If your business accepts stablecoins, holds them, or is thinking about building a product on them, you have probably heard about the GENIUS Act. It is a federal law that sets up a framework for payment stablecoins. Below are answers to questions business owners commonly ask. The rules and the regulations that carry them out can change, so confirm the current status before you act.
What is the GENIUS Act in plain terms?
The GENIUS Act is a federal law signed in July 2025. It creates rules for "payment stablecoins," which are digital tokens meant to be used for payments and redeemable for a fixed amount of money, usually one U.S. dollar. The law focuses on who may issue these tokens, what backs them, and what issuers must tell the public.
Much of the law relies on federal and state regulators to fill in the details. Regulators are still finishing the details. The OCC issued its final rule in October 2026, effective January 18, 2027, while other agencies' rules and the anti-money-laundering rules were still pending when this was written.
Does the law apply to my business if I only accept stablecoins as payment?
The Act's main requirements fall on issuers of stablecoins and on certain companies that serve the market. A business that simply accepts a stablecoin for goods or services is generally not an issuer. That does not mean nothing applies to you. Other rules may still matter, including:
- Tax reporting and recordkeeping for digital asset payments
- Anti-money-laundering and sanctions rules, if your activity goes beyond ordinary sales
- State rules on money transmission, if you move funds for others
- Your contracts with customers, payment processors, and lenders
Whether any of these reach you depends on what your business actually does.
What does the Act require of companies that issue stablecoins?
In general terms, the law lets only "permitted" issuers offer payment stablecoins in the United States. It also sets requirements for those issuers. Broadly, they include:
- Holding reserves that back the tokens one-for-one, in cash-like assets or very short-term government securities
- Publicly disclosing the makeup of those reserves on a regular basis
- Honoring redemption requests
- Following anti-money-laundering and sanctions programs
- Avoiding claims that the tokens are backed by the government or insured like bank deposits
The Act also gives holders certain protections if an issuer fails. The details depend on the type of issuer and the regulator involved.
Can I earn interest or rewards on stablecoins I hold?
The Act generally bars issuers from paying interest or yield simply for holding a payment stablecoin. How that rule applies to rewards offered by exchanges, apps, or other third parties is a more complicated question, and it has drawn attention from regulators and the industry. If your business plans to offer rewards or a return tied to stablecoin balances, have the structure reviewed carefully before launch.
Are stablecoins covered by the securities laws now?
The Act treats payment stablecoins that meet its definition differently from securities and commodities. That is one reason many businesses welcomed it. But the definition is specific. A token that promises a return, or that does not fit the Act's definition of a payment stablecoin, may be analyzed under other laws. Calling something a stablecoin does not settle how the law treats it.
I want to build a product on stablecoins. What should I think about first?
Start with what role your business plays. Are you issuing a token, holding customer funds, moving money for others, or just using a stablecoin as a payment rail? Each role can trigger different obligations. Some questions to ask early:
- Which stablecoin will I use, and is its issuer permitted under the federal framework or a state system that qualifies under it?
- Will I ever hold or transmit funds that belong to customers?
- What happens to my customers if the issuer, a wallet provider, or a partner has a problem?
- What do my terms of service say about refunds, errors, and disputes?
The Act also contemplates a transition period for certain platforms that deal with stablecoins from issuers who are not permitted. Timing details are worth confirming, since they may affect which tokens you can offer.
What if AI agents are making payments for me or for my customers?
The GENIUS Act does not set specific rules for AI agents. Your obligations come from the same sources as before: contract law, agency principles, consumer protection, and the payments and anti-money-laundering rules described above. That is why the rules you set for an agent matter. Consider addressing these points in writing:
- What the agent is authorized to buy or accept, and the dollar limits
- Which wallets, accounts, and counterparties it may use
- When a human must approve a transaction
- Who is responsible if the agent makes a mistake or is manipulated
- How logs are kept so you can review what happened
Clear written terms between you, your vendors, and your customers can reduce confusion later, but no document can eliminate risk.
Next steps
If you are weighing whether to accept, hold, issue, or build on stablecoins, it helps to map out what your business does before choosing a path. MT Legal can talk through your situation and the questions to raise with regulators, tax advisors, and your business partners. Because this area is changing, please treat this post as a starting point and not a final answer.
Learn more about Stablecoins & Agentic Commerce
This article is general information about Tennessee and federal law, not legal advice for your situation. Reading it does not create an attorney-client relationship.