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With the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act enacted into law last year, federal regulators are now required to implement its final rules by July 2026. Ultimately, these rules will create a legal framework for stablecoins, a unique form of cryptocurrency designed to maintain a steady value through pegs to a reserve asset.
Beginning in late 2025, federal regulators have proposed a series of rules on the GENIUS Act. Now that these initial proposals have been released, banks and payment companies planning to issue stablecoins have a clear roadmap for how they will be supervised.
However, this roadmap requires financial institutions to not only assess a complex web of rulemaking, but also necessitates them to determine whether they want to be supervised under the GENIUS Act’s federal or state-level licensing regime.
The bigger picture
The GENIUS Act attempts to bring stablecoin shadow banking into the light of supervision. This is reflected by the comprehensive approach being taken to its implementation, with five regulators — the Federal Reserve; Office of the Comptroller of the Currency (OCC); Federal Deposit Insurance Corporation (FDIC); National Credit Union Administration (NCUA); and Department of the Treasury — jointly responsible for developing rules governing stablecoin issuance and operations, prudential standards and anti-money laundering (AML), among others.
This is also reflected by the law’s licensing model, with the GENIUS Act establishing a tiered system for permitted payment stablecoin issuers (PPSIs). PPSIs with more than US$10bn in stablecoin tokens fall under federal supervision, whereas smaller PPSIs may operate under state regimes certified as substantially similar by the Stablecoin Certification Review Committee (SCRC), a body newly created by the law.
With the law’s July 2026 implementation deadline looming, regulatory momentum has accelerated in recent months. With the exception of the Federal Reserve, four regulators have published GENIUS Act proposals to date.
These proposals create a roadmap for eventual supervision of stablecoin issuers, with each proposal revealing key differences in the regulators’ respective supervisory remits.
Office of the Comptroller of the Currency (OCC)
The OCC proposal indicates that it will be responsible for supervising subsidiaries of national banks and federal savings associations, as well as federal qualified payment stablecoin issuers (FQPSIs) — a category that includes non-banks seeking a federal charter. Unlike other regulators, the OCC’s supervisory approach is designed as a standalone federal regime. It governs these entities through a prior approval process and direct, ongoing examinations. By providing a pathway for non-banks to receive a federal license, the OCC also acts as the primary supervisor for large-scale, national-first issuers who bypass the US$10bn state-level threshold entirely.
Federal Deposit Insurance Corporation (FDIC)
The FDIC’s proposal allows it to supervise subsidiaries of insured state non-member banks and state savings associations that intend to issue stablecoins. Its supervisory approach is rooted in the subsidiary-only mandate of the GENIUS Act, which prohibits banks from issuing stablecoins directly. The FDIC oversees these issuers through a formal application and notification procedure, ensuring that the stablecoin activities of a subsidiary do not jeopardise the safety and soundness of the insured parent bank.
National Credit Union Administration (NCUA)
Under its proposal, the NCUA’s authority is specifically limited to subsidiaries of federally insured credit unions (FICUs). Its supervisory approach is unique because it requires a joint-licensing application, where both the subsidiary and the parent credit union must be evaluated for competence and integrity. This ensures that the NCUA can supervise the full “issuing group” as a single unit.
Department of the Treasury
Proposals of the Department of the Treasury and its sub-agencies, the Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC), grant it a dual role as both the gatekeeper of the tiered licensing model and an enforcer of AML and sanctions compliance. Through the SCRC, the Department of the Treasury determines how state-level regimes are certified as "substantially similar" to federal rules, effectively deciding which states can legally host their own PPSIs. Through AML and sanctions oversight by FinCEN and OFAC, the Department of the Treasury also provides a mandatory supervisory floor for all PPSIs, regardless of their primary regulator.
The current landscape of proposed rules establishes a system of supervision for stablecoin issuers, where oversight is shared across a host of regulators. By distributing authority based on charter type and institutional size, implementation of the GENIUS Act will ultimately create an overlapping web of accountability for banks and payment companies.
This multi-regulator approach means banking and credit union regulators act as the primary prudential supervisors, ensuring that stablecoin issuance remains safely and soundly compartmentalised within subsidiaries, while the Department of the Treasury provides a unified security and certification regime that applies across both state-licensed and federally licensed PPSIs. The SCRC, in particular, ensures a consistency and alignment between state and federal licensing regimes by fostering continuous inter-agency collaboration.
Instead of siloed oversight, the existing strengths and specific remits of each regulator are leveraged to create a comprehensive supervisory structure designed to be both flexible enough to accommodate different business models and rigid enough to ensure that stablecoins function as a reliable and secure component of the US financial ecosystem.
