Georgia sets up licensing and full-reserve rules for companies that issue payment stablecoins

A new chapter of banking law bars unlicensed issuing of payment stablecoins and sets a later ban on selling stablecoins that do not come from an approved issuer. It covers companies that issue payment stablecoins and sellers of them. A payment stablecoin is a digital asset designed for payments and redeemable for a fixed amount of money. Only licensed or federally approved issuers could use the words "stablecoin" or "payment stablecoin" in signs and marketing. Direct transfers between two people with no middleman, certain transfers between a person's own accounts at home and abroad, and use of a person's own software or hardware wallet are not covered. The state's rules are meant to be substantially similar to the federal GENIUS Act, which sets national stablecoin rules. The ban on issuing without approval applies once the act takes effect. The ban on offering or selling starts July 18, 2028.

The department must review applications using set factors, run background checks, and deny applications that fail them. It covers applicants, their directors, officers, and owners of 10 percent or more, and the Department of Banking and Finance. The department must weigh financial strength, character, competence, and the redemption policy, and whether an officer, director, or owner has a felony conviction for fraud, theft, money laundering, or similar crimes. The department must deny an application if the applicant does not meet the factors, operates in an unsafe or unsound way, is under a recent final cease and desist order based on this chapter, or had a license revoked in the past five years. Applicants may ask for a hearing on a denial within 30 days. The department tells the applicant within 30 days whether the application is complete and decides within 120 days of a complete application.

The chapter requires full reserves, trust protection for holders, monthly reserve reports, a public redemption policy, and honest marketing. It covers licensed payment stablecoin issuers and the people who hold their stablecoins. Reserves must back outstanding stablecoins at least one to one and may not be pledged or reused except for narrow purposes. If reserves fall short, the issuer must add capital or halt redemptions and distribute the reserves to holders, and the department may order a halt. Fee changes need at least seven days' notice, and customers can redeem at the old rate before the change. Issuers may not market a stablecoin as legal tender, government-issued or backed, or FDIC-insured, and are treated as financial institutions under the Bank Secrecy Act. Reserve composition must be published monthly, and the chief executive and chief financial officer must certify its accuracy each month.

The chapter gives the department oversight and enforcement powers over licensed issuers. It covers licensed payment stablecoin issuers, their officers, directors, employees, owners, and anyone issuing without a license. Licenses expire each December 31 and renewals are due by December 1. Issuers must file annual audited financial statements and an annual report, and certify anti-money laundering and sanctions programs. An unlicensed person gets a cease and desist order that is final in 30 days with no administrative hearing, unless they obtain the proper license; a licensed issuer has 20 days to ask for a hearing. Examinations occur at least once each year.