By: Jim Vallee, Greg Blase, and Andrew Glass of Nixon Peabody.

Digital payments entered a new, regulated era in the United States with the July 2025 passage of the GENIUS Act.

The GENIUS Act will create a federal/state framework for the issuance and regulation of payment stablecoins, which are poised to increase speed, lower costs, and add transparency to payments transactions. The Act will provide increased programmability of payments while adding safeguards around money-laundering, terrorism, sanctions evasion, and other criminal activity that relies on access to payment networks. For leaders in financial services and technology, this is an operational shift with near‑term implications for treasury, merchant acceptance, and cross‑border flows.

Payment stablecoins are digital representations of value, maintained on the blockchain, tied on a 1-to-1 basis with the US dollar, and backed by reserves held in stable assets such as treasury bonds. Globally, stablecoins have already achieved more than $300 billion in market capitalization in 2025 with daily transaction volumes averaging between $20 and $30 billion. Businesses use these tokens for cross‑border payments and remittances, B2B settlement, treasury and cash management, and e‑commerce transactions. The core advantages are compelling: near‑instant, 24/7 settlement; lower interchange and FX costs; programmable disbursements; and auditable, on‑chain transparency. With the GENIUS Act, Congress seeks to make the United States a central player in this burgeoning marketplace.

The Act restricts issuance of payment stablecoins in the United States to “permitted payment stablecoin issuers,” which may be subsidiaries of insured depository institutions, non‑bank entities approved by the federal OCC, and state‑qualified entities that issue less than $10 billion in payment stablecoins. Issuers will be required to publish monthly reserve disclosures, maintain strict reserve segregation, comply with the Bank Secrecy Act, AML, and sanctions obligations, and refrain from paying yield solely for the issuance of a token. Issuers’ core activities are limited to issuance and redemption, reserve management, and custodial services. The Act also imposes licensing and regulatory obligations on digital asset service providers that handle and transmit payment stablecoins for third parties. Entities will likely be able to apply for federal approval as early as November 2026, and as of July 18, 2028, it will be unlawful to issue a payment stablecoin in the United States except under the auspices of the GENIUS Act.

The introduction of payment stablecoins promises the potential for immediate efficiency gains. Adoption of payment stablecoins is therefore expected to accelerate across several fronts. Card networks and merchant acquirers, as well as crypto exchanges and new entrants to the market, are poised to build out infrastructure for real‑time B2B payments, consumer transactions, and programmable disbursements for payroll, insurance, and government aid. Online wallets can enable consumers to conduct peer‑to‑peer transfers and e‑commerce checkout with lower friction. At the same time, rulemaking timelines, integration with legacy systems, wallet and custody choices, and interoperability across state and foreign regimes are all hurdles that remain to be cleared.

Business leaders should treat this as a readiness exercise. Map licensing pathways and counterparties, analyze reserve and redemption mechanics, and plan integrations with treasury systems and merchant platforms. Evaluate cross‑border corridors where 24/7 settlement and lower FX costs deliver measurable ROI. Ensure compliance programs are calibrated for AML, sanctions, and disclosure obligations. The GENIUS Act positions payment stablecoins as a regulated, dollar‑denominated settlement asset bridging legacy finance and on‑chain value transfer. Those who build early competence will be better placed to capture efficiency, manage risk, and influence emerging standards in digital payments.