Who may issue a payment stablecoin in the United States under the GENIUS Act?
Only a permitted payment stablecoin issuer may issue a payment stablecoin in the United States, and it is unlawful for anyone else to do so (12 U.S.C. 5902(a)). A permitted issuer must be formed in the United States and fall into one of three categories.
What the rule says: • A permitted payment stablecoin issuer is a person formed in the United States that is a subsidiary of an insured depository institution approved under section 5904, a Federal qualified payment stablecoin issuer, or a State qualified payment stablecoin issuer (12 U.S.C. 5901(23)). • A Federal qualified issuer is a nonbank entity (other than a State qualified issuer), an uninsured national bank chartered by the Comptroller, or a Federal branch, each approved by the Comptroller under section 5904 (12 U.S.C. 5901(11)). • A State qualified issuer is legally established under State law and approved by a State payment stablecoin regulator. It cannot be an uninsured national bank chartered by the Comptroller, a Federal branch, an insured depository institution, or a subsidiary of any of those (12 U.S.C. 5901(31)). • A foreign payment stablecoin issuer is an issuer organized under the laws of or domiciled in a foreign country, a territory of the United States, Puerto Rico, Guam, American Samoa, or the Virgin Islands, and that is not a permitted payment stablecoin issuer (12 U.S.C. 5901(12)). • Section 5902 is intended to have extraterritorial effect where conduct involves the offer or sale of a payment stablecoin to a person located in the United States (12 U.S.C. 5902(e)). • Whoever knowingly participates in a violation of the issuance prohibition faces a fine of up to $1,000,000 per violation, up to 5 years in prison, or both (12 U.S.C. 5902(f)(1)).
In practice: • Identify which path fits your entity: insured depository institution subsidiary, Federal qualified issuer (nonbank, uninsured national bank or Federal branch), or State qualified issuer. • Confirm you are formed in the United States and that the required approval is in place before issuing. For insured depository institution subsidiaries and Federal qualified issuers, that approval comes under section 5904. For State qualified issuers, it comes from a State payment stablecoin regulator. • Treat safe harbors as narrow. They depend on Treasury regulations that are limited in scope and cover a de minimis volume of transactions, or on a Treasury determination of unusual and exigent circumstances (12 U.S.C. 5902(c)).
Check separately what section 5904 approval requires and how the offer and sale rules for digital asset service providers apply to you.
Sources
- 12 U.S.C. 5902: https://www.law.cornell.edu/uscode/text/12/5902
- 12 U.S.C. 5901: https://www.law.cornell.edu/uscode/text/12/5901
This answer is general information, not legal advice. Forteris is not a law firm.
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