GENIUS Act Does Not Exempt Stablecoin-Related Businesses from State Licensing Requirements

Odaily reports: The GENIUS Act establishes a federal framework for payment stablecoin issuance but does not exempt all businesses handling stablecoins from money transmission regulations. Exchanges, wallets, payment processors, and money transfer companies may still need to register with the Financial Crimes Enforcement Network (FinCEN) as money services businesses and obtain state-level money transmission or virtual currency licenses.

Whether a business needs a license depends on whether it receives, controls, exchanges, or transmits value on behalf of customers, and which entity performs each function. An issuer's approval or FinCEN federal registration does not automatically satisfy other federal requirements or state licensing requirements.

The GENIUS Act includes a federal preemption arrangement for certain approved issuers under state law, but it does not provide a general exemption for third parties such as exchanges, distributors, wallets, and payment companies. States also differ in their definitions of virtual currency and money transmission, as well as their exemption and licensing regimes, so businesses need to assess their obligations separately based on business activities and jurisdictions of operation. (Bitcoin.com News)