GENIUS Act Implementation: Key Proposals and What Comes Next

INTRODUCTION

Following the US president’s signing of the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act or the Act) in July 2025, US federal financial agencies have been building the implementing framework to define how to issue payment stablecoins legally in the United States. Much has been proposed, but much is left to be done to implement the GENIUS Act before January 2027.

As discussed in prior GENIUS Act LawFlashes—including our GENIUS Act overview, insolvency analysis, and federal/state framework discussion—the Act defines a new financial instrument, the payment stablecoin, and sets the requirements that financial firms, both traditional banks and new crypto-native firms, will have to navigate. The stakes are high. Payment stablecoins under the GENIUS Act could serve both as a new form of quasi-private money[1] and a new form of payment.[2] Failure to comply with the Act can subject firms and individuals to criminal penalties.

In the nine months since the president signed the Act, we have seen proposals from the US Department of the Treasury, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (NCUA). This piece provides an update on the various regulatory proposals, summarizes the requirements of those proposals, and ends with an accounting of the numerous implementation steps that remain unfinished.

GENIUS ACT IMPLEMENTING PROPOSALS SO FAR

The GENIUS Act defines the manner in which an entity can issue a payment stablecoin to a person within the US. Entities licensed under the Act to issue a payment stablecoin are termed Permitted Payment Stablecoin Issuers (PPSIs). The agency proposals below are the financial agencies’ initial steps to implement the Act.

*Comment deadlines could be changed if the relevant agency grants an extension.

Detailed analysis of the OCC proposal and AML/CFT framework is provided in related content.

CONTENT OF THE PENDING PROPOSALS

Treasury’s Advanced Notice of Proposed Rulemaking

Treasury’s September 2025 Advanced Notice of Proposed Rulemaking sought public comment on various aspects of GENIUS Act implementation, including what temporary safe harbors Treasury should implement related to compliance with the Act, the need to provide additional clarity to statutory terms, input on innovative methods or techniques to detect illicit activity, input on whether Treasury’s evaluation of foreign regimes to regulate payment stablecoins is comparable to the new GENIUS Act regime, and what changes should be made to tax policy or insurance regulation because of the Act. In March 2026, Treasury issued a report to US Congress focused only on its findings related to innovative technologies to counter illicit finance involving digital assets.

FDIC and NCUA’s Licensing Proposals

Both the FDIC and NCUA issued proposals, Notices of Proposed Rulemaking (NPRMs), that establish processes by which entities within their jurisdiction would apply to become licensed to issue payment stablecoins. Unlike the OCC’s regime, the FDIC and the NCUA proposals apply only to a narrow set of potential stablecoin issuers.

The FDIC’s December 2025 proposal sets out the agency’s licensing procedures for payment stablecoin. The proposal applies to FDIC-supervised insured depository institutions that want to issue a payment stablecoin through a subsidiary. Under the FDIC’s proposal, the agency would be required to process applications quickly—the FDIC has 30 days after receipt to notify the applicant if the application is incomplete. Failure to send a notification within that time period means the application is automatically deemed complete. The FDIC will then have 120 days after receipt of a complete application to approve or deny it—any application is deemed approved by default if it is not acted on in 120 days. The proposal further emphasizes, consistent with the GENIUS Act, that a denial on the basis of safety and soundness can be based only on the statutory factors from section 5(c) of the Act (12 USC 5904(c))—financial condition, management integrity, and risk to the parent bank.

Similarly, the NCUA’s February 2026 proposal sets out the agency’s licensing procedures, which cover credit unions that want to issue a payment stablecoin through a subsidiary. An issuer will be regulated by the NCUA if it is a Credit Union Service Organization. Under the NCUA’s proposal, Credit Union Service Organizations seeking to become PPSIs must submit their proposal jointly with their federally insured credit union “Parent Company” (here a “Parent Company” is an entity that owns at least 10% of the voting shares of the subsidiary issuer). Additionally, the proposal would limit federally insured credit unions to investing only in stablecoin issuers licensed by the NCUA.

FDIC’s Substantive GENIUS Act Proposal Setting Standards for FDIC-Supervised PPSIs

Scope

The FDIC’s April 2026 proposal defines the substantive standards to which FDIC-supervised PPSIs would be held. Together with the FDIC’s earlier proposed rule covering licensing requirements, these two proposals, when finalized, will complete the FDIC’s work under the GENIUS Act. The FDIC’s proposal, with a few important exceptions, covers only those insured depository institutions subject to the FDIC’s primary supervision that wish to issue a payment stablecoin through a subsidiary. It also closely tracks the OCC’s proposal, often mirroring language exactly. The FDIC recognized that the OCC’s proposed rule is “more expansive” given the more diverse set of issuers the OCC will license and regulate. The FDIC “has endeavored . . . to align” its proposal with the OCC’s proposed rule and specifically seeks comment on the extent to which the payment stablecoin regulators should further align their final rules.

