The GENIUS Act represents a watershed moment for the payments industry. After years of regulatory uncertainty that has stifled innovation and left payment service providers operating in a gray zone, Congress is finally poised to provide the clarity we've desperately needed around stablecoins.

But make no mistake — while GENIUS is a crucial first step, it's far from the finish line. Payment professionals who think this bill solves all our stablecoin challenges are setting themselves up for disappointment.

Let's start with what GENIUS gets right. The bill tackles the fundamental question that has paralyzed our industry: what exactly is a stablecoin, and who gets to regulate it? By forcing every dollar token into cash, or sub-90-day Treasury bills, GENIUS creates the reliable collateral base we need. 

The Treasury Borrowing Advisory Committee projects that a $2 trillion stablecoin float could absorb roughly $1.5 trillion in Treasury bills by 2028 — that's about 9% of outstanding supply. For payments providers, this means the tokens we're building on will finally have the backing to match their promises.

More importantly, GENIUS ends the destructive turf war between the Federal Reserve and the Securities and Exchange Commission that has frozen product development for years. By routing any issuer with $10 billion or more through a bank-style charter, the bill provides regulatory clarity that lets us actually plan for the future instead of waiting for enforcement actions to define the rules. The consumer protections matter too. Statutory redemption rights and Public Company Accounting Oversight Board-audited reserves put stablecoins on the same legal footing as money-market funds. That's not just good for consumers — it's essential for payment service providers that need reliable settlement rails.

Here's where payments leaders need to pay attention: GENIUS leaves some significant holes that could bite us later. Bank funding stress is real. The Fed's April 2025 Financial Stability Report warns that token migration can drain the cheapest deposits from regional lenders — exactly the banks many of us rely on for banking relationships. 

Also, we're still flying blind on collateral. Remember USDC's March 2023 de-peg? Traders had no real-time visibility into Circle's Silicon Valley Bank exposure until it was too late. GENIUS doesn't mandate daily reserve transparency, which means the next stress episode could replay the same information vacuum that nearly broke confidence in the entire sector. 

Congress and regulators need to move quickly on follow-up measures. Daily reserve transparency should be non-negotiable. Mandate issuers to post machine-readable files — CUSIP, maturity, custodian, encumbrances — on an FSOC dashboard. Paired with publicly visible token supply, this lets markets reconcile liabilities and assets in real time and short-circuits rumor-driven runs. We also need an outcome-based innovation lane that replaces GENIUS's vague Treasury "study" with a living rule set that lets novel designs launch inside a supervised framework once they meet quantitative liquidity, loss-history, and disclosure thresholds. 

Finally, we need to address the deposit flight problem by requiring large issuers to contribute five basis points of outstanding tokens annually to a Fed-run liquidity adjustment facility. Term advances from that pool would offset token-linked deposit drain at FDIC-insured banks, internalizing the funding externality without killing innovation.

GENIUS will give us a safer, clearer dollar token to work with and deeper bill-backed liquidity to draw on. That's progress we should celebrate. But payments professionals who think we can now set stablecoin strategy and forget about regulatory risk are making a mistake. 

GENIUS is a necessary first step toward mature stablecoin infrastructure. Whether stablecoins become a resilient payment medium or stumble at their first real stress test will depend entirely on how seriously policymakers take the follow-through. The payments industry has waited long enough for regulatory clarity. Now we need to make sure we get it right.