Stablecoins After the GENIUS Act, Part 3: Do You Still Need Money Transmitter Licenses?

The sentiment editorial Part 3 of “Stablecoins After the GENIUS Act: A Practical Legal Guide for Businesses” written beneath was written by Michael Handelsman for Kelman.Law.

The GENIUS Act creates a national model for issuing outgo stablecoins, but it does not destruct money-transmission regularisation for each concern that handles them. Exchanges, wallets, outgo processors, and remittance companies whitethorn inactive request to registry with the Financial Crimes Enforcement Network arsenic wealth services businesses and get authorities wealth transmitter oregon virtual-currency licenses.

The applicable question is not simply whether a institution uses a stablecoin issued by a regulated entity. It is whether the institution itself accepts, controls, exchanges, oregon transmits worth for customers—and which entity performs each step.

The GENIUS Act and money-transmission laws modulate antithetic activities

As discussed in Part 1 of this series, the GENIUS Act principally determines who whitethorn contented a outgo stablecoin and the reserves, redemption procedures, supervision, and different requirements applicable to issuers.

Money-transmission laws code whether a concern accepts wealth oregon different worth from 1 idiosyncratic and transmits it to different idiosyncratic oregon location. Under FinCEN’s virtual-currency guidance, worth that substitutes for currency tin see convertible virtual currency. FinCEN mostly treats administrators and exchangers that judge and transmit convertible virtual currency arsenic wealth transmitters unless an exemption oregon regulation applies. A idiosyncratic simply utilizing virtual currency to bargain goods oregon services is treated differently.

A institution whitethorn truthful look 3 abstracted questions:

1. Is it issuing a outgo stablecoin and required to go a permitted outgo stablecoin issuer?
2. Is it an MSB taxable to national Bank Secrecy Act requirements and FinCEN registration?
3. Does it request licenses nether the laws of the states wherever it conducts concern oregon serves customers?

Satisfying 1 furniture does not automatically fulfill the others. FinCEN registration is simply a national registration, not a nationwide authorities license.

What the GENIUS Act preempts—and what remains unresolved

The Act contains meaningful state-law preemption, but its scope matters. Under 12 U.S.C. § 5904(h), authorities charter, license, oregon different authorization requirements are preempted with respect to a national qualified outgo stablecoin issuer, oregon an approved subsidiary of an insured depository instauration oregon recognition union, that becomes a permitted outgo stablecoin issuer.

That extortion applies to an approved issuer. It does not accidental that each exchange, distributor, wallet, outgo company, affiliate, oregon contractor moving with the issuer is exempt from authorities licensing. Nor should businesses presume that it covers each further enactment an issuer mightiness conduct.

The OCC recognized those unresolved boundaries successful its October 2026 last GENIUS Act rule. Commenters requested clarification astir preemption for third-party work providers and issuers conducting further activities. The OCC declined to follow a wide interpretation, explaining that immoderate issues should beryllium evaluated individually arsenic peculiar facts arise.

The regularisation besides addresses the request for autarkic ineligible authorization for further digital-asset services. The OCC would not state each wallet oregon money-transmission enactment permissible based lone connected issuer status. Issuance and redemption are permissible issuer activities, portion broader services necessitate person examination. The OCC’s implementation bulletin identifies January 18, 2027 arsenic the effectual day of some the Act and its main OCC rule; these aboriginal protections bash not warrant abandoning existing licensing obligations today.

State-qualified issuers travel a antithetic structure. Under 12 U.S.C. § 5906, qualifying issuers operating nether a certified authorities authorities person extortion from duplicative host-state issuer licensing, taxable to statutory conditions. Home-state instrumentality whitethorn govern definite activities successful different states. The Act nevertheless preserves applicable authorities consumer-protection laws and common-law remedies.

A abstracted provision, 12 U.S.C. § 5915(d), permits qualifying state-chartered depository institutions to behaviour wealth transmission oregon custody done a permitted-issuer subsidiary crossed authorities lines, taxable to superior and liquidity conditions. Host-state consumer-protection oversight remains relevant. That pathway should not beryllium generalized to nonbank fintechs.

How the investigation applies to communal stablecoin businesses

For an exchange, the cardinal questions see whether it buys, sells, converts, holds, oregon transmits stablecoins for customers. The information that different institution issues the token does not resoluteness the platform’s ain regulatory status.

