US stablecoin issuers have entered a five-month preparation window before the GENIUS Act’s expected Jan. 18, 2027, effective date, which places licensing and operating controls at the center of market access.
Summary
- Stablecoin issuers will generally need a federal or state license from Jan. 18, 2027.
- Patrick Gerhart said integrated compliance systems will present the hardest licensing challenge.
- US platforms face separate restrictions on distributing unapproved stablecoins from July 18, 2028.
- Treasury is considering customer and location checks that could affect offshore issuers and platforms.
The US Treasury proposed new definitions on Aug. 17 covering when a company issues a payment stablecoin in the United States and when a digital asset platform offers one to a US customer.
Although the proposal clarifies which activities fall under the law, Patrick Gerhart, president of Telcoin Digital Asset Bank, told crypto.news that securing a license will require issuers to prove their compliance, reserves, and technology systems work together under daily operating conditions.
“The hardest part will be building the operating infrastructure behind the license,” Gerhart said. “A stablecoin issuer needs much more than a reserve account and a compliance policy on paper.”
President Donald Trump signed the GENIUS Act into law on July 18, 2025, establishing separate regulatory paths for federally supervised issuers and qualifying state-regulated companies. Under the law, only permitted issuers may issue payment stablecoins in the United States once the framework takes effect.
Its effective date is technically the earlier of Jan. 18, 2027, or 120 days after the responsible federal agencies complete their final regulations. Regulators missed a July 18, 2026, statutory deadline for finishing the rules, however, leaving issuers with less time to adapt before the expected January start.
Stablecoin licensing will require working controls
Based on Telcoin’s chartering process, Gerhart said regulators will expect an issuer to show how it identifies customers, traces incoming funds, monitors transactions, manages reserves and handles redemptions.
Each function may require a separate policy, but the licensing test will involve how the controls operate as a single system. According to Gerhart, compliance, risk, technology, reserve management, and banking relationships cannot remain isolated workstreams.
“For issuers working toward 2027, I would expect the biggest challenge to be demonstrating that those controls actually work together operationally,” he said.
“They have to function as one operating model, and regulators will want to see that the institution is ready to manage that model at scale.”
Federal proposals support his assessment. The Office of the Comptroller of the Currency’s draft framework covers reserve assets, redemptions, custody, liquidity, capital, audits, risk management, regulatory reporting and operational backstops. Application, examination, and wind-down procedures also form part of the proposed rules.
OCC-supervised issuers would have to maintain eligible reserves and redeem stablecoins at par. Nonbank companies seeking approval as federal qualified payment stablecoin issuers would follow a separate application process, while bank subsidiaries, qualifying state issuers, and foreign companies would face requirements suited to their regulatory status.
Comptroller Jonathan Gould reportedly expects the agency to finalize its rules by November after considering industry comments. Completion by then would give issuers only about two months before Jan. 18, although the rules remain subject to revision.
Meanwhile, a separate proposal from the Financial Crimes Enforcement Network and the Office of Foreign Assets Control would treat permitted stablecoin issuers as financial institutions under the Bank Secrecy Act.
FinCEN and OFAC have proposed requirements for customer identification, due diligence, suspicious-activity reporting, and sanctions compliance. Issuers would also need the technical ability to block, freeze, or reject prohibited transactions and comply with lawful government orders.
Telcoin spent years preparing its banking model
Telcoin’s experience provides Gerhart with a direct view of the work involved. Nebraska granted Telcoin Digital Asset Bank its final charter in November 2025 under the Nebraska Financial Innovation Act, which the state enacted in 2021 to create a regulated path for digital asset depositories.
The state described Telcoin’s charter as the first of its kind in the United States. Nebraska officials said the bank’s stablecoin reserves would primarily consist of US government bonds or deposits at FDIC-insured banks in the state.
Before granting final approval, Nebraska regulators required an operating structure covering capital, reporting, security, and customer safeguards. State rules impose surety bond and insurance requirements, as well as funding for three years of operating expenses.
