A Guide to Launching a Stablecoin Under the GENIUS Act
This GENIUS Act stablecoin guide offers a detailed roadmap for launching a stablecoin under the GENIUS Act in 2025 and beyond. From entity formation to reserve management, OCC chartering, and post-launch compliance, this resource equips founders and policymakers with the knowledge to navigate America’s first federal stablecoin framework. Here’s a GENIUS Act compliance checklist:
1. Introduction to the GENIUS Act
The Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act) of 2025 establishes the first federal framework for payment stablecoins. Only OCC-approved Permitted Payment Stablecoin Issuers can legally issue stablecoins in the U.S. Complying ensures the stablecoin is not treated as a security or commodity, placing oversight with banking regulators instead of the SEC or CFTC.
2. GENIUS Act: Entity Formation and Legal Structure
Form a U.S.-based C-Corp or LLC as a holding company.
Seek a National Trust Bank Charter from the OCC for federal issuance authority.
Choose a jurisdiction (often Delaware) for incorporation; OCC chartering provides nationwide authority.
Prepare Articles of Association, Organization Certificate, and OCC charter application.
Assemble an experienced board and executive team with expertise in banking, payments, compliance, and cybersecurity.
3. Stablecoin: Reserve Design and Management
GENIUS Act-compliant stablecoins must be backed 1:1 by high-quality, liquid reserve assets, such as:
U.S. dollars and Federal Reserve Bank balances
Short-term U.S. Treasuries (93 days or less)
Government money market funds holding primarily Treasuries
Reserves must be segregated from operating funds, held with regulated custodians, and never rehypothecated except in limited redemption liquidity scenarios. Issuers must:
Maintain liquidity buffers for prompt redemptions
Publish monthly reserve reports and undergo independent audits
Ensure bankruptcy-remote protections for holders
4. GENIUS ACT Stablecoin: Terms of Service and Consumer Protection
Your stablecoin must have:
Guaranteed 1:1 redemption at par value
Clear, conspicuous redemption procedures
No interest or yield to holders (avoiding security classification)
Plain-language risk disclosures (not FDIC insured, not legal tender)
Priority claim rights for holders in insolvency scenarios
5. Stablecoin Technical Implementation
Smart Contract Design
Mint and burn controls linked to reserve verification
Optional freeze/pause functions for compliance
Security audits by reputable blockchain firms
Key Management
Multi-signature or MPC for mint authority
HSM-secured private keys
Full transaction logging and monitoring
Blockchain Network Selection
Choose a secure, widely adopted blockchain (Ethereum mainnet, L2, or alternative L1) balancing decentralization, throughput, and interoperability needs.
6. Stablecoin Risk Management & Compliance
Implement a BSA/AML program with CDD/KYC, sanctions screening, SAR filing, and blockchain analytics monitoring.
Adopt cybersecurity frameworks following FFIEC guidelines, including incident response and disaster recovery plans.
Maintain vendor due diligence and internal audit programs.
7. GENIUS ACT Stablecoin OCC Charter Application Process
Pre-filing engagement with OCC
Submit Interagency Charter Application with business plan, capital plan, governance, and risk management framework
Receive conditional approval, meet organizational requirements, and pass pre-opening examination
8. GENIUS Act Issuer Approval
Submit reserve management, redemption policies, risk/compliance programs, and leadership credentials
Provide contingency wind-down plan
Address state-level requirements (if applicable)
9. Pre-Launch Testing Stablecoins Under the GENIUS Act
Conduct operational dry runs
Consider a regulator-observed pilot phase
Finalize readiness with OCC supervisory checks
10. Post-Launch Obligations for Stablecoins Under the GENIUS Act
Publish monthly reserve reports and annual audits (if circulation exceeds $50B)
Comply with evolving prudential standards, capital and liquidity requirements
Engage in regular OCC examinations and event reporting
Maintain marketing compliance (no government guarantee implication)
Conclusion: Launching a GENIUS Act-compliant Stablecoin
Launching a GENIUS Act-compliant stablecoin is a complex but achievable process that transforms a startup into a regulated financial institution. By following each step — from formation and reserves to compliance and OCC engagement — issuers can deliver a trusted, legally sound, and innovative stablecoin to market.