After the GENIUS Act, is the US MSB enough for USD stablecoin payments?

How are stablecoin issuance and payments divided?

Written by: Shao Jiadian

A crypto payment platform is preparing to expand into the US market. The team has previously completed FinCEN MSB registration, built a stablecoin wallet, payment interface, and cross-border settlement system, and has begun to integrate USD deposit and withdrawal services.

According to the original plan, the next step is mainly to confirm which states require a Money Transmitter License (MTL), and then look for banks and payment partners.

However, after the introduction of the GENIUS Act, the team began to encounter new problems: If the platform uses USDC for payments, does it need to apply for an additional stablecoin license? If it wants to issue its own USD stablecoin, can it continue to use the original MSB? If it only transfers third-party stablecoins for customers, will it also fall under the new regulatory framework?

These questions actually involve two different regulatory logics.

On July 18, 2025, the United States' "Guiding and Establishing National Innovation for U.S. Stablecoins Act" (referred to as the GENIUS Act) was officially signed into law, establishing a federal regulatory framework for payment stablecoins. Entering 2026, the OCC, FinCEN, the Federal Reserve, and other agencies have gradually promoted specific implementation rules, marking a new regulatory adjustment phase for the US stablecoin market.

The GENIUS Act did not render the US MSB meaningless, nor did it require all payment platforms using stablecoins to apply for stablecoin issuance licenses. What it truly changes is that the issuance of USD payment stablecoins and the use of stablecoins to provide payment services must be judged separately in terms of regulatory identity.

For projects that only use third-party stablecoins for exchange, transfer, and cross-border payments, MSB and related state-level licenses may still be important compliance foundations; however, if a project intends to issue its own payment stablecoin that meets the definition of the GENIUS Act, merely having MSB registration is clearly insufficient to meet the new issuance regulatory requirements.

01 Why can't we only talk about MSB in US stablecoin regulation?

In the past, many crypto payment projects considered MSB as the first thought when discussing US compliance.

The reason is simple. According to FinCEN's regulatory interpretation of Convertible Virtual Currency (CVC), if a business operator receives and transmits convertible virtual currency or engages in related exchange activities, it may fall under Money Transmitter and bear corresponding Bank Secrecy Act (BSA) obligations, provided it meets applicable conditions and there are no exemptions.

Therefore, for wallets, stablecoin exchanges, cross-border transfers, and related payment projects, FinCEN MSB registration often becomes an important part of US compliance analysis.

However, there has always been a misunderstanding regarding this issue.

MSB registration is not a business license that covers all financial activities across the United States.

FinCEN's MSB registration mainly corresponds to federal-level anti-money laundering regulatory requirements. Whether specific businesses also need to obtain state-level Money Transmitter Licenses should be further judged according to state laws and business models.

In other words, even without the GENIUS Act, projects should not simply understand that "completing MSB registration allows them to engage in all crypto payment businesses in the US."

After the introduction of the GENIUS Act, this hierarchical relationship has become more apparent.

The US now needs to distinguish at least three issues: who is issuing payment stablecoins, who is providing customers with funds or digital asset transfer services, and which entities need to meet federal and state financial regulatory requirements.

Issuance, exchange, and transfer may appear in the same app, but they do not necessarily belong to the same type of financial activity.

02 What the GENIUS Act really regulates is the responsibility for stablecoin issuance

To understand the new law, it is first necessary to distinguish between "issuing stablecoins" and "using stablecoins."

According to the GENIUS Act, payment stablecoins are primarily defined as digital assets designed for payment or settlement, with the issuer bearing the obligation to redeem or repurchase at a fixed currency value while maintaining corresponding stable value expectations. Whether a specific token falls under this legal definition still needs to be judged in conjunction with the actual rights and structure of the token.

If a company intends to issue a USD-pegged stablecoin, charging users in USD and minting tokens, promising that holders can redeem at a fixed value, then the regulatory focus is no longer just ordinary Money Transmission.

Regulators also need to determine:

• Does the issuer have appropriate authorization?
• Does the issued stablecoin have sufficient reserves?
• How can holders redeem?
• Who holds the reserve assets?
• If liquidity issues arise or the issuer goes bankrupt, how are users' rights protected?

The GENIUS Act thus establishes the regulatory identity of Permitted Payment Stablecoin Issuer.

