Under the GENIUS Act (Public Law 119-27), only a “permitted payment stablecoin issuer” may issue a payment stablecoin in the United States: an approved subsidiary of an insured bank or credit union, a federal issuer approved by the OCC, or a state-qualified issuer. Issuers must hold at least 1:1 reserves in cash, deposits and short-term Treasuries, publish their reserve composition every month with an exam by a registered public accounting firm, comply with anti-money laundering rules and pay no interest. The law takes effect on January 18, 2027: the OCC final rule published on October 23, 2026 does not move that date.
The short definition is in our GENIUS Act glossary entry; this guide explains what the law requires of anyone who plans to issue, integrate or build a stablecoin. Don't confuse it with the CLARITY Act, the market structure bill that, as of October 31, 2026, the Senate has not passed (we compare them in GENIUS Act vs CLARITY Act). Section numbers refer to the Act unless stated otherwise.
Who can issue a payment stablecoin
From the effective date, issuing a payment stablecoin in the U.S. without being a permitted issuer will be unlawful (Sec. 3(a)), with fines of up to $1 million per violation, up to 5 years in prison, or both for anyone who knowingly participates (Sec. 3(f)). A permitted issuer must be formed in the United States (Sec. 2(23)) and qualifies through one of three paths:
| Path | Who | Who approves and supervises | Keep in mind |
|---|---|---|---|
| Subsidiary of an insured institution | A subsidiary of a federally insured bank or credit union, approved under Sec. 5 | The bank's federal regulator (OCC, Federal Reserve or FDIC) or the NCUA (Sec. 2(25)) | The parent institution applies |
| Federal qualified issuer | A nonbank entity approved by the OCC, an uninsured national bank chartered by the OCC, or a federal branch of a foreign bank (Sec. 2(11)) | OCC | The path for a fintech that is not a bank; the OCC requires minimum capital of $5 million |
| State qualified issuer | An entity approved by a state regulator that is not an insured bank or a subsidiary of one (Sec. 2(31)) | The state regulator, if its regime is “substantially similar” to the federal one (Sec. 4(c)) | Up to $10 billion outstanding; above that, 360 days to move to the federal framework or, from the day it crosses the threshold, stop issuing, unless granted a waiver (Sec. 4(d)) |
A public company not predominantly engaged in financial activities, or a nonfinancial company domiciled outside the U.S., may issue only with a unanimous vote of the Stablecoin Certification Review Committee, made up of the Treasury, the Federal Reserve and the FDIC (Secs. 4(a)(12) and 2(27)).
Timelines. The regulator has 30 days to say whether an application is substantially complete and 120 days to decide (Sec. 5(d)); according to the OCC, that clock does not run before the effective date. Regulators may also waive the Act's requirements for up to 12 months for bank subsidiaries and federal issuers with an application pending on the effective date (Sec. 5(f)).
Reserves, redemption and disclosure
- 1:1 reserves, identifiable, held in cash or Federal Reserve balances, demand deposits at insured institutions, Treasuries maturing in 93 days or less, overnight repos backed by Treasuries, government money market funds that invest only in those assets, or other similarly liquid federal government assets approved by the regulator; most of these may also be held in tokenized form (Sec. 4(a)(1)(A)). Reserves may not be pledged or reused, except in listed cases (Sec. 4(a)(2)).
- Redemption: a public policy with clear procedures and fees; fees can change only with 7 days' notice (Sec. 4(a)(1)(B)). The OCC rule caps redemption at two business days and requires notice to the OCC within 24 hours if requests exceed 10% of outstanding issuance in a single day (12 CFR 15.12).
- Monthly report on the issuer's website: stablecoins outstanding and the amount and composition of reserves, with their average tenor and custody location (Sec. 4(a)(1)(C)). Each month a registered public accounting firm examines it, and the CEO and CFO certify its accuracy to the regulator, with criminal penalties for a knowingly false certification (Sec. 4(a)(3)).
- Annual audit under PCAOB standards, published on the website, for issuers above $50 billion outstanding that do not already report to the SEC (Sec. 4(a)(10)).
- Capital and risk set by rule (Sec. 4(a)(4)). The OCC requires at least $5 million in capital and assets equal to 12 months of expenses as an operational backstop (12 CFR 15.41), plus weekly and quarterly reports (12 CFR 15.14).
- Custody and insolvency: only supervised entities may hold the reserves and the issuing keys (Sec. 10), and in an insolvency holders have priority over the reserves (Sec. 11).
Prohibitions and anti-money laundering
- Interest: neither a permitted issuer nor a foreign issuer may pay interest or yield, in cash, tokens or other consideration, solely for holding, using or retaining the stablecoin (Sec. 4(a)(11)).
- Tying and misleading names: an issuer may not condition a service on the customer buying another product (Sec. 4(a)(8)) or present the stablecoin as legal tender or government-backed; “USD” in the name is allowed (Sec. 4(a)(9)).
