GENIUS Act
Limits on pledging or reusing reserves
GENIUS Act section 4(a)(2) prohibits a permitted payment stablecoin issuer from pledging, rehypothecating, or reusing required reserves, apart from three narrow purposes the paragraph itself lists. ReserveBeat publishes no measurement of this prohibition: nothing in an issuer's monthly disclosure reports encumbrance, so the coverage board carries no field for it.
Statutory text, verbatim
- Citation
- GENIUS Act § 4(a)(2)
- Document
- S. 1582 ENROLLED (119th Congress)
- Retrieved
- 2026-07-25
Quoted exactly as it appears in the enrolled bill, including its line breaks and indentation. ReserveBeat does not re-wrap, edit, or abridge statutory text.
(2) Prohibition on rehypothecation.--Reserves required under
paragraph (1)(A) may not be pledged, rehypothecated, or reused by
the permitted payment stablecoin issuer, either directly or
indirectly, except for the purpose of--
(A) satisfying margin obligations in connection with
investments in permitted reserves under clauses (iv) and (v) of
paragraph (1)(A);
(B) satisfying obligations associated with the use,
receipt, or provision of standard custodial services; or
(C) creating liquidity to meet reasonable expectations of
requests to redeem payment stablecoins, such that reserves in
the form of Treasury bills may be sold as purchased securities
for repurchase agreements with a maturity of 93 days or less,
provided that either--
(i) the repurchase agreements are cleared by a clearing
agency registered with the Securities and Exchange
Commission; or
(ii) the permitted payment stablecoin issuer receives
the prior approval of its primary Federal payment
stablecoin regulator or State payment stablecoin regulator,
as applicable.
What ReserveBeat does with this
ReserveBeat does not track this. The board's reconciliation compares reported reserve totals against on-chain supply; it cannot observe whether a reserve instrument has been pledged, because no issuer disclosure ReserveBeat ingests states that. This page exists to name the requirement and to say plainly that the board is silent on it, rather than leaving a reader to infer coverage from the board's presence.
Terms used in this provision
Definitions live in the learn section. ReserveBeat defines terms in one place and links to it.
This page is a pointer to primary law, not legal advice. ReserveBeat is not a law firm and takes no position on how any provision applies to any issuer. Read the statute.
- Published by
- ReserveBeat research · Methodology
- Reviewed
Questions
Common questions
Is this the full text of the GENIUS Act?
No. Seven provisions are published here, sliced from the enrolled bill S. 1582 and quoted verbatim. The full Act is at the source link on every provision page.
Does ReserveBeat check whether an issuer meets these requirements?
No. ReserveBeat reconciles what an issuer publishes against what is observable on-chain and prepares evidence for a registered public accounting firm. It takes no position on any issuer's legal status.
Where did this text come from?
It was retrieved once from congress.gov, on the date shown on each page, and committed to this repository as a citable file. Pages render from that file, so the text cannot drift between readings.
Is this legal advice?
No. ReserveBeat is not a law firm. These pages point at primary law and describe what this product measures; they do not interpret the statute or apply it to anyone.