According to the law, eligible issuing entities may include approved deposit institution subsidiaries, federally qualified payment stablecoin issuers, and state-qualified payment stablecoin issuers that meet relevant requirements. The approval and supervision arrangements for different paths are not entirely the same and do not simply involve applying for a unified "GENIUS license."

At the same time, the law stipulates that permitted issuers must maintain at least a 1:1 ratio of qualified reserve assets and bear obligations for reserve disclosure, redemption, risk management, and other regulatory responsibilities. Specific details still need to be determined in conjunction with federal and state regulatory rules.

This is clearly different from the problems solved by traditional MSB registration.

MSB mainly helps regulators identify and supervise relevant money service operators, while payment stablecoin issuance regulation also needs to address the redemption responsibilities and reserve security behind the tokens.

If a project only completes MSB registration but intends to directly issue its own USD payment stablecoin to users, then there is a fundamental regulatory gap between the two.

03 What is the status of the new law's implementation in 2026?

This point is very important because although the GENIUS Act has become law, not all proposed rules have become fully effective formal requirements.

According to Article 20 of the GENIUS Act, the effective date of the main provisions of the law is the earlier of two dates: 18 months after its signing on July 18, 2025, or 120 days after the main federal payment stablecoin regulatory agencies issue final implementation rules.

Therefore, January 18, 2027, is currently a key statutory date to focus on; if relevant final rules trigger an earlier effective arrangement, adjustments will need to be made accordingly.

In 2026, US regulatory agencies are intensively promoting implementation details.

In February, the OCC proposed a draft regulatory rule for stablecoin issuance and related activities, covering issuance qualifications, reserve assets, redemption, risk management, auditing, reporting, and custody.

In April, FinCEN and OFAC proposed a draft rule for anti-money laundering and sanctions compliance for permitted payment stablecoin issuers.

In June, FinCEN, along with the OCC, the Federal Reserve, the FDIC, and the NCUA, jointly proposed a draft rule related to the Customer Identification Program (CIP), while the OCC proposed an AML/CFT supervision framework for issuers.

In September, the Federal Reserve also released a draft implementation rule for payment stablecoin issuers under its regulatory scope.

These actions indicate that the US is incorporating the reserves, redemption, customer identity, and financial crime risks of payment stablecoin issuers into a more defined regulatory framework.

However, as of October 2026, the above-mentioned provisions in the consultation document cannot be directly regarded as finalized and universally applicable requirements.

For project parties, the most important thing now is not to prematurely claim "we have complied with all GENIUS new regulations," but to complete business classification and compliance gap analysis in advance according to the legal framework and the published regulatory direction.

04 Why do different projects need completely different licenses for USDC payments?

For companies that are truly engaged in payments, this may be the most concerning issue.

Assuming three companies all advertise that they provide "USD stablecoin payments," but their actual business models are completely different.

First Company: Uses third-party stablecoins for collection and cross-border settlement.

It does not issue its own stablecoin but receives USDC already held by customers, completing transfers or exchanges according to customer instructions, and paying fiat currency to the final merchants through licensed institutions.

In this case, the project first needs to analyze whether money transmission, virtual currency exchange, customer asset control, and related payment services trigger FinCEN MSB, state-level MTL, or other licensing requirements.

Since the stablecoin is issued by a third party, the project does not automatically become the issuer of that stablecoin just by using USDC.

However, the project still needs to verify the compliance status of the stablecoin issuer and related assets, as well as whether the cooperating institutions can provide corresponding services.

Second Company: Issues its own USD stablecoin for use in the payment network.

This company not only builds wallets and payment systems but also takes responsibility for minting, issuing, and redeeming tokens, bearing the obligation to redeem at a fixed value to holders.

In this structure, the regulatory issue of payment stablecoin issuance under the GENIUS Act becomes central.

Even if the company has previously completed MSB registration and obtained Money Transmission licenses in some states, it cannot simply derive its qualification to issue payment stablecoins that meet the GENIUS Act definition from these identities.

Third Company: Only provides payment software and technical interfaces.

For example, the company develops wallet front-end or payment software but does not control customer assets, act as a counterparty, execute fund transfers for customers, or bear token issuance or redemption responsibilities.

Under applicable conditions, pure technical services may not constitute a business requiring Money Transmitter licensing.

However, the company still needs to assess actual asset control, transaction instructions, and fund flows, and cannot simply assume that there are no financial regulatory obligations just because the contract states Technology Provider.

Therefore, it is not enough to look at whether all three companies use USDC.

What truly changes the regulatory conclusion is who issues, who controls the assets, who transmits value, and who bears financial service responsibilities to customers.

