GENIUS Act · Section 4(a)(1)(A)
Eligible Reserves
The GENIUS Act, Section 4(a)(1)(A) (12 U.S.C. 5903), requires identifiable reserves held at least 1:1 against outstanding payment stablecoins. The enacted law permits eight categories of reserve assets. [1]
Cash and central bank money
United States coins and currency (including Federal Reserve notes) or money standing to the credit of an account with a Federal Reserve Bank.
Bank deposits
Funds held as demand deposits (or other deposits that may be withdrawn upon request at any time) or insured shares at an insured depository institution, including foreign branches, agents, or correspondent banks of that institution, subject to limits the FDIC and NCUA may set to address safety and soundness risks.
These do not have to be insured deposits. Brookings' analysis warns that uninsured reserve deposits can transmit bank-run risk to stablecoins, drawing on the March 2023 regional bank crisis. This is Brookings' risk assessment, not a regulatory requirement. [7]
Short Treasuries
Treasury bills, notes, or bonds with a remaining maturity of 93 days or less, or issued with a maturity of 93 days or less.
Repurchase agreements
Repos: the issuer sells securities for cash and agrees to buy them back.
Money received under repurchase agreements, with the issuer acting as seller and with an overnight maturity, backed by Treasury bills with a maturity of 93 days or less.
Reverse repurchase agreements
Reverse repos: the issuer buys securities and agrees to sell them back.
Overnight reverse repurchase agreements collateralized by Treasury notes, bills, or bonds, overcollateralized in line with standard market terms, that are tri-party, centrally cleared through an SEC-registered clearing agency, or bilateral with a counterparty judged adequately creditworthy even in severe market stress.
Government money market funds
Securities issued by a registered investment company or a registered government money market fund that invests solely in the assets in categories 1 through 5.
Regulator-approved substitutes
Other similarly liquid federal-government-issued assets approved by the primary federal payment stablecoin regulator, in consultation with the state regulator if applicable.
Tokenized versions
Tokenized forms of the cash, deposit, Treasury, money market fund, and approved-asset categories, but not the repo or reverse repo categories. These reserves must comply with all applicable laws and regulations.
Everything else is out: no corporate bonds, no commercial paper, no crypto collateral, no algorithmic backing. [1]
What you can do with the reserves
Pledging, rehypothecating, or reusing reserve assets is permitted only to satisfy margin obligations on permitted repo and reverse repo investments, meet standard custodial obligations, or create liquidity for redemptions.
For that last purpose, Treasury bills may be sold into repurchase agreements of 93 days or less, provided the repos are cleared by an SEC-registered clearing agency or the issuer gets prior approval from its primary federal or state regulator. This redemption-liquidity exception is distinct from the overnight repos in the eligible-asset list. [1]
Segregation and protection in bankruptcy
Section 4 requires identifiable reserves. Section 10 requires custodians to treat required reserves as belonging to the issuer's customers and protect them from the custodian's creditors. The FDIC proposal (April 10, 2026) would require reserves to be readily identified and differentiated from assets that do not back payment stablecoins.
In bankruptcy, required reserves are excluded from the issuer's estate, although the automatic stay still applies. Stablecoin holders have priority over those reserves. If a shortfall remains, holders have first priority against the estate to the extent compliance with Section 4 would have required additional reserves. [1][2]
Implementation status
Status as of September 21, 2026: the eight asset categories are enacted law. The OCC implementation rule published March 2, 2026, and the FDIC requirements-and-standards rule published April 10, 2026, remain proposals, not final rules.
The statute authorizes regulators to set deposit limits and standards for reserve diversification, liquidity, capital, and risk management. Specific deposit concentration limits, capital treatment, and reserve-deposit insurance interpretations in the OCC and FDIC proposals are proposed requirements and may change before finalization.
Under Section 20, the Act takes effect on the earlier of January 18, 2027, or 120 days after the primary federal payment stablecoin regulators issue final regulations implementing the Act. Enactment of the reserve categories and implementation of the regulatory framework are distinct milestones. [1][2][5]