Hosted wallets likewise necessitate introspection of custody and transportation functions. A supplier that controls lawsuit assets and sends them to destinations selected by customers presents antithetic facts from a institution that simply distributes software. Kelman PLLC’s nonfiction on noncustodial crypto businesses and wealth transmitter licensing explains however betterment authority, integrated swaps, and administrative controls tin impact that analysis.

For remittance businesses, replacing a accepted colony method with stablecoins mostly does not alteration the underlying function: accepting worth from a sender and arranging transportation to a recipient. Counsel should analyse the full transaction, including fiat collection, token conversion, cross-border transfers, and section payout.

Payment processors should beryllium peculiarly cautious astir exemptions. In its payment-processor administrative ruling, FinCEN identified conditions including outgo for goods oregon services, usage of a clearance and colony strategy admitting lone BSA-regulated fiscal institutions, and an due statement with the seller oregon creditor.

Consider a processor that collects stablecoins into a wallet it controls, deducts a fee, and sends the equilibrium to merchants. That statement requires a antithetic investigation from checkout bundle that displays a merchant’s wallet code portion the lawsuit pays the merchant directly. A merchant statement unsocial does not found the national exemption, and public-blockchain colony requires peculiar attraction to the clearance-and-settlement condition.

State licensing requires its ain analysis

State statutes bash not usage identical definitions, exclusions, oregon exemptions. Some states modulate virtual-currency enactment done money-transmission laws; others support abstracted digital-asset licensing regimes.

New York illustrates the distinction. The Department of Financial Services’ virtual-currency licensing guidance explains that galore stablecoins autumn wrong the BitLicense regulation. A concern conducting virtual-currency activities and transmitting fiat whitethorn request some a BitLicense and an Article 13-B wealth transmitter license. A New York limited-purpose spot institution whitethorn person broader authority. DFS besides confirms that FinCEN registration does not find whether a BitLicense is required.

Businesses should truthful measure each enactment successful each applicable jurisdiction. A spouse statement should place the licensed entity, its authorized services, the company’s ain role, and immoderate conditions supporting an exemption. Describing a narration arsenic a concern oregon bureau statement does not, by itself, resoluteness licensing.

FinCEN requirements are besides changing

Under 12 U.S.C. § 5903(a)(5), permitted outgo stablecoin issuers volition beryllium treated arsenic fiscal institutions nether the Bank Secrecy Act. The statute addresses AML programs, recordkeeping, suspicious-transaction monitoring, lawsuit identification, owed diligence, sanctions compliance, and transaction-blocking capabilities.

As of November 3, 2026, FinCEN’s specialized AML and sanctions regularisation for permitted issuers and the agencies’ customer-identification rule stay proposals. They should pass readying without being described arsenic effectual last requirements. Existing BSA obligations proceed to necessitate attraction portion the issuer-specific model is completed.

A utile reappraisal begins with transaction diagrams, wallet permissions, lawsuit agreements, and supplier contracts. Identify who receives value, directs transfers, converts assets, and bears work erstwhile colony fails. Then measure national MSB status, authorities licensing, and issuer support separately.

Frequently asked questions

Does partnering with a regulated issuer destruct our licensing requirements?
Not automatically. A abstracted level that accepts, exchanges, holds, oregon transmits lawsuit assets needs its ain analysis.

Does FinCEN registration regenerate authorities licenses?
No. Federal registration and authorities authorization code antithetic requirements.

Does a noncustodial wallet request a license?
The reply depends connected its existent functions and controls. Software organisation differs from operating swaps, payments, custody, oregon settlement.

Can an existing MTL authorize issuance nether the GENIUS Act?
An mean MTL does not automatically found permitted outgo stablecoin issuer status. Businesses indispensable corroborate the approvals required nether the caller framework.

Kelman PLLC advises digital-asset businesses on MSB, BSA, AML, and authorities licensing issues. Companies processing stablecoin payment, exchange, wallet, oregon remittance products can interaction the firm to sermon however their transaction flows impact national and authorities requirements.

Attorney Advertising. This nonfiction provides wide information, not ineligible advice. Contacting the steadfast does not found an attorney-client relationship. This nonfiction provides wide information, not ineligible advice. Contacting the steadfast does not found an attorney-client relationship.