Stablecoin Issuers Face Operational Test Before 2027

Stablecoin issuers in the US are facing a five-month preparation window before the GENIUS Act's expected effective date of January 18, 2027. The law requires issuers to obtain federal or state licenses for market access.

The hardest part will be building integrated compliance systems that work together under daily operating conditions, according to Patrick Gerhart, president of Telcoin Digital Asset Bank. Gerhart notes that regulators will expect issuers to demonstrate how their controls operate as a single system, including customer identification, transaction monitoring, reserve management, and redemptions.

Under the GENIUS Act, federally supervised issuers and qualifying state-regulated companies will have separate regulatory paths. Issuers exceeding $10 billion in consolidated outstanding stablecoins generally fall under federal supervision. The Office of the Comptroller of the Currency is expected to finalize its rules by November, giving issuers about two months before the January 18 deadline.

Telcoin's experience provides insight into the work involved in securing a license. The company spent years preparing its banking model and working with state regulators to explain how its technology operated and determine how existing banking requirements applied to the business.