‘GENIUS Act has faltered in implementation,’ former SEC counsel says

U.S. regulators have missed the GENIUS Act’s one-year rulemaking deadline, leaving the federal stablecoin framework awaiting final implementation even as industry participants say the law has already accelerated institutional adoption.

According to federal rulemaking records and regulatory proposals reviewed after the July 18 deadline, none of the key agencies charged with implementing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act have completed their final rules despite Congress requiring them to do so within one year of the law’s enactment.

President Donald Trump signed the GENIUS Act into law on July 18, 2025, creating the first standalone federal framework for payment stablecoins in the United States. 

The legislation established reserve, redemption, disclosure, licensing and supervisory requirements for issuers while directing the Office of the Comptroller of the Currency, Federal Reserve, Federal Deposit Insurance Corporation, National Credit Union Administration, Treasury Department, and state regulators to complete implementing regulations through the notice-and-comment process within one year.

Although the deadline has now passed, the statute does not say that missing it delays the law’s effective date or suspends its requirements. Instead, much of the framework remains defined by the legislation itself while agencies continue working on the operational details that will govern compliance and supervision.

For companies building around stablecoins, however, the regulatory delay has become one of the biggest talking points one year after the law’s passage.

Legal clarity has improved but implementation remains unfinished

Speaking to crypto.news, Diogo Cassinelli, sales and partnerships manager at Trace Finance, said the anniversary serves as an opportunity to evaluate both the progress made under the GENIUS Act and the issues that remain unresolved.

“This week marks one year since the GENIUS Act was signed into law, and the anniversary is a useful checkpoint to reflect on how far the industry has come, and where we still need to go,” Cassinelli said.

While he described the creation of a federal framework for stablecoin issuance as “an incredible milestone,” he argued that operational questions extending beyond issuance continue to slow adoption.

According to Cassinelli, the unresolved issue is how stablecoins move through the traditional banking system and who ultimately bears responsibility for those transactions. He said this gap is one reason lawmakers and industry participants are paying close attention to the proposed Digital Asset Market Clarity Act, or CLARITY Act, which is expected to establish a wider market structure framework for digital assets.

Cassinelli said regulatory uncertainty has not stopped fintech firms from building cross-border payment products, but it has made expansion slower and more expensive because every banking relationship requires institutions to conduct their own compliance assessment instead of relying on a common federal standard.

“The process alone adds months to timelines that should take weeks,” he said, adding that those costs increase whenever companies enter new markets or onboard new banking partners.

Looking ahead, Cassinelli said passage of the CLARITY Act would allow banks and payment providers to approve stablecoin-related services more quickly because compliance expectations would already be established at the federal level.

“A definitive framework means banks and payment providers can say yes faster,” he said.

“CLARITY gives a definitive path for large institutions to move money with stablecoins, while also giving startups a clear map to build for these institutions.”

Agencies continue working through proposed rules

Several of the largest implementing rules remain at the proposal stage despite the statutory deadline.

The OCC previously proposed standards covering reserve assets, capital, liquidity, custody, reporting and risk management for issuers under its supervision. The FDIC later released its own proposal addressing prudential standards, reserve requirements, redemption, custody, capital treatment and the handling of tokenized deposits held by supervised institutions.

Meanwhile, the NCUA published separate licensing and operational proposals, with comments on its latest package closing only one day before the July 18 deadline, making completion of the rule impossible through the normal rulemaking process.

Treasury has yet to finalize guidance explaining when state stablecoin frameworks qualify as “substantially similar” to the federal regime, an important decision because issuers with no more than $10 billion in outstanding stablecoins may remain under state supervision if their regulatory framework receives Treasury certification.

At the same time, the Federal Reserve, FinCEN, OCC, FDIC and NCUA have jointly proposed customer identification requirements for primary-market participants, while additional anti-money laundering and sanctions proposals from FinCEN and the Office of Foreign Assets Control also remain under review.

Because several comment periods extend into August, at least part of the regulatory framework cannot be finalized before the one-year deadline.

Regulatory delays haven’t slowed industry growth

For investors, the first year of the GENIUS Act has still produced measurable changes across the stablecoin market.

Alex Witt, general partner at Verda Ventures, told crypto.news the legislation has already accomplished one of its main objectives by encouraging institutional participation.

“A year in, the GENIUS Act has clearly succeeded as a legitimization signal,” Witt said.

He pointed to stablecoin market capitalization exceeding $300 billion, transaction volumes increasing roughly fourfold, institutional entrants including Fidelity and Ripple obtaining charters, and Tether launching its USA₮ product through Anchorage as evidence that adoption has continued despite unfinished regulations.

At the same time, Witt argued that implementation has “badly lagged” because six federal agencies were expected to finalize rules by July 18 but have yet to complete any of them.

According to Witt, the absence of final regulations means the industry continues operating under legacy disclosure practices while charter approvals and Federal Reserve access decisions are occurring before the complete regulatory framework is in place.

“The unresolved pieces, the leaky yield ban pushing capital offshore and the January 2027 backstop effective date, mean the Act’s real test is still the next six months, not the year behind it,” he said.

Offering more insights on the matter, Ashley Ebersole, co-founder and chief legal officer of tx and a former senior counsel at the U.S. Securities and Exchange Commission, drew a similar distinction between the legislation itself and its implementation.

“One year post-enactment, it’s fair to say the GENIUS Act delivered a framework that established structural mandates, but has faltered in implementation,” Ebersole told crypto.news.

According to Ebersole, codifying payment stablecoins into federal law gave institutions the confidence needed to increase participation. She said stablecoin supply has expanded by approximately $55 billion since the law took effect, while tokenized U.S. Treasury assets have grown from about $3.9 billion to nearly $9 billion. She added that six separate real-world asset categories have now exceeded $1 billion in value, attributing part of that growth to the regulatory certainty created by the Act.

Ebersole nevertheless described the rulemaking delays as the legislation’s biggest execution challenge. She noted that agencies missed the one-year deadline despite Congress requiring implementation within that period, leaving eight major proposals still awaiting completion.

According to Ebersole, many institutions aligned their compliance planning with the original legislative timeline, making the administrative delays a setback even though the law contains a January 18, 2027, statutory backstop for implementation.

She also said stablecoins have become an essential settlement layer for tokenized assets, arguing that the legislation has reduced uncertainty surrounding long-term institutional blockchain infrastructure.

Ebersole identified the prohibition on issuer-paid yield as one of the biggest questions entering the framework’s second year.

“A definitive question for 2027 concerns the yield prohibition,” she said, explaining that decentralized finance protocols and wrapped products may continue offering interest-like returns through other mechanisms even though the GENIUS Act and Europe’s Markets in Crypto-Assets (MiCA) framework prohibit issuers from paying yield directly to token holders.

Jay File, chief executive and chief financial officer of Nasdaq-listed Lite Strategy, also pointed to the international regulatory environment rather than the delayed rulemaking alone.

“The GENIUS Act is the first serious federal framework for stablecoins,” File told crypto.news. 

“Paired with MiCA’s enforcement baseline in Europe, we’re approaching a moment where the regulatory risk that caused institutional hesitation is finally being removed.”

File added that regulatory developments across multiple jurisdictions are moving digital assets toward “legitimacy, clarity, and institutional access,” which he described as beneficial for the industry.

Attention is now beginning to move toward the proposed CLARITY Act, which lawmakers continue negotiating in Congress. While discussions over ethics provisions and other outstanding issues remain unresolved, supporters, including Rep. Bryan Steil, have argued that the legislation would establish clearer rules for the wider digital asset market after the GENIUS Act created the first federal framework for payment stablecoins.