Congress Just Changed Crypto FOREVER! (GENIUS Act Passed )

You've heard the Genius bill did pass. We're going to go over every word in this bill. I'm just kidding. We're not going to do that. I'm trying to break this down and make it as simple for you to understand as possible. We're all busy, so let's get right into this thing. All right. Maybe you're like me and you were interested in what this Genius Act is really going to mean, right? So, first of all, the Genius is guiding and establishing national innovation for US stable coin act. What's the difference between a bill and an act? When they first put it up and they argue over it, it's a bill. When they pass it, then it's an act. Get that out of the way if you didn't know. And it was signed into law on July 18th, 2025. This is

really important for the crypto regulatory framework. This is really all about stable coins. And stable coins are really the bottom framework for everything else in my opinion. Not a financial adviser. Nothing I say is financial advice. Need a financial adviser? Go find one. They're out there somewhere. Now, the first category here is reserve and transparency requirements. So onetoone backing all payment stable coins must be backed one for one by US dollar or a lowrisk asset like treasuries and they need to publicly disclose issuers must report the composition of their reserves each month and highlight this word issuers because that is going to be you know who is allowed to actually issue stable coins. And then the audit. Large issuers over 50 billion in stable coin supply need annual GAP audit and must disclose related party transactions. This is really

interesting. Tether, I know Tether a lot of times operates outside of the US. Are they going to allow this GAP to come audit them? Is that going to hurt them as far as being in the US or are they, you know, all the rumors not really true about them not being, you know, insolvent? This thing has gone on in crypto for so long about USDT and they still still stand to keep standing up, right? So are they going to allow them to come audit so that they can work in the US? I don't know. That's yet to be seen. And then of course define stable coin issuers, people who are allowed to issue these stable coins. So, US-based issuers are only those approved as permitted payment stable coin issuers, including bank affiliated subsidiaries, federal charted non-banks, or state charted

institutions, and are allowed to issue these stable coins. Foreign issuers can operate in the US only if their home country has comparable regulatory framework. They register with the OC and hold reserves in the US bank. So, they need to hold their reserves here in the United States. I think that that part's probably a good move. Regulatory and consumer protections, anti-moneyaundering and sanctions. We saw this part coming. It's not really a horrible thing, but you're not going to run away from KYC. They want to know your customer, right? So, issuers must comply with Bank Secret Act, implement sanctioned checks and KYC protocols, and are subject to Treasury enforcement and consumer safeguards. Marketing must not imply government endorsement in insolveny. Stable coin holders get priority over other creditors. That part's probably a good thing. Implementation timeline. So final regul regul regulations

can't talk today. Must be drafted within one year by July 18th, 2026, including licensing, capital requirements, custody standards, and interoperability rules. That's going to be interesting. saying interoperatability is how things work together, you know, across blockchain and stuff like that. So, they're going to put some rules around that that might be really interesting. So, effective date the law becomes active either 18 months after enactment. So, around July 18th, 2027, so this is a little little ways off. 120 days after the final rules are published, whichever is earlier, right? So 3year safe harbor issuers have until mid2028 before enforcement begins against non-permitted issuers. So at this point and for some time non-permitted issuers are going to be all right. But come 2028 that that's the hard line in the sand, right? Scopes and limitations. Scopes apply to payment stable coins

used for transactions, not decentralized tokens or non-payment stable coins. No yield allowed. Issuers are banned from paying interest or yield on stable coin holdings. That one hurts a little bit. Now, if you're playing with a lot of money and you're going in and out of positions and you like to hold it in your stable coins so that the market doesn't fluctuate on you and hurt your gains, you know, it's nice to get that that interest. So, even Coinbase offers like I think it's 4% on USDC. Don't quote me on that, but it's something. And I guess they're going to take that away from them. So, or will they are they issuers? Do they just have it? If you're not an issuer, can you have yield? That'll be really interesting to see what they do with that. And non-intermediary transfers

exempt. So, peer-to-peer transfers and self-custody activities are completely not regulated. That's great. That's great news for the crypto space. and uh federal regulation will override inconsistent state rules for federal licensed issuers through certified state frameworks may still operate. So they're saying, you know, federal is going to kind of take over and what federal say is going to go in some framework of the states may still be implied, but federal is going to get the last say. That's the way that I, you know, understand that. Clear regulatory definitions clar clarifies that complement stable coins are not securities or commodities keep enforcing by the SEC and CFTC at bay. So it keeps enforcement at bay is what they're saying there. So kind of in summary here of the genius act summarize it even more. Reserves and reporting must be fully backed,

audited, transparent, disclosed. Issuer authorization is only licensed US or approved foreign entities. Consumer protection AML sanctions, marketing rules, holders priority in insolveny timeline rules due mid 2026. They have to have it finished up. And then enforcement will really start, you know, that hard line in the sand mid 2028. And then was not really covered any self-custody. We just talked about that. And this law sets rigorous phrased net framework to ensure stable coins are safe, transparent, and well regulated, supporting US dominance in digital asset payment while protecting consumers and financial systems. And that's really the main breakdown here. I did of course use chat GBT to kind of give me some insights and shorten it up so I don't just rattle on and on and on from a page where, you know, we go over the bill. And with that,

that's pretty much everything that I have to say about that. Again, I said I wanted to keep it simple. There's probably other things we could go into much more detail about, but do we really need to do that? You just need to understand the basics. This is about stable coins and a lot of the other cryptos are not really going to be affected. Will we see some more regulatory framework for, you know, the rest of the crypto space? I don't know when that's coming, but I'm sure it is at some point. If you like this, share, subscribe. I'll keep putting out content. How about that? We'll make a little deal right here and uh send it to somebody who likes crypto, somebody who's really into crypto that you know might not be you. Send them these videos and let

them understand what kind of regulation is going to be coming into the market. All right, guys. Underground Crypto out. See you in the next one.