Midterm Elections: GENIUS Act to Take Effect in January 2027... Approval and Oversight Post-Election May Be Variables

Image representing the U.S. stablecoin regulation bill 'GENIUS Act'. Source: Digital Asset
The U.S. midterm elections will be held on November 3 (local time).
The midterm elections are held midway through the presidential term to elect the entire House of Representatives and about one-third of the Senate, evaluating the current government and influencing the policy momentum for the remainder of the term.
Major U.S. media outlets such as CBS and The Hill report that the Democratic Party is expected to regain the majority in the House of Representatives during the midterm elections. In contrast, the Senate is predicted to be a close contest between the Republicans and Democrats.
Experts believe that the results of the midterm elections may lead to changes in U.S. digital asset policy.
outlines potential variables in U.S. digital asset policy that may arise after the midterm elections.
The U.S. federal stablecoin regulation bill, the GENIUS Act, is scheduled to take effect in January 2027, with experts suggesting that approval and oversight post-election could be variables in the implementation of the law.
Gary DeWall, former attorney at Katten Muchin Rosenman, stated on the 28th (local time) that "even if the Democratic Party takes control of both the House and Senate in the midterm elections, existing laws will not be repealed, but congressional oversight over the approval of issuers, exceptions, and the establishment of follow-up regulations may be strengthened," as reported by .
The Office of the Comptroller of the Currency (OCC) announced the final rules for the implementation of the GENIUS Act in October, specifying the effective date as January 18, 2027.
OCC Finalizes Implementation Rules... Anti-Money Laundering Regulations Remain Separate
The GENIUS Act is a regulation for payment stablecoins established in July 2025. The OCC explained that to issue payment stablecoins in the U.S. after the law takes effect, issuers must generally meet requirements such as reserve assets, redemption, and risk management, and obtain issuance approval from the relevant federal or state regulatory authorities.
The final rules address reserve assets, redemption, risk management, auditing and reporting, custody, capital, and operational safeguards. Requirements for non-bank issuers seeking federal bank charters and foreign issuers are also included.
However, anti-money laundering regulations remain under separate procedures. The OCC stated that it would address matters related to the Bank Secrecy Act (BSA), anti-money laundering (AML), and sanctions from the Office of Foreign Assets Control (OFAC) in separate rules in cooperation with the Treasury Department.
Even at the application stage for approval, relevant response systems must be presented. The application materials guided by the OCC include explanations of business plans, reserve assets, issuance and redemption procedures, as well as compliance with anti-money laundering and sanctions, third-party risk management, and auditing systems.
Existing Issuers Also Need Approval... Temporary Exemptions Subject to Individual Review
Transitioning existing operators to the new system is also a challenge. The OCC stated in the application guidance announced on the same day that the pre-approval requirements also apply to issuers currently operating in the U.S. This means that even existing operators cannot issue payment stablecoins without separate approval.
However, legal entities pending after the law takes effect may apply for temporary exemptions for certain requirements. The exemption period is legally up to 12 months from the effective date.
The OCC announced on the 21st that it would begin accepting applications after receiving final approval from the Office of Management and Budget (OMB) regarding the collection of information related to applications. The commencement of application and exemption requests will be announced in a separate press release.
Efforts to streamline the reporting system are also underway. The OCC has released proposed amendments to the weekly and quarterly reporting forms for issuers and requested additional feedback. The related forms will be used to supervise the compliance and financial status of issuers.
Strengthened Oversight if Democrats Regain House... Separate Legislation Required for Repeal
Changes after the midterm elections can be divided into the continuity and implementation of the law. If the Democrats regain the House, they can monitor the enforcement situation of regulatory agencies through committees such as the Financial Services Committee. Regarding the GENIUS Act, the approval process and exemption applications, as well as oversight of reserve assets and redemption, may be subjects of scrutiny.
Reuters reported in October that "even if the Democrats control one side of Congress, they can strengthen investigations into financial regulatory agencies and digital asset companies."
If the Democrats control both chambers, they can also lead the review and processing of legislative amendments. However, if President Donald Trump exercises veto power, a two-thirds majority vote in both chambers will be required to overturn it. A simple majority cannot confirm the repeal or postponement of the law.
If the Republicans maintain control of the Senate, agreements with the Senate will be necessary for legislative amendments promoted by the Democrat-led House. In contrast, the enforcement of rules under current law and individual issuer reviews will continue to be handled by the executive branch.
The requirements for foreign issuers to access the U.S. market will also be specified during the implementation process. The OCC's final rules include matters related to the registration and inspection of foreign issuers. Korean companies considering entering the U.S. market or engaging in dollar stablecoin businesses may also be subject to relevant requirements depending on their business structure. The OCC stated that it would revise the final rules to reflect any new laws that may be enacted in the future.

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