Companies launching a branded dollar stablecoin must first determine which legal entity handles redemption—a choice that dictates whether they pursue federal permitted issuer status or partner with an existing issuer.
The GENIUS Act establishes the U.S. framework for payment stablecoins, defining them by the issuer's obligation to redeem, convert or repurchase the asset at a fixed monetary value. Once effective, most businesses must qualify as permitted issuers to operate domestically.
The prior-approval requirement kicks in January 18, 2027. The Office of the Comptroller of the Currency (OCC) is not yet accepting applications or waiver requests as of November 10.
New entrants must obtain full approval before launch. Existing U.S. issuers with substantially complete applications by January 18, 2027 receive different treatment, though a pending application alone does not grant permission to operate.
Two regulatory routes exist. The federal path requires nonbank fintech firms, uninsured national banks, and eligible federal branches to apply to the OCC. Insured depository institutions must apply to their primary federal regulator to issue through a subsidiary. A fintech company with a banking relationship does not automatically become that bank's subsidiary.
The state route applies to issuers with no more than $10 billion in consolidated outstanding issuance across all tokens, not annual volume or single-brand sales. State regimes must substantially mirror the federal framework. The Treasury certifies the state's regulatory regime; individual issuer approval remains separate.
Founders weighing state supervision must verify both the state's regime and individual approval status with their proposed regulator. If an issuer exceeds the $10 billion threshold, the GENIUS Act mandates federal transition within 360 days unless a waiver is granted.
