Delaware Introduced Stablecoin Legislation That Would Bring Issuers Under State Banking Rules

Federal stablecoin legislation is still moving through Congress. Delaware is not waiting for it to finish.

What the Bill Does

According to Bitcoin.com News Delaware Senate Bill 19, introduced in the 153rd General Assembly and sponsored by Senators Mantzavinos and Pettyjohn alongside Representatives Bush and Spiegelman, proposes the Delaware Payment Stablecoins Act as a new chapter within Title 5 of the Delaware Code.

The bill would establish a state-level regulatory framework for payment stablecoin issuers operating under Delaware charter, creating licensing requirements and operational standards that mirror the federal framework established by the GENIUS Act enacted on July 18, 2025.

The core requirements of the proposed framework are direct. Issuers would be required to maintain one-to-one reserves backing every stablecoin in circulation, meaning each token must be fully backed by equivalent dollar-denominated assets at all times. Monthly audits would be mandatory, providing regular verification that reserve requirements are being met rather than relying on periodic or voluntary disclosure. Anti-money laundering and know-your-customer compliance obligations would apply across the issuer’s operations. Yield payments to stablecoin holders would be restricted, consistent with the activity-based rewards compromise reached in the federal CLARITY Act negotiations covered in earlier reporting this week.

The GENIUS Act Connection

The bill’s legislative findings section explicitly references the GENIUS Act, acknowledging that the federal framework permits state-qualified payment stablecoin issuers to operate under state regulatory regimes that are substantially similar to the federal standard, subject to certification by the Stablecoin Certification Review Committee. Delaware is positioning its proposed framework as a pathway to that federal certification rather than a competing or conflicting standard.

That framing is deliberate. Delaware’s status as the dominant state for US corporate chartering gives the bill significance beyond its borders. The majority of US corporations, including a substantial portion of the financial services industry, are incorporated in Delaware. A state-level stablecoin framework that qualifies under the GENIUS Act’s certification process would allow Delaware-chartered entities to operate as state-qualified payment stablecoin issuers without requiring a federal charter, providing a faster and more familiar regulatory pathway for institutions already operating within Delaware’s legal infrastructure.

What the Requirements Mean in Practice

The one-to-one reserve requirement is the foundational operational constraint. It rules out fractional reserve models where stablecoin issuance exceeds backing assets, the structure that has created systemic risk in prior algorithmic and undercollateralized stablecoin failures. For issuers operating under the Delaware framework, every token in circulation must correspond to an equivalent reserve asset, creating a direct accountability mechanism that monthly audits are designed to verify.

The yield restriction mirrors the federal compromise. Passive interest payments to holders are prohibited, but the framework does not address activity-based rewards in the same terms as the CLARITY Act negotiation, leaving that question to be resolved through the federal certification process. The AML and KYC requirements bring stablecoin issuers into the same compliance infrastructure that traditional bank-chartered entities already operate within, removing the regulatory arbitrage that has historically made non-bank stablecoin issuance more operationally flexible than bank-issued alternatives.

The bipartisan sponsorship of the bill reflects the broader shift in the political treatment of stablecoin regulation covered throughout this week’s reporting. What was a contested and ideologically divided issue eighteen months ago has developed sufficient cross-party consensus at both the federal and state level to produce legislation with sponsors from both parties. Delaware introducing a framework consistent with the federal GENIUS Act before that federal framework has produced final implementing regulations demonstrates how quickly state-level regulatory infrastructure is moving to align with Washington’s direction.

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