Digital asset depositories must also maintain customer-complaint procedures and written plans for responding to data breaches or other cybersecurity incidents. Certain security events require immediate notice to the Nebraska Department of Banking and Finance.
While developing its model, Telcoin worked with state regulators to explain how its technology operated and determine how existing banking requirements applied to the business, Gerhart said.
“We spent years working with Nebraska regulators and building the policies, procedures, reporting, and risk controls needed to operate a digital asset bank within a regulated banking framework,” he said.
Telcoin is building its services around eUSD, a bank-issued stablecoin designed to connect conventional dollar accounts with public blockchain networks. According to Gerhart, customers could move between bank-held dollars and an on-chain dollar asset without combining services from a separate bank, exchange, and stablecoin company.
For businesses, he said the model could support faster settlement and allow payments to be built into blockchain-based products. Consumers could access blockchain applications while retaining a relationship with a regulated bank.
Gerhart attributed another potential benefit to the banking controls governing reserves, custody, compliance, and redemptions. Blockchain supplies the transfer speed and programmability, he said, while the regulated institution provides a familiar operating structure.
US rules could favor prepared issuers
The GENIUS Act allows issuers with no more than $10 billion in consolidated outstanding stablecoins to choose state-level supervision when the Treasury determines that the state’s rules are substantially similar to the federal framework.
Companies exceeding the threshold generally fall under federal supervision. The OCC will oversee federally qualified nonbank issuers, stablecoin subsidiaries of national banks and federal savings associations, along with certain state-qualified companies under its authority.
Gerhart said institutions that have already invested in banking and regulatory systems may enter the new regime with an advantage. Existing controls, reporting systems, and regulator relationships could take years for less-prepared competitors to reproduce.
Under his assessment, however, banks will not simply displace established nonbank stablecoin companies. Issuers will still need interoperability and practical uses alongside regulatory approval to win customers.
“The issuers that succeed will be the ones that can combine regulatory compliance with interoperability and real utility. Regulation opens the door to more participants, but the ability to integrate with existing financial infrastructure and actually serve customers will determine who gains traction.”
An earlier explanation of the law detailed additional issuer obligations, including one-to-one reserve backing, monthly attested disclosures and a ban on paying yield directly to stablecoin holders.
Eligible reserves include cash, insured bank deposits, short-term Treasury bills, Treasury-backed repurchase agreements and qualifying money market funds. Corporate debt, loans, precious metals and cryptocurrencies do not qualify as reserve assets under the framework.
Platforms face a separate 2028 access deadline
From July 18, 2028, digital asset service providers generally cannot offer or sell a payment stablecoin to people in the United States unless an approved issuer issues it.
Treasury’s proposal treats exchanges, custodians, transfer providers and businesses offering financial services tied to digital asset issuance as service providers. Its US restrictions are intended to reach offshore activity when a platform offers or sells stablecoins to a person located in the country.
Under the proposed definitions, direct solicitation and US-facing advertising could count as an offer. A platform may also fall within the rule if it responds to an unsolicited request by agreeing to sell a stablecoin or telling potential customers how to bypass location restrictions.
Treasury is seeking feedback on whether platforms should use customer identification, account-opening data, geographic restrictions, device or network checks, contractual declarations and transaction monitoring to determine a customer’s location. IP address and identity-document checks are among the specific controls under consideration.
Foreign issuers would retain a route into the American market if the Treasury considers their home regulatory regime comparable, they register with the OCC, and they can comply with lawful orders and reciprocal arrangements.
Given the operational work involved, Gerhart said platforms should already be identifying every stablecoin they list, its issuer, the issuer’s home jurisdiction and the controls needed to limit customer access when required.
“The 2028 deadline gives platforms more time, but it is not something they should leave until 2028 to address,” he said.
Issuers should also begin reviewing reserve reconciliation, redemption procedures, KYC, anti-money laundering controls, sanctions systems, and regulatory reporting, according to Gerhart. Treasury will accept comments on its latest proposal for 60 days after the notice is published in the Federal Register.
