GENIUS, STABLE, and CLARITY Acts and State Laws

You’ve probably heard of cryptocurrency, blockchain, and stablecoins, otherwise known as digital assets. However, your credit union probably doesn’t directly deal with any of those. That is likely because there is currently a limited federal legal and regulatory framework for digital assets. While there are some state laws and regulations governing cryptocurrency, blockchain, and/or stablecoins, it’s a confusing hodgepodge of state government oversight and rules. For insight on state law treatment, America’s Credit Unions has created a 50-state survey table which reflects a high-level overview of state regulations of digital assets in the United States. As you will see, there is significant diversity among the states, ranging from regulations under money transmitter laws to permissive custody laws to cautious sandbox experiments. Below are the key findings from the 50-state survey:

•    Custody Authorization: At least 6 states — California, Nebraska, New York, Oklahoma (effective 11/1/2025), Texas, Virginia, Wyoming — explicitly allow the custody of virtual assets by chartered entities or digital asset depositories.
•    Regulatory Guidance or Licensing: At least 34 states — Alabama, Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, Wyoming  — provide statutory or administrative guidance on cryptocurrency licensing, money transmission laws, or digital asset definitions.
•    Restrictions or Consumer Protections: At least 6 states — California, Connecticut, New York, Oregon, South Dakota, Texas — impose specific conditions on stablecoins, kiosk operations, or prohibit central bank digital currency (CBDC) use.
•    Sandbox Programs or Task Forces: At least 9 states — Alabama, Arizona, Arkansas, Florida, Hawaii, Illinois, Louisiana, Montana, Nevada — have implemented financial technology sandboxes or blockchain innovation programs to pilot crypto use cases.
•    Explicit Exemptions: 4 states — Idaho, Indiana, Kansas, North Carolina, Texas — carve out exemptions for non-custodial crypto services, peer-to-peer transfers, and certain direct sales.
 
Nevertheless, there is light at the end of the tunnel for federal rules, at least for stablecoins. With the GENIUS Act that just passed in the Senate and the STABLE Act in the House, there could soon be a comprehensive federal framework for the issuance and regulation of payment stablecoins. The House is also considering the CLARITY Act, which would create a broader framework for digital assets to be governed as commodities, securities, or stablecoins. Below is a brief overview of each bill.

GENIUS Act

The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act) is a bill which aims to establish a federal regulatory framework for payment stablecoins—digital assets backed by the U.S. dollar or other fiat currencies—to ensure consumer protection, financial stability, and innovation in the digital asset space. As of June 17, 2025, the GENIUS Act passed the Senate and is now being sent to the House for their review.  

The Act would define Payment Stablecoins as digital assets used for payments or settlement, redeemable for a fixed amount of monetary value. Stablecoins would not be classified as securities or national currency (U.S. dollar). They would also be backed 1:1 by reserves such as U.S. dollars or Treasury bills.  Only permitted payment stablecoin issuers (PPSIs) who obtain a federal license would be able to issue stablecoins in the United States. PPSIs include subsidiaries of insured depository institutions (e.g., credit unions and banks), federal qualified nonbank payment stablecoin issuers approved by the Office of the Comptroller of the Currency (OCC), and state qualified payment stablecoin issuers approved by state regulators. It would create both federal and state regulatory oversight and include safety and soundness requirements such as monthly liquidity reports, audits and transparency requirements.

STABLE Act

The STABLE Act (Stablecoin Tethering and Bank Licensing Enforcement Act) is bill which was introduced in the U.S. House of Representatives aimed to regulate stablecoins by establishing a federal framework for the issuance and supervision of these digital assets. The STABLE Act and the GENIUS Act have many similarities, but they are not identical.

The Act would also define Payment Stablecoins. The definition is similar to the GENIUS Act’s definition; however, the STABLE Act explains that a payment stablecoin must be expressed in a national currency, and is not a “deposit” as defined in the Federal Deposit Insurance Act or an “account” as defined in the Federal Credit Union Act. Additionally, it would confine issuance primarily to subsidiaries of federally insured depository institutions (federally chartered banks and credit unions that carry insurance), and federally licensed nonbanks (subject to Title V of the Gramm-Leach-Bliley Act). State-chartered issuers would also be permitted if their oversight is deemed equivalent to federal rules. The regulatory oversight would have a “federal-first” oversight model which places federal agencies with the regulatory authority with minimal state oversight unless their regulatory frameworks are certified by the Treasury Department as meeting federal standards. The Act enforces adherence to existing banking regulations, including those related to anti-money laundering (AML) and consumer protection laws.

CLARITY Act

H.R. 3633, the Digital Asset Market Clarity Act of 2025, is a bill introduced in the House of Representatives that aims to create a regulatory framework for digital asset and related markets.  The Act would divide digital assets into three categories: (i) securities, (ii) commodities, and (iii) stablecoins. “Digital commodity” is broadly defined as “a digital asset that is intrinsically linked to a blockchain system, and the value of which is derived from or is reasonably expected to be derived from the use of the blockchain system.”
It would grant regulatory jurisdiction for digital commodities to the Commodity Futures Trading Commission (CFTC) and establish provisional registration requirements for digital commodity exchanges, brokers, and dealers, except when digital commodities are transacted by SEC-registered exchanges, brokers, and dealers. In these limited circumstances, the SEC would retain anti-fraud and market-manipulation oversight.