How to Become a Permitted Payment Stablecoin Issuer Under the GENIUS Act

To become a permitted payment stablecoin issuer under the GENIUS Act, a US-formed company applies to the OCC as a federal qualified issuer, applies through an insured bank or credit union for a subsidiary to be approved by that institution's federal regulator, or applies to a certified state regulator while its coins in circulation stay at or below US$10 billion. The Act takes effect on 18 January 2027. The regulator must say within 30 days whether the application is substantially complete and decide within 120 days after that, or the application is deemed approved.

This guide sets out who needs approval, which route fits which firm, what the application contains, and a working timetable to 18 January 2027 for firms that want to be approved, or at least pending, on the day the Act takes effect.

Who needs to be a permitted payment stablecoin issuer

From 18 January 2027 it is unlawful for any person other than a permitted payment stablecoin issuer to issue a payment stablecoin in the United States. A payment stablecoin is a digital token designed for payment or settlement that the issuer must redeem for a fixed amount of money, such as one dollar, and whose value the issuer says it will keep stable. Bank deposits, including tokenised deposits, national currencies and securities fall outside the definition.

Knowingly taking part in unlawful issuance carries a fine of up to US$1 million for each violation, up to five years in prison, or both. Treasury's proposed rule of 18 August 2026 treats a coin as issued in the United States if the issuer is located there or issues to a person located there, and it treats a free promotional airdrop to a US user as an issuance. Firms already issuing to US users therefore need a plan in place before the effective date, not after it.

The full page on US payment stablecoin issuer approval under the GENIUS Act covers every obligation in detail. This article focuses on getting approved.

The effective date is fixed at 18 January 2027

The Act takes effect on the earlier of 18 months after enactment, which is 18 January 2027, or 120 days after the federal regulators issue final implementing rules. As at 20 October 2026 every issuer rule remained a proposal, so any final rule issued now starts a 120-day period ending after 18 January 2027. The outside date therefore governs.

Two provisions shape the run-up. First, the Act tells regulators to accept and process applications under their rules. Second, section 5(f) lets the federal regulators waive the Act's requirements for up to 12 months from the effective date for a bank subsidiary or federal qualified issuer whose application is pending on that date. Treasury's proposal carries that waiver into the issuance and sale prohibitions. A firm already issuing that has a complete application on file before 18 January 2027 is in the strongest position to keep operating while it is decided.

Choosing your route

The route depends on what the applicant is, not on preference alone. Every route leads to the same status and the same core obligations: reserves, monthly reporting, anti-money laundering controls and the ban on paying interest.

The OCC route gives one federal supervisor and pre-emption of state charter and licence requirements for the approved issuer under section 5(h). The state route keeps supervision local but caps growth. Once outstanding issuance passes US$10 billion, the issuer has 360 days to move to the federal framework or must stop issuing new coins until it is back under the cap, unless the federal regulator grants a waiver. A state regime only qualifies once its regulator certifies it as substantially similar to the federal framework, and states have until 18 January 2028 to submit that certification.

For many nonbank firms the question is whether to pair the OCC issuer approval with a national trust bank charter. We compare that choice with state licensing in OCC national trust charter or state money transmitter licences.

What the application contains

The Act lists the factors every regulator must weigh: the applicant's financial condition and resources to meet the issuer requirements, whether any officer or director has a disqualifying felony conviction, the competence, experience and integrity of officers, directors and principal shareholders, whether the redemption policy meets the statutory standard, and any other safety and soundness factor the regulator sets.

The OCC's proposed application forms, published for comment on 27 July 2026, translate those factors into a filing:

• An overview of the applicant and its group
• A detailed business plan, including the proposed activities and why each is permissible
• The reserve policy: asset types, custodians, concentration limits and how the monthly report will be produced
• The redemption policy, with timing, minimum amounts and every fee
• The risk management programme, covering operations, technology, liquidity, interest rate risk and third parties
• The Bank Secrecy Act, anti-money laundering and sanctions programme, including how tokens can be blocked and frozen
• An Interagency Biographical and Financial Report for each director, executive officer and principal shareholder
• A certification that the filing contains no material misrepresentation or omission

The OCC estimated 50 applicants a year. Expect the same core content from the Federal Reserve, FDIC and NCUA, each of which has published its own proposal.

The standards your application must prove you can meet

Regulators approve applicants that can show, on paper and in systems, that they will meet section 4 of the Act from the first day. The table sets out the standards most often underestimated.

A false monthly certification carries criminal penalties. That makes the reconciliation between on-chain supply and the reserve ledger a board-level control, not a back-office task.

The decision process and timetable

Once filed, the statutory clock is short and the deemed approval is real. The regulator must tell the applicant within 30 days whether the application is substantially complete and, if not, exactly what is missing. It then has 120 days to decide. An application may be denied only if the activities would be unsafe or unsound under the statutory factors, and issuance on an open, public or decentralised blockchain is expressly not a ground for denial.

If the regulator denies, it must explain the decision with specific findings and recommendations within 30 days. The applicant may ask for a hearing within 30 days, the hearing is held within 30 days of the request, and a final determination follows within 60 days of the hearing. A denied applicant may reapply.

A working plan to 18 January 2027

Counting back from the effective date, a firm that wants an application pending on 18 January 2027 has roughly three months from the date of this article. A realistic sequence is:

• October and November 2026: confirm the route and regulator, form or reorganise the US issuer entity, and screen every officer, director and principal shareholder
• November 2026: finalise the reserve policy, custodians and accountant engagement, and the redemption policy and fee schedule
• November and December 2026: complete the business plan, risk management programme and BSA and sanctions programme, and run a test of monthly reserve reporting
• December 2026: file, then answer the completeness review within the 30-day window
• January 2027 onward: respond to requests while operating under any waiver granted for pending applications

The OCC said on 19 August 2026 that it expected its final rule by November. When it lands, update the filing to match. Do not wait for it to start.

Foreign issuers and global groups

A group outside the United States has two options. It can form a US issuer and apply on one of the routes above, or it can stay offshore as a foreign issuer. The foreign route needs a Treasury determination that the home regime is comparable to the GENIUS Act, registration with the OCC, which is deemed approved after 30 days unless rejected, reserves in a US financial institution sufficient for US customers' liquidity needs, and consent to US jurisdiction. Treasury has 210 days to decide a complete comparability request. No determination had been published as at 20 October 2026.

Groups also licensed in Britain or Europe should plan the coin once for all three markets. See our guides to UK stablecoin regulation in 2026 and to what the GENIUS Act means for exchanges and custodians that will list the coin.

Licences that still sit alongside issuer approval

Issuer approval covers issuing and redeeming the coin and the activities that directly support it. Wallets, payouts and money movement run by affiliates outside the issuer may still need state money transmitter licences and FinCEN MSB registration. Map every entity and activity in the group before filing, so the issuer approval and the remaining licences describe one consistent business.