The GENIUS Act of 2025 (Public Law 119-27) establishes who may issue a payment stablecoin in the United States, how it must be backed and how it must be disclosed. It takes effect on the earlier of 18 months after its enactment on July 18, 2025, or 120 days after final regulations are issued. The Treasury refers to January 18, 2027 as the expected effective date. For a bank, that date is close enough to plan around and far enough to do the work properly.
This checklist is written for directors and senior management. It covers what the Act requires, where the rulemaking stands, five decisions the board should make, and a timeline for making them.
What the Act requires of an issuer
- Permitted issuer status. Only permitted issuers may issue payment stablecoins. For a bank that means a subsidiary approved by its federal regulator. We explain the routes in what is a permitted payment stablecoin issuer.
- Reserves of at least one to one in the asset types the Act permits, identifiable and kept apart from operating funds.
- A monthly reserve report examined by a registered public accounting firm and published.
- Certification of that report by the chief executive officer and the chief financial officer.
- Redemption at par under a clear, published policy, and no interest or yield paid to holders.
- Bank Secrecy Act obligations as a financial institution, including sanctions compliance.
Where the rulemaking stands
Each federal agency has now proposed rules for the issuers it will supervise. The OCC published its proposal on February 25, 2026. The FDIC issued application procedures on December 16, 2025 and requirements and standards on April 7, 2026. The Treasury followed on August 17, 2026, and the Federal Reserve Board on September 24, 2026.
All of these were published as proposals and are subject to comment. They are detailed enough to plan against, and a bank that drafts its policies to the proposed text will have little to change when the final rules arrive. Our bank-by-regulator guide to the proposed rules sets out which docket applies to which charter.
Five decisions for the board
1. The instrument for each job
A payment stablecoin is designed for open-network and cross-border payments. A tokenized deposit is designed for cash management and settlement among your own customers, and stays on your balance sheet as a deposit. Most banks need both. We cover the distinction in detail here.
2. Where supply comes from
Designs that create tokens in advance give the issuer a stock of tokens to guard and reconcile for as long as the product exists. A just-in-time model mints only after funds are confirmed, directly to the customer, and burns at redemption. Supply equals confirmed backing by construction, which simplifies both the monthly reserve examination and the classification memo.
3. Who holds the freeze switch
Regulators will ask how the bank can stop a transaction, and whether an automated system can lock a customer out indefinitely. The answer should be that the bank's officers hold the control, with an independent key, and that any automated hold expires unless a person confirms it.
4. What the customer experiences
If moving between a tokenized deposit and a stablecoin requires a bridge wallet or an escrow step, that step is a place for something to go wrong. Atomic conversion, a single burn and mint in the customer's wallet, gives the customer one coin and gives the bank two clearly classified instruments.
5. How it connects to what you already run
Backing funds should move over rails you already use: RTP, FedNow, wire and book transfer. Your identity provider, your compliance officers and your core should remain the system of record. The ledger is an extension of the bank, not a second bank beside it.
"Your deposit franchise, extended to the ledger. Your liability, your customers, your key."
A timeline that works
- Fourth quarter of 2026. Board education, architecture review, and counsel engaged on the permitted issuer path and on the alternative of a tokenized deposit.
- First quarter of 2027. The Act's expected effective date. A pilot with tokenized deposits among existing customers on a permissioned network does not depend on the stablecoin rules.
- After final rules. A stablecoin application, with reserve examination, redemption and disclosure in place from the first day of issuance.
The order matters. A tokenized deposit can be offered under existing deposit law, and the FDIC's proposal confirms that insurance, which applies subject to ownership category and limits, does not depend on the technology used to record a deposit. Starting there lets the bank build the ledger, the controls and the customer experience before it takes on an issuer's obligations. See are tokenized deposits FDIC insured.
What to ask a provider
Whichever instrument comes first, the bank will rely on technology it did not build. Three points decide whether that reliance is acceptable to an examiner.
- Control. The bank holds a key that every material action requires. No provider can mint, move or freeze alone.
- Evidence. Every action is written to an append-only audit trail, including which automated system proposed it and which person approved it.
- Exit. The bank can leave with its customers' balances and records intact.
LedgerBridge's Regulated Money Platform was designed around this sequence, with two instruments on one compliance backbone. To review it against your charter, bring your counsel to a working session.
Frequently asked questions
When does the GENIUS Act take effect?
On the earlier of 18 months after its enactment on July 18, 2025, or 120 days after the primary federal regulators issue final implementing regulations. The Treasury refers to January 18, 2027 as the expected effective date. A separate restriction on offering stablecoins from issuers that are not permitted begins on July 18, 2028.
Can a bank issue a payment stablecoin?
Yes, through a subsidiary approved by the bank's primary federal regulator as a permitted payment stablecoin issuer. The subsidiary must hold reserves of at least one to one, publish a monthly reserve report examined by a registered public accounting firm, redeem at par and run a Bank Secrecy Act program. It may not pay interest to holders.
Does a bank have to wait for final rules to do anything?
No. A tokenized deposit for the bank's own customers falls under existing deposit law, because the Act's definition of payment stablecoin excludes deposits recorded using distributed ledger technology. Board education, vendor diligence and drafting of reserve, redemption and custody policies can also proceed against the proposed rule text.
What should a board decide first?
Which instrument does which job. Cash management and settlement among the bank's own customers point to a tokenized deposit, which stays on the balance sheet. Payments to counterparties outside the bank point to a stablecoin issued through a subsidiary. That decision determines the regulator's docket, the application and the technology required.
This article is general information, not legal advice. Consult your counsel on the application of the GENIUS Act and your regulator's rules to your charter.