The Crossover
The Machinery · Episode 1 of 6
This is Viv's Notebook.
Who can say no to your money?
America's first federal stablecoin law says every issuer must be able to freeze, seize or burn its own coins. The open question is who gets to pull that switch.
4 min watch · Industry & Adoption · Always free
A $20 bill in your pocket can't be switched off. A dollar stablecoin can, because the company that made it is still there the whole time you hold it, and it can still reach your coin. The GENIUS Act, passed in July 2025, makes that ability a condition of issuing a coin at all.
This entry is about what that clause means for the coins you hold: how often the switch has already been used, what the proposed rules would add, and when the law starts. It ends on the part of the law that may be the one most worth arguing about.
For education only, not financial advice. Crypto assets are volatile and you can lose all the money you invest.
Transcriptlightly edited
What the GENIUS Act requires
Who can say no to your money moving?
Well, in July 2025, America got its first federal law on dollar stablecoins. It’s called the GENIUS Act. Most of the coverage called it crypto regulation and moved on. But there’s a line in that that changed what you actually own. A company can only issue a dollar stablecoin if it’s technically able to freeze, seize or burn its own coins. So before an issuer is allowed to sell you a single coin, it has to have a switch in place that can turn yours off.
How cash and a stablecoin differ
If you’re not familiar, a dollar stablecoin is a token from a private company that’s meant to be worth 1 dollar. You hand the company dollars, it gives you tokens, and it holds your dollars in reserve. When you want out, it swaps them back. Cash doesn’t work like that. Nobody can reach into your pocket and switch off a $20 bill. If you’re holding it, you can spend it. A stablecoin is different. The company that made it is still there the whole time you hold it, and that company can still reach your coin. The law’s own words are seize, freeze, burn, or prevent the transfer.
Tether, Circle and the proposed rules
Tether has already blacklisted around 9,600 addresses, freezing close to $5.7 billion. Circle, which issues USDC, has done it to around 372 addresses, with around $109 million in them. Both companies were doing this before the law existed. The law makes that ability compulsory for every issuer. Then in April 2026, 2 US agencies, FinCEN and OFAC, put out proposed rules for how it should work. Issuers would need written procedures and the technical ability to block a transaction, freeze it, or reject it outright.
Lawful orders and the start date
So when you hold a dollar stablecoin, you’re holding a claim on a company, and that claim has a switch on it. That switch gets pulled on foot of a lawful order. In the GENIUS Act, that means a court order or a federal agency acting under a law that gives it the power. Now, the GENIUS Act isn’t actually in force yet. It starts on January 18th, 2027. The regulators are still writing the rules, and they’ve been busy. They’ve put out 6 proposed rules since September ’25, from 5 different agencies. The bigger bill, the CLARITY Act on crypto market structure, didn’t make it. It cleared the US House of Representatives, it cleared the Senate Banking Committee, and then in September ’26 it died on the Senate floor. It got 50 votes, it needed 60.
Who gets to pull the switch
So the switch is written into law, and the law is nearly here. The question is who gets to pull it. A court order is one thing. A federal agency acting under its own authority is a lot broader than that. I think that’s the part of the law worth arguing about.
I write about this every weekday in The Crossover. It’s free, it’s in plain English, and it’s at thecrossover.io.
Supporting notesdrawn from the transcript
A dollar stablecoin is a token from a private company that's meant to be worth 1 dollar, so holding one means holding a claim on that company, and the claim has a switch on it. Tether has already blacklisted around 9,600 addresses, freezing close to $5.7 billion. Circle, which issues USDC, has done it to around 372 addresses holding around $109 million. Both were doing this before the law existed. The GENIUS Act makes the ability compulsory for every issuer, and proposed rules from FinCEN and OFAC in April 2026 would require written procedures and the technical ability to block a transaction, freeze it or reject it outright.
The switch gets pulled on a lawful order, which in the GENIUS Act means a court order or a federal agency acting under a law that gives it the power. The law starts on January 18th, 2027, and regulators have put out six proposed rules since September 2025, from five different agencies. A court order is one thing. A federal agency acting under its own authority is a lot broader, and that may be the part of the law most worth arguing about.
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Join the conversation
This entry sets a court order beside a federal agency acting under its own authority. If you think the switch belongs with one of them, both or neither, say so below. The questions that come back here are where a lot of these entries start.