Activities and Yield

Activities: The FDIC’s proposal regarding permissible activities for an FDIC-regulated PPSI largely tracks the substance of the OCC’s proposal, with some differences. ^[3] The notable difference is the FDIC adds two prohibitions it applies to FDIC-regulated PPSIs: first, in addition to the restrictions on naming or marketing that a payment stablecoin is approved of or backed by the US government, issuers cannot market a payment stablecoin in the US if the stablecoin fails to comply with the requirements of the Act; second, issuers cannot provide credit to customers (directly or indirectly) for the purpose of allowing the customer to purchase payment stablecoins.

Yield: The FDIC uses the same language proposed by the OCC to implement the GENIUS Act prohibition on payment stablecoin issuers paying yield or interest to a stablecoin holder solely for holding the stablecoin.

Deposit Insurance

The FDIC proposal sets new deposit insurance rules for the reserves of payment stablecoins. It would amend the deposit insurance coverage rules^[4] that apply to all FDIC-insured depository institutions by clarifying that deposits held as reserves backing a payment stablecoin would be insured to the PPSI under the FDIC’s coverage rules for corporate deposits and therefore would not offer pass-through insurance coverage to stablecoin holders.

Tokenized Deposits

The FDIC’s proposal would also clearly define that the technology used to record a deposit, including use of a digital ledger, does not affect the application of deposit insurance. Deposit insurance is technology neutral, and therefore tokenized deposits can be an insured deposit if they meets the statutory definition of deposit under 12 USC 1813(l). The FDIC’s preamble has much to say about tokenized deposits, such that it may prove useful for those involved in creating tokenized deposits to consult.

Treasury’s State Licensing Regime Proposal

The GENIUS Act authorized states to license and regulate payment stablecoin issuers with an outstanding issuance of not more than $10 billion, so long as the state’s regulatory regime is “substantially similar” to the federal regulatory framework defined by the Act. The Act then tasked Treasury with establishing broad-based principles by which a government committee chaired by the US Treasury secretary, the Stablecoin Certification Review Committee, will evaluate those state regulatory regimes. Treasury’s April 3 proposal would allow states to differ in form or procedure from the federal regulatory framework but still be substantially similar.

It would largely require states to follow the substantive provision of the Act but allow for some state-level modifications. The Treasury proposal provides a helpful mapping of which GENIUS Act provisions the proposal would allow for some amount of state-specific calibration. State rules must also provide for a stablecoin issuer to transition from state oversight to federal oversight once an issuer reaches $10 billion in outstanding payment stablecoin issuance.

WHAT IS LEFT FOR GENIUS ACT IMPLEMENTATION?

Even with the flurry of activity from the financial agencies, there is much to be done before the GENIUS Act becomes effective—the Act’s effective date is no later than January 18, 2027. Time is running short. The financial agencies must finalize each of the six rules proposed to date. The FDIC and OCC regulatory proposals, if issued, would complete their obligations under the GENIUS Act. The other agencies, including the Federal Reserve Board (FRB), has yet to issue a proposal, still have additional rules to propose. We then should expect significant additional activity on GENIUS Act implementation, including:

• The FRB will have to cover both licensing and substantive GENIUS Act compliance (whether in one proposed rule or two).
• Treasury still has a number of open items that could be the subject of additional regulatory proposals, including the following:
  • Implementing the Act’s prohibition on unlawful issuance of the payment stablecoin to a US person under 12 USC 5902, see 12 USC 5902(d)
  • Setting the criteria that noncompliant foreign issuers must meet to come into compliance with the Act, under 12 USC 5907, see 12 USC 5907(a)(3)(B)
  • Setting the rules to define the criteria and process by which a foreign payment stablecoin issuer or a foreign stablecoin regulator can request a reciprocity determination that would allow them to issue payment stablecoins to persons in the US, under 12 USC 5916, see 12 USC 5916(b)(6)
• FinCEN is likely to propose additional rules related to PPSIs’ AML/CFT obligations, including customer identification programs, and possibly innovative methods to address AML/CFT
• NCUA will need to issue a substantive proposal on GENIUS Act compliance; expect it to mirror much of the language in the OCC and FDIC proposals
• Stablecoin Certification Review Committee, a new body created by the Act that is chaired by the Treasury secretary, is tasked with setting rules clarifying the application of provisions governing a non-financial public company issuing a payment stablecoin under 12 USC 5903(a)(12), see 12 USC 5903(a)(12)(D)

For additional analysis, read OCC’s GENIUS Act Proposal: What Prospective Issuers Need to Know and GENIUS Act AML/CFT and Sanctions Framework: Key Compliance Requirements for Stablecoin Issuers.

CLOSING

For institutions exploring becoming a stablecoin issuer under the GENIUS Act, these proposed rules provide the contours of the regulatory framework and requirements, including submitting an application to the appropriate payment stablecoin regulator demonstrating the institution’s ability to comply with the requirements of the Act and the implementing regulations.

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