the regulations that implement the criteria of the GENIUS Act. Circle already operates with high standards of regulatory compliance, and we look forward to supporting federal regulators throughout this process. We remain fully committed to regulation under the GENIUS Act and will continue to demonstrate our commitment through our publicly communicated next steps — federal trust charter approval, continued collaboration with regulators and continued enhancement of USDC infrastructure.
And, while the GENIUS Act focuses on the US, Circle is a global company. Our efforts to harmonize global frameworks and jurisdictional regimes demonstrate our commitment to a globally consistent approach to stablecoin regulation, so that USDC remains a trusted and compliant payment stablecoin worldwide.
The GENIUS Act represents a pivotal moment for stablecoins. At Circle, we believe that responsible innovation thrives within clear regulatory boundaries. We are proud to be at the forefront of this evolution, demonstrating both through our philosophical approach as well as our actions that USDC is not just ready for the future of digital finance, but is actively helping to build it in full compliance with the highest standards of the law.
Contact us to learn more about our GENIUS Act readiness and to discuss how to partner with Circle to execute a robust and compliant stablecoin strategy.
