GENIUS Act Does Not Exempt Stablecoin Businesses From State Licensing

The GENIUS Act establishes a federal framework for payment stablecoin issuers but does not exempt all businesses handling stablecoins from money-transmission regulation. According to Odaily, exchanges, wallets, payment processors and remittance companies may still need to register with the Financial Crimes Enforcement Network (FinCEN) as money services businesses and obtain state money-transmitter or virtual-currency licenses. Whether a business needs a license depends on whether it receives, controls, exchanges or transmits value for customers, and which entity carries out those activities. Approval of an issuer or federal registration with FinCEN does not automatically satisfy other federal requirements or state licensing rules. The GENIUS Act gives federal law priority over state law for certain approved issuers, but does not broadly exempt third parties such as exchanges, distributors, wallets and payment companies. State definitions, exemptions and licensing systems vary, so businesses must assess their activities and operating jurisdictions individually.