The GENIUS Act forces a direct decision on any institution that wants to issue, manage, or support stablecoins in the US market: build the required infrastructure from scratch or plug into a provider that will have it in place.
Building Means Starting From Zero
Building in-house means building everything. That includes KYC, AML, OFAC screening, suspicious activity reporting, and customer onboarding systems. Then come the operational requirements: real-time reserve tracking, monthly disclosures, 1:1 redemption
logic, and the technical ability to freeze or destroy tokens on legal order. None of it can be done manually and every action must leave a digital record. Every subsystem must hold up under audit. Therefore, compliance will be the operating model rather than
a checklist.
Fintechs Face Tighter Constraints
Most fintechs will not get regulatory approval to issue directly. They will need to work through a licensed bank or a provider with the right permissions. That leads to the second option: buying infrastructure.
Buying infrastructure requires onboarding into a system that meets GENIUS requirements, then proving that the controls, disclosures, reporting, and legal capabilities meet the same bar as if they were built internally. When regulators ask where the reserves
are, how redemption works, or whether AML checks are functioning, the issuer is the one responsible for the answer.
Off-the-Shelf Comes With Conditions
Some embedded finance providers are already building GENIUS-compliant infrastructure. Others will modify legacy systems that were designed for checking accounts and debit cards. The difference will show up quickly in how they handle reserves.
A compliant issuer must maintain 1:1 reserve backing with short-term Treasuries or similar assets. Funds must be segregated, identifiable, and safeguarded with qualified custodians. Pooling client assets, rehypothecation, or mixing deposit types is not permitted.
That rules out a large portion of general-purpose banking infrastructure.
Smart contract controls are another challenge. It doesn’t matter what chain the token runs on. If the issuer can’t freeze or burn coins on demand, the product is out of compliance. Many generic token contracts won’t meet that standard.
Compliance Tech
AML systems are where some stablecoin projects will fall short. AML is not limited to ID verification at sign-up. Live transaction monitoring, alert scoring, SAR submission, and real-time sanctions screening are part of the set requirements. The GENIUS
Act classifies stablecoin issuers as financial institutions under the Bank Secrecy Act. That requires a full AML stack, not just front-end screening.
Reserve reports must be published monthly. Larger issuers must undergo annual audits. Redemptions must be processed at par, without delay. If these systems fail, the consequences include penalties, license loss, and public enforcement actions.
The Economics Work If the Infrastructure Works
Issuers earn interest on reserves. That scales with volume, not complexity. A compliant $5 billion float backed by Treasuries can generate material income. But compliance costs will also rise. If the infrastructure isn’t clean, the margins get squeezed.
Some firms will start with a partner, then internalize later. Others will build from the start. The tradeoff is economy and speed versus cost and control. But the infrastructure is needed because the law sets the bar, and the bar is high.
Mbanq’s View
Mbanq builds infrastructure for regulated fintech products. That includes the compliance stack, reserve management tools, and technical systems that GENIUS-compliant stablecoins require. We work with partner banks and fintech issuers who need systems
that are audit-ready from day one.
We don’t believe every company should rebuild the rails. But we do believe every company needs to understand how the rails work, and what’s at stake when they don’t.