05 The GENIUS Act not only affects issuers but also changes the currency choices of payment platforms

There is another change that is easily overlooked.

Although the core of GENIUS Act regulation is the issuer, it also sets restrictions on digital asset service providers offering or selling payment stablecoins to US customers.

According to Article 3 of the law, relevant digital asset service providers, in principle, shall not provide or sell payment stablecoins that do not meet the specified issuance conditions to persons within the United States starting from July 18, 2028, unless applicable exceptions apply.

For offshore-issued payment stablecoins, the law has established specific arrangements, including the technical capabilities of issuers to comply with legal freeze orders and the comparability and registration mechanisms applicable under certain conditions for foreign regulation.

This means that projects cannot only consider:

"Can our MSB cover stablecoin transfers?"

They also need to further consider:

"Can the issuer of the dollar stablecoin we choose meet the U.S. market access requirements in the long term?"

This question will directly impact the choice of trading currencies, liquidity arrangements, partner institutions, and the scope of future services for U.S. clients, especially for payment platforms relying on offshore-issued stablecoins.

However, it is also important to note the time boundaries.

One cannot simply deduce that a widely circulated stablecoin in the market has been completely banned in the U.S. just because the GENIUS Act has been signed, nor can one determine compliance with all regulatory requirements solely based on the issuer's registration location.

The law sets forth a set of ongoing issuer and market access rules, and specific currencies should still be verified in conjunction with the applicable timing, issuing entity, and regulatory status.

For crypto payment projects, this means that future currency due diligence cannot only look at market capitalization, liquidity, and on-chain transaction fees; it also needs to incorporate dimensions such as the issuer's regulatory identity, reserve and redemption arrangements, freezing capabilities, and compliance risks.

06 Do MSB and MTL Still Need to Be Considered for Dollar Stablecoin Payments?

A reassessment is needed, but it cannot be simply answered with "both are needed" or "neither is needed."

The introduction of the GENIUS Act did not directly eliminate the existing Money Services Business (MSB) regulatory framework of FinCEN, nor did it automatically classify all stablecoin payment activities under the issuer's license.

For businesses that constitute Money Transmission or related convertible virtual currency services, the original BSA obligations and state-level Money Transmission laws still hold practical significance.

However, for a specific project, the regulatory scope also depends on the method of fund transmission, customer relationships, operational regions, whether customer assets are controlled, and whether applicable exemptions exist.

For example, a platform using third-party stablecoins to transfer value for U.S. customers to others still needs to assess the corresponding Money Transmission regulations; while a business that only uses its own held stablecoins to pay for its procurement will not automatically become an MSB just because it conducts on-chain payments.

This is why U.S. stablecoin payments cannot simply apply a single licensing roadmap.

For projects planning to operate long-term, it is more reasonable to break the business down into several layers:

This table is only for business classification and does not imply that each activity necessarily corresponds to a unique license. The same entity may have multiple qualifications, and certain functions may legally be provided by licensed partners.

What truly needs to be avoided are two extremes:

• One is to think, "The GENIUS Act is here, all stablecoin payment companies must apply for issuance licenses."
• The other is to think, "We have MSB registration, so the GENIUS Act has no impact on us at all."

Issuance regulation and payment regulation may apply to different entities, but the same stablecoin payment business chain still needs to consider both.

07 How Should a Mature Dollar Stablecoin Payment Platform Design Its Licensing Structure?

Assuming a company wishes to provide stablecoin payment and fiat settlement services to U.S. merchants but does not plan to issue its own stablecoin in the short term.

Rather than directly applying for issuer qualifications, it is more worthwhile to first map out the entire funding chain.

What stablecoin do customers use for payment? Which institution issues the tokens? Do user assets enter the platform or are they controlled by a partner institution's wallet? Who is responsible for the exchange? Who receives the fiat? Who settles the dollars to the merchants? What contractual relationships do customers establish with which entities?

If the company itself does not issue stablecoins, it can prioritize evaluating the use of third-party stablecoins that comply with applicable regulatory requirements, with qualified partners assuming the necessary financial services.

However, licensed partnerships are not simply borrowing licenses.

If the project itself controls customer assets, executes fund transfers, or undertakes actual payment business, even if it connects to a licensed partner, it cannot automatically be deemed free of regulatory obligations.

For companies preparing to issue stablecoins in the future, a complete structure for issuance, reserves, redemptions, governance, and regulatory reporting needs to be established in addition to existing payment businesses.

