Will Payment Stablecoins Mean The End Of State Money Transmitter Licensing?

The GENIUS Act (Act) allows "permitted payment stablecoin issuers"—which term includes nonbanks that are either Federal qualified payment stablecoin issuers (FQPSI) (regulated by the OCC) or State qualified payment stablecoin issuers (SQPSI) (regulated by their qualifying state)—to:

1. Issue and redeem payment stablecoins;
2. Manage reserves;
3. Custody payment stablecoins, reserves, or private keys of payment stablecoins; and
4. Engage in activities that "directly support" the above listed activities.

While it's a little early to predict the end of state money transmitter licensing as we know it, the broad language of the Act raises some beguiling issues for fintech companies currently deemed to be money transmitters—such as remittance companies, bill payment companies, and issuers of prepaid cards or payment instruments. As we will explore in further detail in our upcoming client alert, the ability of appropriately qualified non-banks to issue payment