Document Type
Article
Publication Date
2026
Abstract
The 2022 TerraUSD collapse, erasing $50 billion and exposing unregulated stablecoin risks in a $260 billion market, led Congress to enact the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (GENIUS Act). This statute exempts compliant payment stablecoins from the Securities Act's "security" definition, enforces strict reserve requirements, and creates a tailored private right of action-shifting authority from ex post Rule lob-5 litigation to ex ante prudential oversight while maintaining market discipline via calibrated remedies.
As the first doctrinal analysis of this landmark legislation, this Article contends GENIUS resolves regulatory fragmentation, optimizes risk allocation under uncertainty, and bolsters U.S. global leadership in digital assets. Yet it reveals latent tensions, including potential jurisdictional overlaps and diluted antifraud measures, that require rapid rulemaking and interagency coordination to avert persistent issues. Moreover, GENIUS does not apply to state-issued stablecoins, creating a different regime for private issues and state actirs. In fintech's dynamic era, GENIUS could solidify stablecoins as digital payment pillars, but demands vigilant execution to balance innovation and stability without repeating past failures.
The Article examines GENIUS's structure, doctrinal/policy impacts, and implementation roadmap because, if implemented well, it cements stablecoins' future-else, it risks exacerbating the fragmentation it targets.
Recommended Citation
Seth C. Oranburg, The GENIUS Dilemma: Innovation versus Antifraud in Stablecoin Regulation, 9 Stan. J. Blockchain L. & Pol'y 99 (2026).
