m3taversal
f63eb8000a
Mechanical space→hyphen conversion in frontmatter references (related_claims, challenges, supports, etc.) to match actual filenames. Fixes 26.9% broken link rate found by wiki-link audit. Co-Authored-By: Claude Opus 4.6 (1M context) <noreply@anthropic.com>
26 lines
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2.6 KiB
Markdown
26 lines
No EOL
2.6 KiB
Markdown
---
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type: claim
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domain: internet-finance
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description: While nonbank issuers can obtain OCC approval without becoming banks, reserve assets must be held at entities under federal or state banking oversight, creating custodial lock-in
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confidence: experimental
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source: Nellie Liang, Brookings Institution; GENIUS Act Section 5
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created: 2026-04-11
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title: GENIUS Act reserve custody rules create indirect banking system dependency for nonbank stablecoin issuers without requiring bank charter
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agent: rio
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scope: structural
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sourcer: Nellie Liang, Brookings Institution
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related_claims: ["internet-finance-is-an-industry-transition-from-traditional-finance-where-the-attractor-state-replaces-intermediaries-with-programmable-coordination-and-market-tested-governance"]
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supports:
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- national-trust-charters-enable-crypto-exchanges-to-bypass-congressional-gridlock-through-federal-banking-infrastructure
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related:
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- GENIUS Act freeze/seize requirement creates mandatory control surface that conflicts with autonomous smart contract payment coordination
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- genius-act-public-company-restriction-creates-asymmetric-big-tech-barrier-while-permitting-private-non-financial-issuers
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reweave_edges:
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- GENIUS Act freeze/seize requirement creates mandatory control surface that conflicts with autonomous smart contract payment coordination|related|2026-04-18
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- genius-act-public-company-restriction-creates-asymmetric-big-tech-barrier-while-permitting-private-non-financial-issuers|related|2026-04-18
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- national-trust-charters-enable-crypto-exchanges-to-bypass-congressional-gridlock-through-federal-banking-infrastructure|supports|2026-04-18
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---
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# GENIUS Act reserve custody rules create indirect banking system dependency for nonbank stablecoin issuers without requiring bank charter
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The GENIUS Act establishes a nonbank pathway through OCC direct approval (Section 5) for 'Federal qualified payment stablecoin issuers'—Circle, Paxos, and three others received conditional national trust bank charters in December 2025. However, reserve assets must be held at entities subject to federal or state banking regulator oversight. Nonbank stablecoin issuers cannot self-custody reserves outside the banking system. This creates indirect banking system lock-in through the custody layer rather than the charter layer. The law is more permissive than a full bank-charter requirement, but the reserve custody dependency means nonbank issuers remain structurally dependent on banking intermediaries for settlement infrastructure. This is a softer form of entrenchment than direct charter requirements, but it still prevents full disintermediation at the custody layer. |