- Distribution: starting July 18, 2028, exchanges, custodians and other digital asset service providers may not offer or sell to people in the U.S. a stablecoin from a non-permitted issuer, subject to exceptions (Sec. 3(b)(1)). Separately, stablecoins from non-permitted issuers are not treated as cash or a cash equivalent for accounting purposes (Sec. 3(g)).
- AML and sanctions: the issuer is a financial institution under the Bank Secrecy Act: an AML program with a designated officer, recordkeeping, suspicious activity reporting, technical capabilities to block, freeze and reject unlawful transactions, customer identification and a sanctions program (Sec. 4(a)(5)).
- Lawful orders: an issuer may issue only if it has the technological capability to comply with any “lawful order” (Sec. 4(a)(6)(B)), meaning a final, appealable order requiring it to seize, freeze, burn or prevent the transfer of specific stablecoins or accounts (Sec. 2(16)).
Section 3 does not apply to direct transfers between individuals without an intermediary or to self-custody wallets (Sec. 3(h)), and from the effective date payment stablecoins from permitted issuers are not securities or commodities (Sec. 17).
Timeline and rulemaking status
The Act takes effect on the earlier of 18 months after enactment or 120 days after the primary federal payment stablecoin regulators issue any final regulations implementing it (Sec. 20). The OCC issued the first one on October 23, 2026; 120 days later is February 20, 2027, after the 18-month mark, so, as the OCC itself concludes, the effective date is January 18, 2027.
Status as of October 31, 2026
| Regulator | Status | Federal Register documents |
|---|---|---|
| OCC | Final rule (new 12 CFR part 15: licensing, reserves, redemption, capital, foreign issuers and custody), effective 1/18/2027. Its AML and sanctions rule is still a proposal | 2026-21706 (91 FR 67000); proposal 2026-12692 |
| FDIC | Three proposals: subsidiary approvals; requirements and standards, including tokenized deposits; BSA and sanctions | 2025-23510, 2026-06974, 2026-11342 |
| Federal Reserve | Two proposals (its responsibilities and application procedures); comments due 11/30/2026 | 2026-19860, 2026-19899 |
| NCUA | Two proposals (licensing and a supplemental proposal) | 2026-02868, 2026-09915 |
| Treasury | Interim final rule on how the Stablecoin Certification Review Committee reviews state regime certifications, in force since 9/30/2026; proposals on state regimes and on issuance, offer and sale (comment period closed 10/19/2026) | 2026-19966, 2026-06489, 2026-16796 |
| FinCEN and OFAC | AML and sanctions proposal and, with the banking regulators, a customer identification proposal | 2026-06963, 2026-12460 |
The one-year rulemaking deadline (Sec. 13(a)) passed on July 18, 2026 with no final rules. The OCC will accept applications once the Office of Management and Budget (OMB) approves its forms, which take comments until November 23, 2026, and will announce it in a bulletin. The Federal Register shows no Treasury determination that another country's regime is comparable (Sec. 18(b)). Last action verified: October 29, 2026, a correction to the OCC notice on application forms.
Upcoming dates: 11/30/2026, comments close on the Federal Reserve proposals and the Treasury interim final rule; 1/18/2027, effective date; 7/18/2027, the date by which Treasury should complete reciprocal arrangements (Sec. 18(d)(3)); 1/18/2028, deadline for the initial certification of state regimes (Sec. 4(c)(4)); 7/18/2028, the platform restriction takes effect (Sec. 3(b)(1)).
Issuers outside the U.S. (and how this relates to MiCA)
To be exempt from the Sec. 3 prohibitions, a foreign issuer (organized or domiciled outside the U.S. and not permitted, Sec. 2(12)) must meet four conditions (Sec. 18(a)): Treasury has found its home regulator's regime comparable; it is registered with the OCC, which deems a registration approved after 30 days unless it rejects it; it holds reserves at U.S. institutions sufficient for its U.S. customers' liquidity, unless a reciprocal arrangement provides otherwise; and its home country is not under comprehensive sanctions or designated a jurisdiction of primary money laundering concern. Under the OCC rule, one way to meet the third condition is that U.S. holders hold less than 50% of the issuance and U.S.-held reserves equal at least 50% of it (12 CFR 15.31).
Also, in our reading, which matches Treasury's in its proposed rule 2026-16796, from the effective date a platform may not offer a foreign issuer's stablecoin in the U.S. unless the issuer can technologically comply with lawful orders and reciprocal arrangements (Sec. 3(b)(2)): the 2028 delay appears only in Sec. 3(b)(1). The interest ban covers foreign issuers too (Sec. 4(a)(11)). As of October 31, 2026, the Federal Register shows no comparability determination, and the Act requires one to be published there before it takes effect (Sec. 18(b)(1)).
