GENIUS Act is Law – What Credit Unions Need to Know

Posted by Ryan Fitzgerald on August 4, 2025

Now that the GENIUS Act has been signed into law, it will create the first federal framework for the payment of stablecoins. Credit unions now have a path to engage and lead in this space.

Following what Congress called “Crypto Week,” saw the passage of both the GENIUS Act (S. 1582) and CLARITY Act (H.R. 3633) in the U.S. House of Representatives, as well as a debate on limiting or banning the use of a Centrally Banked Digital Currency (CBDC) in the U.S.. After passage, the GENIUS Act was quickly shuttled to the White House and signed by President Trump. The CLARITY Act, which is the broader digital assets marketplace legislation, will head to the Senate for further Congressional consideration.

A Legal Framework for Stablecoins — And a New Era for Payments

The GENIUS Act provides legal clarity for payment stablecoins, laying the foundation for the rapidly evolving digital payments environment.

The payments landscape is changing, and credit unions have an opportunity to adapt, innovate, and lead. GoWest, in partnership with member credit unions, has been engaged on the topic of stablecoins throughout the legislative process, including work with Senator Cynthia Lummis (R-WY) and her team, who have led Congress’s efforts in language development as well as helping to prevent the inclusion of harmful amendments unrelated to the payment stablecoins. Senator Lummis and many in the GoWest delegation are excited to work with credit unions on next steps in streamlining and operationalizing stablecoins as a part of the future of digital finance.

GENIUS Act Overview

The GENIUS Act creates a federal framework for regulating payment stablecoins — digital assets designed to maintain a stable value, by being pegged or on a 1:1 value ratio with the U.S. dollar, and used for expedient, low-cost transactions, with near instant settlement.

Key Provisions:

Defines “Permitted Payment Stablecoin Issuers”

Clarifies that payment stablecoins are not securities or commodities

Requires issuers to back tokens 1:1 with segregated reserves

Applies AML, BSA, and other baseline financial regulations to all issuers, especially new financial technology companies that have limited regulations

Allows traditional financial institutions to continue to be regulated by their individual state (state charters are secured and authorized to operate in the stablecoin space without additional regulation)

Gives authority to state financial regulators to approve Stablecoin issuers

Grants holders priority in bankruptcy proceedings

CLARITY Act Overview

The Digital Asset Market Clarity Act aims to eliminate the longstanding regulatory “gray zone” in crypto markets by clearly defining the roles of the SEC and CFTC.

What It Does:

Legally distinguishes “digital commodities” from other digital assets

Assigns most regulatory authority over digital commodities to the CFTC, bringing an end to the SEC’s policy that most cryptocurrencies qualify as securities

Establishes clearer rules for exchanges, intermediaries, and markets

Sets requirements for “qualified digital asset custodians,” entities authorized to hold digital assets in custody

Aims to boost investor confidence and U.S. global competitiveness in the cryptocurrency market

Supporting Innovation Through Strategic Partnerships

In May, GoWest announced a new partnership with Metallicus, developer of the Metal Blockchain. This collaboration gives member credit unions access to an Innovation Program, allowing them to test and implement real-world, blockchain-powered financial tools — opening the door to future-forward services that meet members where they are.

What’s Next

GoWest is actively monitoring developments in the digital assets, stablecoin, and payments innovation space as Congress continues to negotiate through these legislative measures. We will continue to provide timely updates on the fast-evolving policy environment. In addition to the timely updates, here is what you can expect from GoWest over the course of the next several weeks and months as we work to provide education and resources to help you prepare for likely changes coming to the payments landscape.

Overview and update on the CLARITY Act

White Paper on the Stablecoin Marketplace – outlining policy changes, regulatory overview, strategic partners and likely marketplace and operational opportunities