It is especially important to note: whether the issuer has specific qualifications and whether its affiliated companies can engage in custody, trading, payment, and other financial businesses are different regulatory judgments.

Thus, a truly mature dollar stablecoin payment group may need to place the stablecoin issuer, wallet or payment operation entity, banks, and settlement partners in the correct positions.

Projects do not necessarily need to own all licenses themselves, but must clarify who legally provides each regulated service.

08 Which Projects Should Reassess Their U.S. Compliance Path Now?

The first category includes projects that have completed FinCEN MSB registration and are expanding U.S. stablecoin payments, merchant settlements, or cross-border remittance businesses. These enterprises need to reconfirm the specific business content corresponding to MSB, the coverage of state-level licenses, and whether the actual funding paths align with existing regulatory arrangements.

The second category includes platforms preparing to issue their own dollar stablecoins. For these teams, the issuer qualifications, reserves, redemptions, and related regulatory requirements under the GENIUS Act should become the starting point for business design, rather than waiting until the product is launched to reconsider.

The third category includes enterprises providing services to U.S. customers through offshore-issued stablecoins. As the restrictions and implementation rules related to the GENIUS Act gradually take effect, issuer access, stablecoin listings, redemption support, and cross-border compliance arrangements all need to be assessed in advance.

The fourth category includes crypto payment projects hoping to enter the U.S. market through licensed partners. These teams need to clarify whether their partners have MSB registration, state-level MTL, issuance qualifications, or other regulatory identities, avoiding the misunderstanding that a single qualification represents comprehensive permission for the entire payment chain.

For these enterprises, what is most needed now is not simply to add another license, but to reconfirm whether the existing structure can support future business.

09 How Do We Typically Support Such Projects?

For teams conducting dollar stablecoin payments in the U.S., the first step is usually to clarify what role the project plays in the entire business chain, such as issuer, wallet operator, fund transmission service provider, payment service provider, or pure technology provider.

Based on this, they can combine the GENIUS Act, FinCEN rules, and relevant state-level Money Transmission laws to form compliance diagnostic opinions for U.S. stablecoin payment business models and analyses of the applicability of the GENIUS Act to MSB/MTL, first clarifying whether existing businesses need adjustments and what regulatory requirements may be triggered by future new products.

If the project plans to issue its own dollar stablecoin, it will need to further assess the issuer qualifications, regulatory paths, reserves and redemption mechanisms, banking and reserve custody arrangements, and form corresponding regulatory gap analyses and implementation roadmaps.

For enterprises conducting collection, exchange, and cross-border settlement with third-party stablecoins, it is crucial to outline the on-chain and off-chain funding paths, customer asset control, state-level licensing scope, and licensed partnership structures, clarifying which entity provides services at each link and how to implement AML/KYC/KYT and sanctions compliance requirements.

Once entering the implementation phase, it will also be necessary to conduct qualification verifications for stablecoin issuers, custodians, liquidity service providers, payment channels, and other partners based on the specific due diligence requirements of banks and payment partners, improving contractual responsibilities and ongoing compliance mechanisms.

Conclusion: The GENIUS Act Has Not Replaced MSB, but Requires Layered Consideration of Stablecoin Business

Returning to the title. After the GENIUS Act, is MSB still sufficient for dollar stablecoin payments in the U.S.?

If the project relies solely on third-party stablecoins to provide exchange, fund transfer, or other payment services, MSB may still be part of the compliance system, but it typically cannot determine nationwide operational qualifications based solely on FinCEN registration.

If the project plans to issue dollar payment stablecoins independently, merely having MSB registration is clearly insufficient; it must further evaluate issuer qualifications and related regulatory requirements under the GENIUS Act.

And if the project uses offshore-issued stablecoins to serve U.S. customers, it cannot only check its own payment licenses but also needs to pay attention to the market access and future regulatory restrictions of the stablecoin issuer.

U.S. stablecoin regulation is evolving from past discussions centered around virtual currency exchange and fund transmission to further extend to token issuers, reserves, redemptions, and financial system risks.

For crypto payment enterprises truly preparing for long-term operations, this is not simply about needing to apply for another license.

The more important change is that:

Issuing stablecoins, transmitting stablecoins, and using stablecoins for payments can no longer be treated as the same business.

Only by placing these three aspects into the correct regulatory framework can dollar stablecoin payments truly form a long-term, stable business structure.