Stablecoin issuers in the United States now face a two-tier regulatory system that splits authority between federal and state regulators, with the GENIUS Act creating a $10 billion threshold that determines which pathway applies. Since July 18, 2025, when the GENIUS Act took effect, companies issuing payment stablecoins must choose between staying under state supervision if their circulating supply stays below $10 billion, or moving to federal oversight through the Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), or Federal Reserve once they cross that threshold.

This dual structure emerged because regulators wanted to avoid killing smaller stablecoin projects while establishing federal guardrails for the largest ones. The law includes a 36-month transition window that lets existing state-licensed issuers keep operating under their current frameworks while federal regulators finalize the implementing rules. That means companies like Paxos and Gemini, which hold New York limited-purpose trust charters, can continue under those regimes as long as their home state is certified as "substantially similar" to federal standards by a Treasury-led review panel.

Why State Licenses Still Matter Even After Federal Rules Took Effect?

State-level pathways remain attractive for three practical reasons. First, state chartering is faster: Wyoming Special Purpose Depository Institution (SPDI) applications historically close in 12 to 18 months, compared to an estimated 18 to 24 months for a federal OCC trust charter. Second, states confer commercial benefits that the federal framework does not automatically grant. A New York trust charter permits custody of customer crypto assets, and a Wyoming SPDI is the only U.S. depository institution explicitly permitted to hold digital assets without Federal Deposit Insurance Corporation (FDIC) insurance. Third, state regimes set the floor for activities that fall outside payment stablecoins entirely, such as algorithmic stablecoins, yield-bearing tokens, and tokenized deposits, categories the GENIUS Act either restricts or excludes.

Wyoming's SPDI framework, created in 2019, has become a magnet for digital-asset-focused businesses. The structure allows stablecoin issuers to take fiat deposits backing the stablecoin and hold them with the issuer's own bank charter rather than a third-party custodian. SPDIs must hold 100 percent reserves against demand deposits, are prohibited from making loans against deposits, and cannot accept FDIC insurance. The first SPDI charter went to Kraken in August 2021, followed by Commercium Financial. However, a significant limitation emerged: the Tenth Circuit affirmed in October 2025 that SPDIs cannot access Fedwire, the Federal Reserve's payment system, directly, which constrains their ability to move money instantly between banks.

How to Navigate the State-by-State Stablecoin Licensing Landscape

• Wyoming SPDI Route: Requires a $5 million minimum capital floor, a three-year business plan with stress scenarios, and a custody agreement segregating customer assets from the bank's general estate. Application fees run $5,000 to $10,000, with examination assessments thereafter based on assets under management.
• New York DFS Trust Charter: The most heavily-used state regime for stablecoin issuance. Requires USD-backed stablecoins to maintain reserves of cash, U.S. Treasury bills with three-month-or-less maturity, or reverse repos collateralized by Treasury securities. Reserves must be segregated and verified monthly by an independent certified public accountant (CPA) following American Institute of Certified Public Accountants (AICPA) attestation standards. Application fees run on a sliding scale with a base examination fee of approximately $5,000.
• Texas Money Transmitter License: Texas has not enacted a bespoke stablecoin statute, so the Texas Department of Banking treats sovereign-backed stablecoins as "money" under the Texas Money Services Act, requiring money transmitter licensing rather than a specialized stablecoin charter.

New York's Department of Financial Services (DFS) also publishes a greenlist of pre-approved coins that licensed entities can list without separate regulatory approval. As of late 2025, the greenlist included USDC, GUSD, PYUSD, RLUSD, and a handful of non-stablecoin tokens. Issuers wanting to add a new stablecoin to a DFS-supervised exchange's offering can submit a self-certification under a streamlined process introduced in November 2023, which compresses what was a multi-month review into a typical 30-to-60-day window.

The practical implication for stablecoin companies is clear: the choice between state and federal pathways depends on growth trajectory, desired commercial activities, and timeline. A startup issuer might choose Wyoming for speed and digital-asset custody flexibility, while a larger issuer approaching the $10 billion threshold would begin planning for federal transition. The 36-month transition window gives existing state-licensed issuers time to decide whether to stay under state supervision indefinitely, if their state is certified, or to graduate to the federal pathway as they scale.

This two-layer system reflects a broader regulatory philosophy: federal oversight for systemic risk, state oversight for innovation and speed. The GENIUS Act did not eliminate state charters; it created a federal floor above which issuers must operate. For the stablecoin market, that means the next two years will reveal which issuers can thrive under state rules and which need federal backing to compete at scale.