The GENIUS Act

The GENIUS Act, short for the Guiding and Establishing National Innovation for U.S. Stablecoins Act, is the federal law that created a formal legal and regulatory framework for dollar-pegged payment stablecoins in the United States. It was signed into law in July 2025. Before the GENIUS Act, stablecoins existed in a regulatory gray zone. Non-bank companies issued them with varying reserve standards and limited oversight. The law changed that by creating a category of “permitted payment stablecoin issuers.” These issuers must back their coins one-to-one with high-quality liquid reserves, such as US dollars, bank deposits, and short-term Treasury bills, and they must disclose regularly what those reserves contain.

The law’s main effect isn’t technological. It is monetary and geopolitical. Because long-term Treasuries don’t count as reserves, every dollar that flows into a compliant stablecoin creates demand for cash or short-term government debt. That makes stablecoin issuers a new, built-in buyer for Washington’s borrowing, and it puts the GENIUS Act at the center of the “Treasury Twist” thesis. That thesis argues stablecoins can soak up short-term US debt as foreign appetite for long-term bonds weakens. The law also lets dollar access reach people around the world who have no traditional bank account. Federal Reserve Governor Christopher Waller has described stablecoins as a way to “import US monetary policy” across borders, which says a lot about the strategic intent behind the law. With the petrodollar’s role in global trade shrinking, digital dollars offer a new source of demand that doesn’t depend on how oil is priced.

From an Austrian economics perspective, the act is a mixed bag. Full reserve backing is a healthier standard than the fractional reserve model banks use, where most deposits are lent out. But the reserves are themselves government debt, so the law ties the growth of digital dollars directly to Treasury financing. As the Between The Lies hosts noted when the bill first passed, it’s worth reading the substance behind a catchy acronym. A law that guarantees demand for government debt is, among other things, a financing tool for the government that wrote it.

Why It Matters

The GENIUS Act is the latest chapter in a decades-long effort to extend the dollar’s dominance through financial innovation rather than sound monetary policy. It may delay a reckoning on the debt, but it doesn’t remove it. A “stable” coin is only as stable as the dollar and the Treasury bills behind it. The structural response hasn’t changed: build your own private banking system through the Infinite Banking Concept, so your finances don’t depend on Washington’s ability to keep a global dollar system running forever.

Discussed on Between The Lies Episode 038 and Between The Lies Episode 049: Scott Bessent’s “Treasury Twist”. Start building your own financial system at PerfectSpiralCapital.com/podcast.

-Updated October 17 2026-