Stablecoins have become increasingly relevant for merchants who want to receive digital payments in a way that avoids the price volatility often associated with cryptocurrencies. Instead, they want a means of receiving digital payments that enables faster cross-border settlements, potentially through methods other than card payments.
The GENIUS Act and its stablecoin framework will change the regulatory foundation for those digital payment tokens. Signed into law on July 18, 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the “GENIUS Act”) creates the first federal framework that will regulate the issuance of stablecoins that are to be used as payments.
For merchants that are classified as high-risk, the Act does not provide a general rule that will make each stablecoin payment regulated or safe. Instead, the Act creates stricter standards for those that issue stablecoins or act as intermediaries with digital assets, but leaves merchants responsible for selecting digital payment providers, providing refunds, managing their wallets, and managing their card-processing controls.
What Does the GENIUS Act Change for Stablecoins?
The Act regulates payment stablecoin issuers, not merchants accepting stablecoins for goods and services.
Under the Act, permitted issuers must maintain identifiable reserves that fully back the stablecoins they have issued. The reserves can include U.S. currency, bank deposits, Treasury securities and other liquid assets. The issuers are required to disclose certain information regarding their ability to redeem stablecoins for these reserves.
The Act provides the following protections for stablecoins:
- Only permitted issuers can issue U.S. payment stablecoins;
- The reserves of a stablecoin issuer cannot be reused;
- The redemption procedures and fees for stablecoins are required to be disclosed by the issuer;
- Permitted issuers are required to report to the regulators regarding their reserves;
- Permitted issuers become subject to anti-money laundering and sanctions;
- An issuer cannot pay interest on stablecoins;
- The stablecoins cannot be federally insured or guaranteed by the United States government.
- Stablecoins are not insured deposits at FDIC or any other agency, nor are they guaranteed by the United States government.
As of August 2026, the Act is still being implemented. Proposals have been published regarding the requirements of the reserves of stablecoins, the procedure for redeeming stablecoins for those reserves, supervision, reporting, customer identification and anti-money laundering regulations. The GENIUS Act becomes effective on January 18, 2027, unless regulators publish regulations to make the Act effective 120 days earlier.
What the GENIUS Act Means for Merchants Accepting Stablecoins
A merchant simply receiving stablecoin payments is not automatically treated as a stablecoin issuer. The situation changes when a business begins providing digital-asset financial services itself.
The GENIUS Act defines a digital asset service provider broadly to include businesses that, for compensation or profit, exchange digital assets for money or other digital assets, transfer digital assets for third parties, provide custody or participate in financial services related to digital-asset issuance.
That creates an important line for merchants:
| Merchant Activity | GENIUS Act Consideration |
|---|---|
| Accept stablecoin through a third-party payment provider | Primarily evaluate the provider, issuer and settlement arrangement |
| Receive stablecoin directly into the merchant’s own wallet | Merchant assumes more wallet, reconciliation and operational responsibility |
| Accept stablecoin but settle automatically into dollars | Reduces direct treasury and price-management responsibilities |
| Hold stablecoin after settlement | Requires additional treasury, custody and accounting decisions |
| Transfer stablecoins for customers | May raise digital asset service provider issues |
| Operate an exchange or custodial wallet service | Significantly different regulatory model from ordinary merchant acceptance |
For most high-risk merchants, a provider-led checkout with defined settlement, reporting, wallet screening and refund procedures is easier to manage than building an internal stablecoin payment operation.
Visa’s own payment infrastructure demonstrates where the market is heading. Its stablecoin settlement pilot expanded to nine blockchains in 2026 and reached an approximately $7 billion annualized run rate. This settlement activity occurs within institutional payment infrastructure rather than requiring every merchant to manage blockchain settlement directly.
Compare Stablecoin Payment Models Before Adding Checkout
High-risk merchants should first decide whether they actually want to hold stablecoins.
| Payment Model | Best Fit | Main Strength | Main Tradeoff |
| Stablecoin checkout with fiat settlement | Merchants wanting another payment method without holding digital assets | Reduces treasury and price-management complexity | Provider eligibility and conversion fees still apply |
| Stablecoin settlement | International or B2B businesses comfortable holding stable-value digital assets | Potentially faster movement of funds | Requires custody, accounting and treasury controls |
| Direct wallet acceptance | Businesses with internal digital-asset expertise | Greater control over settlement | Merchant manages wallet operations and transaction errors |
| Stablecoin-linked card | Customers wanting to spend stablecoins through existing card infrastructure | Merchant experience can resemble ordinary card acceptance | Card processing rules and fees still apply |
| Cards + ACH + stablecoins | High-risk merchants prioritizing payment redundancy | Offers several rails for different transactions | Requires unified reconciliation and risk monitoring |
Payment Nerds can help eligible businesses evaluate stablecoins alongside cards, ACH and traditional high-risk merchant accounts. Payment Nerds does not support crypto exchanges or trading platforms, so the relevant use case is merchant payment acceptance rather than operating a cryptocurrency marketplace.
Before launching stablecoin payments, merchants should confirm:
- Which stablecoins and blockchain networks are supported
- Whether the issuer fits the emerging U.S. regulatory framework
- Whether settlement occurs in stablecoin or fiat
- Who performs wallet and sanctions screening
- How exchange and network fees work
- What happens when a customer uses the wrong blockchain
- How refunds are processed
- How payments enter accounting and order systems
- Who controls the wallet and private keys
- What happens if the stablecoin temporarily loses its peg
A stablecoin tied to one U.S. dollar is designed to maintain stable value, but it should not be treated as the same thing as dollars sitting in an insured business checking account.
How Stablecoin Payments Affect VAMP and Fraud Risk
As stablecoin payments are not Visa transactions, they do not enter into the calculation of the Visa Acquirer Monitoring Program (VAMP).
