Structural choices for GENIUS Act issuers

Of the myriad structural choices facing a prospective GENIUS Act stablecoin issuer, the most significant is between depository and non-depository options. I see three key differences between these categories (though some play out differently for new issuers vs. existing ones.)

1️⃣ Capabilities

The stablecoin issuance powers of the two categories are similar. But depository institution options provide additional capabilities such as:

• Federal Reserve master account eligibility,
• Cleaner preemption of multi-state money transmission and custody licensing, and
• The prospect of engaging in a wider range of non-stablecoin digital asset service provider activities.

2️⃣ Regulation

From any given regulator, I doubt depository and non-depository issuers will see much difference in supervision of stablecoin activities. But there can be major differences in what other laws and regulations apply by virtue of the charter itself. This is especially true for National Trust Banks, which are subject to quite a few banking regulations that won't necessarily apply to other federal issuers.

3️⃣ Timing

For new issuers, depository options offer a chance to get started on an application before the GENIUS Act application window opens. This is because the depository charters are available under both pre- and post-GENIUS Act frameworks and don't depend as much on rulemaking under § 5 of the Act.

A prospective issuer that waits for the rulemaking faces a crowded applicant queue and no opportunity to move the ball forward with the regulator in the meantime. My best guess: the earliest they could expect approval is somewhere between the end of 2026 and mid-2027.

The calculus is different for existing issuers, who can take advantage of the GENIUS Act's various transition provisions. Though it's notable that several major incumbents already operate state trust companies and recently applied for National Trust Bank charters.