The Two-Step Path to Launching a GENIUS Act–Compliant Stablecoin Launching a regulatory-compliant stablecoin under the GENIUS Act is a complex process that involves two separate but interlinked approvals: Step 1: Obtaining a National Trust Bank Charter from the OCC Step 2: Securing approval as a Permitted Payment Stablecoin Issuer under the GENIUS Act This sequence ensures that your entity is both a federally supervised bank and a legally recognized stablecoin issuer under the new framework. Let's break it down in a🧵

2/ Step 1 — Obtaining an OCC National Trust Bank Charter The Office of the Comptroller of the Currency (OCC) charter is the foundation of your regulatory standing. For a de novo stablecoin issuer, this will typically be an uninsured national trust bank charter, which authorizes fiduciary and custodial activities, including holding reserves and issuing payment stablecoins.

3/ Pre-Filing Engagement Early contact with the OCC—through its Office of Innovation or Licensing Division—is essential. In this “pre-filing meeting,” you will outline your business concept, demonstrate alignment with GENIUS Act requirements and OCC safety and soundness principles, and receive feedback on potential red flags. Early buy-in from OCC staff can significantly smooth the path forward.

4/ Charter Application Package Your formal submission, via the Interagency Charter Application form tailored for an uninsured trust bank, must include: - Three-year business plan with detailed projections, product descriptions, target markets, growth assumptions, and risk mitigations. - Capital plan covering the amount, form, investor commitments, and adequacy under stress scenarios. - Management and governance documentation, including resumes, background checks, organizational chart, and governance framework. - Risk and compliance frameworks such as AML/BSA, cybersecurity, operational risk policies, and board oversight structures. - Analysis showing permissible activities under the National Bank Act and GENIUS Act. - Narrative on public benefit and financial inclusion objectives. - Statement of commitment to supervision, reporting, and examination requirements.

5/ Review and Conditional Approval The OCC will evaluate the application against statutory factors and may issue conditional approval requiring pre-opening actions such as raising capital, hiring key executives, adopting OCC-approved policies, and entering a supervisory agreement. OCC examiners will review operational readiness, staffing, systems, and compliance programs before granting final charter approval.

6/ Step 2 — Approval as a Permitted Payment Stablecoin Issuer (GENIUS Act) Even with a bank charter, you must separately obtain approval as a Federal Qualified Payment Stablecoin Issuer under the GENIUS Act. This confirms that your stablecoin meets statutory reserve, redemption, and consumer protection standards.

7/ Application Components Whether filed separately or with the charter application, the submission must cover: - Reserve management showing 1:1 eligible asset backing, daily valuation, segregation of assets, and issuance controls. - Redemption policy and terms of service committing to timely par redemption, retail redemption pathways, plain-language disclosures, and insolvency priority for holders. - Compliance with statutory consumer protections, including no interest, no false government backing claims, and clear risk disclosures. - AML/BSA and risk management programs aligned with Act requirements, including sanctions screening and cybersecurity standards. - Leadership with both banking and payments/crypto expertise, supplemented by advisors if needed. - Contingency and wind-down plan ensuring orderly redemption and reserve liquidation.

8/ Regulatory Coordination The OCC will lead the review but may coordinate with Treasury and the interagency Stablecoin Oversight Committee. Approval may include operational conditions such as issuance limits or enhanced early-stage reporting.

9/ Documentation, Testing, and Launch Readiness Before launch, finalize: - CPA audits or attestations verifying capitalization and systems, with a schedule for monthly reserve attestations. - Board-approved policies for AML, cybersecurity, operational risk, and redemption procedures. - Evidence of system testing, including smart contract audits, penetration tests, and stress simulations. - Governance records of board decisions and approvals. - Execution of all regulatory agreements and satisfaction of OCC conditions. Only after both charter approval and GENIUS Act issuer approval can you begin issuing your stablecoin under federal law.

10/ Why the Two-Step Model Matters This dual-approval model provides layered oversight. The OCC charter ensures the entity is a regulated bank-like institution, while GENIUS Act issuer approval ensures the stablecoin product itself meets strict operational and consumer protection requirements. Together, they create a structure that builds trust with regulators, market participants, and end-users. Link in the comments to my blog post ⬇️

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