Stablecoin issuers face an operational test before 2027, Telcoin Digital Asset Bank president says

US stablecoin issuers have entered a five-month preparation window before the GENIUS Act’s expected Jan. 18, 2027, effective date, which places licensing and operating controls at the center of market access. Summary Stablecoin issuers will generally need a federal or state license from Jan. 18, 2027. Patrick Gerhart said integrated compliance systems will present the hardest licensing challenge. US platforms face separate restrictions on distributing unapproved stablecoins from July 18, 2028. Treasury is considering customer and location checks that could affect offshore issuers and platforms. The US Treasury proposed new definitions on Aug. 17 covering when a company issues a payment stablecoin in the United States and when a digital asset platform offers one to a US customer. Although the proposal clarifies which activities fall under the law, Patrick Gerhart, president of Telcoin Digital Asset Bank, told crypto.news that securing a license will require issuers to prove their compliance, reserves, and technology systems work together under daily operating conditions. “The hardest part will be building the operating infrastructure behind the license,” Gerhart said. “A stablecoin issuer needs much more than a reserve account and a compliance policy on paper.” You might also like: Stablecoin infrastructure investment could hit $8B in 2027: NGPES President Donald Trump signed the GENIUS Act into law on July 18, 2025, establishing separate regulatory paths for federally supervised issuers and qualifying state-regulated companies. Under the law, only permitted issuers may issue payment stablecoins in the United States once the framework takes effect. Its effective date is technically the earlier of Jan. 18, 2027, or 120 days after the responsible federal agencies complete their final regulations. Regulators missed a July 18, 2026, statutory deadline for finishing the rules, however, leaving issuers with less time to adapt before the expected January start. Stablecoin licensing will require working controls Based on Telcoin’s chartering process, Gerhart said regulators will expect an issuer to show how it identifies customers, traces incoming funds, monitors transactions, manages reserves and handles redemptions. Each function may require a separate policy, but the licensing test will involve how the controls operate as a single system. According to Gerhart, compliance, risk, technology, reserve management, and banking relationships cannot remain isolated workstreams. “For issuers working toward 2027, I would expect the biggest challenge to be demonstrating that those controls actually work together operationally,” he said. “They have to function as one operating model, and regulators will want to see that the institution is ready to manage that model at scale.” Federal proposals support his assessment. The Office of the Comptroller of the Currency’s draft framework covers reserve assets, redemptions, custody, liquidity, capital, audits, risk management, regulatory reporting and operational backstops. Application, examination, and wind-down procedures also form part of the proposed rules.