For banks and payment companies, the roadmap to GENIUS Act supervision is now clearly defined by two distinct tracks: a standalone federal track for large-scale or national-first entities; and a state-level track for smaller entities that must pass muster on federal similarity criteria.
While the Federal Reserve’s specific standards for its member banks represent the final piece of this roadmap, existing proposals from the OCC, FDIC, NCUA and Department of the Treasury have already established the structural boundaries that will define supervision of stablecoin issuers for the foreseeable future.
Why should you care?
Overall, this comprehensive approach to full GENIUS Act implementation underscores a shift from stablecoins as niche, speculative assets to core financial infrastructure. By delegating supervision across multiple regulators, the federal government is embedding stablecoins into the existing safety-and-soundness banking framework, treating them as bank-like liabilities with corresponding safeguards. Banks and payment companies should care about the supervisory roadmap formed by these regulators’ recent proposals for a variety of reasons.
For one, it is now clear that the US$10bn state-versus-federal licensing threshold is no longer a theoretical idea — it is a hard line for financial institutions’ business models. Institutions now have the clarity needed to decide whether to pursue a federal license via the OCC or work within a state-level regime. If an institution wants to operate nationwide under a single federal regulator, it should start preparing for the OCC’s more stringent standards now. If an institution is unable to meet the federal threshold or prefers state-level supervision, it should ensure that local regulators are in alignment with the Department of the Treasury’s federal similarity criteria.
Regulators have also made clear that stablecoins cannot be issued directly by a bank or credit union. Instead, stablecoins must be issued through a subsidiary. More than just a legal distinction, this requires a total rethink of governance, capital allocation and internal reporting. Moving stablecoin activities into a separate entity takes months of corporate restructuring. With the GENIUS Act’s July 2026 implementation deadline fast approaching, financial institutions should ensure that they are prepared to migrate toward a subsidiary structure.
Additionally, financial institutions should ensure that they understand the Department of the Treasury’s role in stablecoin supervision. Regardless of which regulator oversees daily operations on the basis of charter type and institutional size, the Department of the Treasury has set a universal baseline for AML and sanctions compliance. By understanding FinCEN and OFAC requirements now, an institution can build its transaction monitoring and other internal compliance systems in line with federal standards, regardless of its specific license type.
While the Federal Reserve’s pending proposal is the final piece of the puzzle, it will not change the GENIUS Act’s overall roadmap for supervision. Financial institutions that analyse existing proposals can gain a first-mover advantage and be among the first to launch compliant stablecoin products. However, because final rules have yet to be published, financial institutions must assess the current proposals while also anticipating further changes before the law’s full implementation. Ultimately, these final rules will dictate which institutions can leverage stablecoins to capture new, highly efficient payment flows, and which will cede market share to more agile competitors.
By replacing uncertainty with a clear division of labor among state and federal regulators, this supervisory roadmap gives financial institutions the tools needed to update their business models and compliance systems when final GENIUS Act rules take effect in July 2026.
Next steps
As the deadline for GENIUS Act implementation approaches, banks and payment companies must move from high-level statutory analysis to operational preparedness. To ensure a seamless transition into the new supervisory landscape, strategy and compliance teams should consider the following steps:
- Finalise your licensing track. Determine whether projected stablecoin issuance volume justifies a federal license through the OCC or a state-level equivalent. If choosing the state track, evaluate which jurisdictions are most likely to meet "substantial similarity" certification criteria.
- Initiate corporate restructuring. Begin the legal and operational work to house stablecoin activities within a subsidiary. This includes establishing separate governance, capital allocations and internal reporting structures as required under the law.
- Standardise AML and sanctions protocols. Build your transaction monitoring and other internal compliance systems to meet the Department of the Treasury’s mandatory supervisory floor to ensure compliance regardless of licensing track.
- Conduct a supervisory gap analysis. Review existing proposals from the OCC, FDIC or NCUA that apply to your charter type and institutional size. Identify areas where your current risk management frameworks need to be strengthened to meet the direct examination or joint-licensing requirements of these regulators.
- Audit reserve asset management practices and custody arrangements. Align your reserve asset management practices with the specific prudential standards outlined in the recent proposals. Ensure that your custody arrangements provide the transparency and safety-and-soundness protections required for both bank and non-bank issuers.
- Monitor Federal Reserve rulemaking. Assign a dedicated team to track proposals from the Federal Reserve for its member banks. Conduct scenario-planning to understand how its final rules might impact your competitive position relative to non-bank issuers.
- Engage in the public comment process. Submit formal feedback on existing and future proposals from federal regulators before comment periods close. Seek to proactively influence the finalised GENIUS Act framework to ensure that it remains compatible with your business model.
