Genius, Clarity Acts clear path for Institutional crypto ETFs

The Genius Act, enacted in July 2025, requires stablecoin issuers to hold one-to-one reserves in cash or U.S. Treasury securities. The Clarity Act, under consideration in Congress in 2026, would sort digital assets into three categories: digital commodities, investment contract assets and permitted payment stablecoins.

The proposed classification and the reserve rule are cited by lawmakers and industry groups as measures intended to reduce legal uncertainty for firms that work with digital assets and to clarify regulatory obligations for market participants.

The Fidelity Crypto Industry and Digital Payments ETF (FDIG) invests in companies that provide services to the digital currency ecosystem rather than holding cryptocurrencies directly. The fund tracks the Fidelity Crypto Industry and Digital Payments Index, carries an expense ratio of 39 basis points (equal to $39 for every $10,000 invested) and holds global companies involved in payment infrastructure, blockchain development and related services.

Advocates for the Genius Act argue the 1:1 reserve requirement is designed to strengthen reserve transparency and reduce the risk of runs on payment stablecoins. Supporters of the Clarity Act contend that classifying assets could allow some projects to be treated as commodities under U.S. law, narrowing areas of legal uncertainty.

Lawmakers and industry groups expect that if both measures take effect they would affect custody practices, reserve management and the legal exposure of banks, asset managers and other institutional investors when engaging with the crypto sector.

The regulatory changes would not alter FDIG’s structure as an equity ETF focused on firms tied to digital payments and blockchain. Investors should note that equity funds are subject to market, company-specific and sector volatility.