The GENIUS Act has changed how companies issuing, distributing or using stablecoins must plan their businesses, with the first broad compliance date expected on 18 January 2027.
The law, enacted on 18 July 2025, does not give every business a single three-year transition period. Section 20 generally makes it effective on the earlier of 18 months after enactment or 120 days after the primary federal payment stablecoin regulators publish final implementing regulations. A separate restriction covering certain offers and sales begins on 18 July 2028.
Treasury’s August 2026 proposal distinguishes between those dates. The later deadline does not remove existing legal obligations or requirements under other parts of the Act.
Implementation currently combines legislation with regulatory proposals. The OCC issued its principal proposal in February 2026, while the Federal Reserve published proposals on 24 September 2026 covering supervised issuers, reserves, capital, risk management, custody and applications. Businesses should prepare for proposed operational requirements while recognising that they remain proposals.
An interim final rule that took effect on 30 September 2026 introduced forms and procedures for certifying state regulatory regimes. However, acceptance of a certification depends separately on information-collection approval and notification from Treasury. Companies considering state supervision must therefore establish whether the relevant state process is actually operating.
The legal analysis depends on what a company does. Issuers face approval and prudential requirements. A payment stablecoin is assessed by its use for payment or settlement, the issuer’s obligation to redeem or repurchase it for a fixed monetary value, and representations or expectations that it will maintain a stable value. Its label alone is not decisive, while tokenised deposits and other excluded products require separate analysis.
Distributors and intermediaries face different obligations. The Act’s definition of a digital asset service provider covers specified activities involving exchange, transfers, custody and issuance-related financial services, subject to express exclusions. A platform may therefore have responsibilities relating to the stablecoins it offers even when another company issues them.
Companies holding stablecoins should review redemption access, reserves, custody arrangements, freezing powers and counterparty exposure. Those issues arise whether the tokens are used for operating costs, settlement or treasury management.
A business accepting stablecoins for its own goods or services is in a different position from a platform collecting customer funds and directing them to third-party merchants. FinCEN’s guidance on virtual-currency business models remains relevant to whether an activity amounts to money transmission. Using a regulated stablecoin does not automatically exempt the wider business from federal or state requirements.
Prospective issuers must also choose between structures involving approved subsidiaries of insured depository institutions, federally qualified issuers and state-qualified issuers. Eligible state-qualified issuers with no more than $10 billion in consolidated outstanding issuance may elect state regulation under a substantially similar regime. The $10 billion threshold concerns outstanding issuance, not total assets.
The Act requires reserves backing outstanding payment stablecoins on at least a one-to-one basis, restricts eligible reserve assets, and requires redemption policies and reserve reports. These rules affect banking, liquidity, accounting and customer documentation.
Partnership agreements should specify the legal issuer, control of minting and burning, responsibility for redemption, and arrangements if the relationship ends. Businesses preparing now should establish four workstreams, with named owners, dependencies and decision dates. Provider contracts, customer terms, banking arrangements and reserve systems may need to be aligned before an application or launch.
Accepting an existing stablecoin does not by itself require issuer approval. Nor can businesses generally wait until 18 July 2028, which concerns a specific offer-and-sale restriction. A regulated issuer’s authorisation also does not automatically cover a partner’s custody, transfers, customer relationships or contractual duties.
The guidance was written by Michael Handelsman for Kelman.Law. Kelman PLLC advises digital-asset businesses on MSB, BSA and AML issues. It is general information, not legal advice, and does not create an attorney-client relationship.