If you issue in the EU. Under MiCA, a stablecoin referencing a single official currency is an e-money token (EMT). The two regimes are similar, but in our reading there is no mutual recognition today: a MiCA authorization does not let you issue in the U.S., and GENIUS approval does not let you offer to the public in the EU.
| GENIUS Act (U.S.) | MiCA (EU, EMT) | |
|---|---|---|
| Who issues | A permitted issuer formed in the U.S. (Sec. 2(23)) | An authorized credit institution or electronic money institution that has notified and published a white paper (Art. 48) |
| Reserves | At least 1:1 in cash, deposits, Treasuries maturing in 93 days or less and other listed assets (Sec. 4(a)(1)(A)) | At least 30% in separate accounts at credit institutions; the rest in highly liquid assets in the same currency (Art. 54) |
| Redemption | Public policy; fees allowed if disclosed (Sec. 4(a)(1)(B)); two business days under the OCC | At any time, at par and free of charge (Art. 49) |
| Interest | Banned for the issuer (Sec. 4(a)(11)) | Banned for the issuer and for crypto-asset service providers (Art. 50) |
To issue in euros, see our guide to euro stablecoins and the MiCA glossary entry; for Latin America, stablecoins in Latin America.
What an issuer needs to build
The Act does not mandate a blockchain or a token standard, but in our reading several obligations can only be met if contracts and systems are designed for them from day one:
| What the Act or the OCC rule requires | Our proposed technical design |
|---|---|
| Complying with orders to seize, freeze, burn or prevent transfers (Sec. 4(a)(6)(B)) and blocking unlawful transactions (Sec. 4(a)(5)) | A smart contract with a blocklist, per-address freezing and burning of blocked balances, with separate roles, event logs and the same logic on every chain where the token circulates |
| Issuing only against 1:1 reserves | Minting and burning tied to treasury: tokens are minted once funds are confirmed and the customer is identified, and burned on redemption; minting keys with limits and multisig or MPC |
| Monthly report examined by an accountant (Secs. 4(a)(1)(C) and 4(a)(3)) | Daily reconciliation between supply across all chains and bank and custodian balances, with an audit trail. Onchain proof of reserves helps, but it does not replace the exam |
| Redemption within two business days (OCC rule) | A redemption queue with measured turnaround and alerts on unusual volume, such as the 10%-in-24-hours threshold |
| Custody by supervised entities (Sec. 10) | API integration with the client's authorized bank and custodian to reconcile balances and instruct movements |
| Customers, sanctions and suspicious activity (Sec. 4(a)(5)) | KYC and KYB for direct customers, address and sanctions list screening, and onchain transaction monitoring |
Every contract version should go through a smart contract audit before deployment, and the freeze and burn functions need an internal procedure that defines who runs them and under which lawful order.
At Unknown Gravity we design and build this technical layer (smart contracts, integrations and reporting) with the client's legal counsel and the authorized entities acting as issuer, bank or custodian. We do not issue stablecoins, we do not hold reserves and we do not provide legal advice.
Where to start. If you plan to collect, pay or move treasury funds with stablecoins from authorized issuers, see stablecoin payments. If you are weighing whether to issue and need to turn the GENIUS Act and MiCA into architecture, timelines and budget, start with our blockchain consulting or book a meeting.
Frequently asked questions
When does the GENIUS Act take effect?
On January 18, 2027, 18 months after it was signed. It would only have taken effect earlier if a primary federal regulator had published a final rule more than 120 days before. The first one, from the OCC, is dated October 23, 2026, and the OCC itself confirms the date.
Can a company that is not a bank issue a stablecoin?
Yes, if it is formed in the U.S. and approved by the OCC as a federal qualified issuer, or by a state regulator as a state qualified issuer while it stays at or below $10 billion outstanding. A nonfinancial public company also needs a unanimous vote of the Stablecoin Certification Review Committee.
Can a stablecoin pay interest?
The issuer cannot, and neither can a foreign issuer: the Act bars any interest or yield solely for holding, using or retaining the stablecoin (Sec. 4(a)(11)). In the EU, MiCA extends the ban to crypto-asset service providers (Art. 50).
Is a MiCA authorization enough to sell a stablecoin in the U.S.?
Not on its own. Treasury would have to find the EU regime comparable, and the issuer would have to register with the OCC and hold sufficient reserves in the U.S.; as of October 31, 2026, there is no comparability determination. The alternative is to form a U.S. entity and get it approved as a permitted issuer.
When can I apply to the OCC?
Once OMB approves its forms; the OCC will announce it in a bulletin. Applicants who want the waiver of up to 12 months under Sec. 5(f) should apply before January 18, 2027; others can apply afterward.
Sources
- Public Law 119-27, GENIUS Act (govinfo)
- S. 1582 record (BILLSTATUS, govinfo)
- OCC final rule 2026-21706 (91 FR 67000, October 23, 2026)
- OCC notice on application forms 2026-21704 and correction 2026-22036
- Treasury interim final rule 2026-19966
- Treasury proposal on issuance, offer and sale 2026-16796
- Federal Reserve proposal 2026-19860
- FDIC proposal 2026-06974
- FinCEN and OFAC proposal 2026-06963
- H.R. 3633, CLARITY Act record (BILLSTATUS, govinfo)
- Regulation (EU) 2023/1114 (MiCA), Arts. 48 to 50 and 54 (EUR-Lex)
This article is for information only and is not legal advice. Status verified as of October 31, 2026; the law and its rules may change: check the current text on govinfo, the Federal Register and, for MiCA, EUR-Lex.