That does not make the VAMP irrelevant to merchants that accept stablecoins.
Most merchants will accept Visa cards, stablecoins and ACH payments. The fraud data from merchants accepting those Visa cards will be captured by the VAMP program. A stablecoin may be linked to a Visa card that passes through the same infrastructure as the merchant from the customer’s perspective.
Additional controls may also be necessary for stablecoin transactions that are outside of the controls applied to traditional credit and debit card transactions. Such controls may include, but are not limited to:
- wallet screening
- sanctions screening
- transaction monitoring
- wrong-network controls
- blockchain confirmation requirements
- refund procedures
- customer identity controls
- private-key and wallet access controls
- accounting reconciliation
- procedures for suspicious transfers
The proposed GENIUS Act would require stablecoin companies to implement anti-money laundering and anti-sanctions programs. These programs would require, at minimum, customer identification and transaction monitoring programs. However, merchants should still be aware of which of these rules are performed by their payment provider and which are to be fulfilled by the merchant and business itself.
Common Stablecoin Payment Mistakes
The biggest mistake with stablecoin payments is treating them as a way around payment oversight.
Other common mistakes include:
- assuming the GENIUS Act eliminates merchant risk
- accepting any token that is pegged to the dollar
- confusing stablecoins with insured bank deposits
- holding digital assets without a treasury policy
- failing to account for sanctions and wallet screening
- accepting cryptocurrency payments on networks other than those supported by the merchant’s wallet
- failing to establish a process for issuing refunds using stablecoins
- losing access to merchant wallets and private keys
- assuming blockchain technology allows for the reversal of transactions
- failing to reconcile digital and stablecoin payments with sales invoices
- using cryptocurrency to conceal the true nature of a business that does not support cards
- ignoring VAMP because stablecoin payments were added to the checkout
Stablecoins should add diversity to the merchant’s payment strategy, not be used as a means of hiding merchant activity or avoiding the requirements of other payments channels.
GENIUS Act & Stablecoin Payment FAQs
Q: What is the GENIUS Act?
A: The GENIUS Act is a federal law that creates a regulatory framework for payment stablecoin issuers in the United States. The Act requires those issuers to hold reserves, redeemable for stablecoin tokens, be supervised by a federal agency, and comply with various anti-financial crime laws and regulations.
Q: When did the GENIUS Act go into effect?
A: The Act was enacted on July 18, 2025, but is to go into effect on January 18, 2027 (unless final implementing regulations for the Act are published, which would trigger an effective date prior to January 18, 2027). Proposed regulations to implement the Act were still being worked out as of August 2026.
Q: What does the Act require stablecoin issuers to hold?
A: The Act requires stablecoin issuers to maintain reserves of at least 1-to-1 with the number of stablecoin tokens that are in circulation, and those reserves must consist of specified types of liquid assets (such as U.S. currency, deposits, and short-term Treasury securities).
Q: Are stablecoins FDIC insured?
A: No. The GENIUS Act prevents payment stablecoins from being represented as being federally insured or guaranteed by the United States government.
Q: Can high-risk merchants accept stablecoin payments?
A: Some high-risk merchants can accept stablecoins, but only if their specific industry and payment provider permit such acceptance. Accepting stablecoins does not make prohibited or illegal products or activities acceptable for the merchant.
Q: Do merchants need a crypto license to accept stablecoins?
A: While merchants may be required to obtain a license if they are providing certain crypto-related financial services, accepting a stablecoin for one’s goods and services is a separate activity from licensing requirements. Any business involved in the provision of financial services based on digital assets should obtain the appropriate licenses and regulations for their specific activities.
Q: Do stablecoin payments have chargebacks?
A: Since stablecoin transactions use the blockchain, they do not go through the chargeback process used by card networks. Merchants may still need to have procedures in place for customer or contractual/legal disputes.
Q: Does VAMP apply to stablecoin payments?
A: As stablecoin transactions are not Visa transactions, they do not fall under VAMP. However, if a merchant accepts both stablecoins and Visa payments, the latter will fall under VAMP.
Q: Should merchants receive stablecoins or settle in dollars?
A: If a merchant only wishes to accept stablecoins as a form of payment from customers, the fiat settlement process can simplify the merchant’s treasury management. However, receiving stablecoins might offer merchants more flexibility in their finances, but with stricter controls.
Should Stablecoins Be Part of Your Payment Strategy?
The GENIUS Act provides a regulatory path for stablecoins, specifically regarding the reserves that must be held by the stablecoin issuer, how they will be redeemed, and how they will be supervised. However, the Act does not convert stablecoin holdings into insured deposits from banks or shift responsibility for digital-asset payments to the stablecoin company.
Instead, merchants recognized as high-risk will have to evaluate whether stablecoin payments are an appropriate replacement for current payment methods or whether they can provide additional benefits to the customers the merchant currently serves.
Sources
- U.S. Government Publishing Office. “Public Law 119-27 — GENIUS Act.” Accessed August 2026.
- Office of the Comptroller of the Currency. “GENIUS Act Regulations: Notice of Proposed Rulemaking.” Accessed August 2026.
- Federal Deposit Insurance Corporation. “FDIC Approves Proposal to Implement GENIUS Act Requirements and Standards.” Accessed August 2026.
- U.S. Department of the Treasury. “Treasury Proposes Rule to Implement the GENIUS Act’s Anti-Money Laundering Obligations.” Accessed August 2026.
- Financial Crimes Enforcement Network. “Permitted Payment Stablecoin Issuer Customer Identification Program.” Accessed August 2026.
- Visa. “Visa Adds Five Blockchains for Stablecoin Settlement.” Accessed August 2026.
- Visa. “Visa Launches Stablecoin Settlement in the United States.” Accessed August 2026.
