Payment Companies Face a Choice: Issue Stablecoins or Find a Partner

Payment firms eyeing a branded dollar stablecoin must first answer one key question: which legal entity will be responsible for redeeming the tokens for actual dollars. That single decision determines whether they should pursue an issuer license or partner with an existing one.

Under the GENIUS Act, issuing payment stablecoins in the US after January 18, 2027 generally requires authorized issuer status. Non-bank fintechs can apply for federal approval through the OCC, while those with up to $10 billion in circulation may opt for state-level oversight. Crossing the threshold forces a switch to federal supervision within 360 days.

Issuing directly gives full control over reserves and redemptions but demands heavy infrastructure and costs. The alternative is a white-label setup where a partner handles issuance and redemption while the company manages branding and merchant integration. The OCC’s October 23 final rule does not cap the number of brands per issuer but requires clear disclosure of the actual issuer.

Before signing any agreement, firms should verify the partner’s exact legal name, current issuance authority, and post-2027 plans, and clearly define who confirms incoming funds and authorizes token minting.

Based on information from cryptonews.net