Payment stablecoin

The term payment stablecoin is defined in the GENIUS Act, the US federal stablecoin law signed in July 2025. It covers tokens used for payment or settlement that an issuer is obligated to convert, redeem or repurchase for a fixed monetary value and that it represents will maintain a stable value. Only permitted issuers, such as bank subsidiaries and approved federal or state qualified issuers, may issue them to US persons.

Permitted issuers must back tokens one to one with high-quality liquid reserves such as cash, demand deposits, short-term Treasuries and related repurchase agreements, publish monthly reserve composition, and meet capital, liquidity, anti-money-laundering and redemption requirements. Issuers may not pay interest or yield to holders. Payment stablecoins are not treated as securities or commodities for federal purposes.

For allocators, the category defines which tokens can scale through US banks, payment firms and exchanges. Example: a regional bank forms a subsidiary, obtains approval as a permitted issuer, and launches a dollar token for corporate clients’ cross-border payments.