Companies Plan Stablecoins Under New Law, but Hurdles Remain

Photo: AP

In July 2025, the United States government passed a new law called the GENIUS Act. This law stands for the "Guiding and Establishing National Innovation for U.S. Stablecoins Act." It is the first law in the U.S. designed to regulate stablecoins.

Stablecoins are a type of digital money that is tied to the value of the U.S. dollar. The goal of this law is to make digital payments faster, safer, and more efficient.

Since the GENIUS Act became law, several large companies like Bank of America, Citigroup, Walmart, and Amazon have shown interest in creating their own stablecoins.

These companies believe stablecoins could help them with many things, such as making it easier for customers to pay and improving the way money moves across borders within their businesses. But, experts warn that even with the new law, there are still many difficulties these companies will face.

What Are Stablecoins?
Stablecoins are a kind of cryptocurrency, but unlike other cryptocurrencies like Bitcoin or Ethereum, which can change in value quickly, stablecoins are made to keep a steady value. This is because they are linked, or “pegged,” to something stable, usually the U.S. dollar. This stability makes stablecoins more useful for everyday spending and business transactions.

• There are three main types of stablecoins:
• Fiat-collateralized stablecoins: These are backed by real money, like U.S. dollars, kept in reserve.
• Crypto-collateralized stablecoins: These use other cryptocurrencies as backup.
• Algorithmic stablecoins: These use computer programs to control how many coins exist to keep their value steady.
• The GENIUS Act focuses mainly on the first type — stablecoins backed by real U.S. dollars or similar low-risk assets.

Important Parts of the GENIUS Act
The GENIUS Act sets up clear rules for companies that want to create stablecoins. Some of the main rules are:

Reserve Requirements: Companies must keep enough money in reserve to match the amount of stablecoins they have issued. This means every stablecoin should be backed by an equal amount of real money.

Audits and Reports: Companies have to have monthly audits by independent accountants. They must also publish reports showing they have enough money to back their stablecoins.

Licensing: Only companies that get special licenses from government regulators, like the U.S. Office of the Comptroller of the Currency or state regulators, can issue stablecoins.

Compliance: Companies must follow laws that stop illegal money activities, like money laundering. This includes checking the identity of customers, known as KYC (know-your-customer) rules.

These rules are meant to protect customers, make the market fair, and keep the system honest.

Challenges Ahead
Even with these clear rules, experts say companies will still face many challenges:

Technical and Strategic Choices: Companies need to decide how their stablecoins will be used. Will they be for customers to buy things? Or for companies to pay each other across borders? They must also choose whether to build new stablecoins or work with existing ones like USDC.

Compliance Problems: Non-bank companies must meet strict rules to prevent fraud and money laundering. Banks might find this easier because they already follow many of these rules. But banks have other problems like meeting capital requirements and managing blockchain technology properly.

Choosing Blockchain: Stablecoins are built on blockchain technology. Companies must decide if they want to use a public blockchain, which anyone can see but can be slower, or a private blockchain, which is faster but less open.

Regulatory Uncertainty: The GENIUS Act is just the first step. It may take years for all the rules to be finalized. Agencies like the Treasury Department and the OCC will create more rules to fill in the gaps.

Because of these issues, launching stablecoins is not easy, even with the new law supporting them.

How Other Countries Are Handling Stablecoins

• The U.S. is not alone in trying to regulate stablecoins. Other countries have created their own laws and rules:
• European Union: The EU has a law called MiCAR that requires stablecoin issuers to meet reserve and governance rules.
• Hong Kong: Hong Kong requires companies to get licenses and follow anti-money laundering laws to issue stablecoins.
• Singapore: Singapore’s central bank demands that stablecoin issuers hold reserve assets matching the currency their stablecoin is pegged to.
• These examples show that the stablecoin market is global. Countries want to make sure stablecoins are safe and well-regulated everywhere.

What This Means for the Future
The GENIUS Act is an important step to bring stablecoins into the mainstream financial system in the United States. The law aims to encourage new technology and protect consumers at the same time. Big companies like Bank of America, Citigroup, Walmart, and Amazon are interested in stablecoins because they see many possible benefits.

But, to succeed, these companies must handle technical difficulties, follow strict regulations, and work closely with government officials. If they do this well, stablecoins could change how we pay for things and transfer money around the world.

This new law could help build a safer, faster, and more reliable way to use digital money — making payments easier for everyone. But the road ahead will need careful planning, cooperation, and patience.