The GENIUS Act requires stablecoin issuers to hold 100% reserves in liquid assets like cash, Treasury bills, or central bank deposits—stricter than traditional bank reserve requirements.

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The GENIUS Act mandates that U.S. dollar-pegged stablecoin issuers hold one dollar of permitted reserves (cash, insured deposits, short-dated Treasury bills, or central bank reserves) for every stablecoin in circulation. This 100% liquidity requirement is stricter than traditional fractional-reserve banking, where banks can lend out most deposits. Congress imposed this standard because stablecoins lack FDIC insurance and operate outside conventional bank supervision, creating systemic risk if reserves aren't fully liquid. By requiring full backing, lawmakers aim to prevent "bank runs" on stablecoins while enabling payment innovation. The Federal Reserve, FDIC, and Treasury oversee compliance through a new Stablecoin Certification Review Committee, balancing state and federal regulatory authority.

The GENIUS Act requires stablecoin issuers to hold 100% reserves in liquid assets like cash, Treasury bills, or central bank deposits—stricter than traditional bank reserve requirements.

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