Delaware’s Bid for the Stablecoin Market: What SB 16 and SB 19 Mean for Digital Asset Firms

Overview

With federal agencies now implementing the GENIUS Act, enacted on July 18, 2025, Delaware is building a state-level regulatory infrastructure consistent with the “substantially similar” standard for state-regulated issuers. The Bills cleared the Delaware Senate in substitute form and are now before the House Appropriations Committee. Together, they would integrate digital asset custody, trust, and stablecoin activity into Delaware’s existing banking framework.

The timing is notable. The GENIUS Act provides a state-level pathway for issuers at or below a $10 billion threshold, and Delaware is positioning itself to compete with New York’s BitLicense and Wyoming’s special purpose depository institution framework. For issuers, exchanges, custodians, and banks weighing where to domicile stablecoin or digital asset operations, these bills offer an early look at Delaware’s approach. But while Delaware’s legislative push is well underway, the federal regulatory landscape remains far from settled—creating both opportunity and uncertainty for market participants evaluating a Delaware-based strategy.

SB 16: Clearing the Path for Digital Asset Custody by Delaware Banks

SB 16 adds two new defined terms to the general definitions of the Delaware Banking Code:

• “Digital Asset” is defined as any digital representation of value recorded on a cryptographically secured distributed ledger or similar technology, including virtual currency.
• “Virtual Currency” is defined as a digital representation of value used as a medium of exchange, unit of account, or store of value that is not money and is not denominated in money. The definition excludes loyalty or rewards program credits that cannot be exchanged for money or bank credit, as well as digital representations of value issued by a publisher and used solely within online games.
  
  

SB 16 also amends the Delaware Banking Code to confirm that digital assets are “personal property,” giving Delaware-chartered banks and trust companies a clear statutory basis to hold and administer them in a fiduciary capacity.¹ Of note, the SEC issued no-action relief last September that generally permitted state-chartered trust companies to act as “banks” for purposes of digital asset custody. The bill also broadens the State Bank Commissioner’s (Commissioner) authority to tailor regulatory requirements, eases certain restrictions on limited-purpose trust companies, and streamlines conversions of out-of-state institutions to Delaware charters, including a deemed-approval mechanism if the Commissioner does not act within set timeframes.²

SB 19: A Licensing Regime for Stablecoin Issuers and Digital Asset Service Providers

SB 19 establishes a broad licensing regime and regulatory requirements for payment stablecoin issuers and a voluntary registration pathway for digital asset service providers (DASPs).³ Regarding payment stablecoin issuers, SB 19 is designed to achieve certification as a “substantially similar” state regulatory framework under the GENIUS Act’s Stablecoin Certification Review Committee process. The bill also establishes a transition mechanism for state-qualified issuers that exceed $10 billion in outstanding issuance value during any 12-month period; such issuers must either obtain federal approval or reduce their outstanding issuance value below the threshold within 360 days.

The bill mandates monthly reserve reporting reviewed by a registered public accounting firm and CEO/CFO certifications—a personal-liability framework that echoes the officer-certification regime under Sarbanes-Oxley. The bill imposes baseline prudential requirements: stablecoins must be backed at least 1:1 by high-quality liquid assets, and issuers face capital, liquidity, and compliance obligations, including anti-money laundering (AML) and countering the financing of terrorism (CFT)  requirements, and ongoing supervisory oversight. SB 19 also imposes custody and segregation rules to protect reserve assets and sets out specific procedures for the insolvency of a payment stablecoin issuer. SB 19 requires issuers to honor redemption at par and generally prohibits paying interest or yield on payment stablecoins, subject to a federal parity provision. That prohibition mirrors the GENIUS Act’s own ban on direct interest payments—but the scope of permissible “rewards” remains one of the most contested issues in ongoing federal negotiations over the Digital Asset Market Clarity Act of 2025 (the CLARITY Act), and the proposed rulemaking by the Office of the Comptroller of the Currency (OCC) has drawn criticism for its broad rebuttable presumption that could sweep in third-party reward arrangements. Issuers should expect continued enforcement scrutiny around affiliated reward programs and DeFi integrations.

Absent an exemption, no issuer may issue a payment stablecoin to or on behalf of a Delaware resident without a license from the Commissioner. DASPs—including entities exchanging, transferring, or custodying digital assets—may register with the Commissioner but are not required to do so to operate in Delaware.

Alignment With Federal Framework

SB 19 is built to dovetail with the GENIUS Act. It is designed to qualify Delaware-chartered entities as state-regulated stablecoin issuers where the state regime is deemed “substantially similar” to federal requirements.⁴ The Commissioner is directed to implement the statute consistent with federal standards, including Treasury’s proposed substantial-similarity principles and the OCC’s proposed rulemaking. If certified, Delaware-licensed issuers could operate nationwide without a federal charter.

The bill also opens a pathway for certain federally regulated stablecoin issuers to transition to Delaware licensure, subject to size limits and other conditions, while requiring state-regulated issuers that exceed specified thresholds to transition to federal oversight.⁵ It directs the Commissioner to file a GENIUS Act certification application within six months after the required implementing regulations are promulgated.

While Delaware’s legislative strategy is ambitious, its success depends on a federal regulatory framework that is still taking shape. Although the GENIUS Act was signed into law in July 2025, none of the implementing regulations from the OCC, the FDIC, the Financial Crimes Enforcement Network, the Office of Foreign Assets Control, or Treasury have been finalized, and significant policy choices—including reserve diversification standards, capital calibration for nonbank issuers, and the scope of permissible activities—remain open. In parallel, Congress continues to negotiate the CLARITY Act, which passed the House with broad bipartisan support and would establish jurisdictional boundaries between the SEC and the CFTC, create a “mature blockchain” threshold test, and subject digital commodity intermediaries to federal registration and AML obligations for the first time. Broader open questions, such as whether stablecoin issuers should face bank-comparable capital requirements or have access to Federal Reserve liquidity facilities, will shape the substantive floor that Delaware must meet to maintain “substantial similarity” and could necessitate further legislative amendments.

Practical Implications and Litigation Risk

For firms deciding where to domicile digital asset or stablecoin activities, Delaware is signaling that it intends to compete directly with New York and Wyoming rather than cede the field to federal licensing. SB 16 gives Delaware-chartered institutions clearer authority to offer digital asset custody and fiduciary services, which could make a Delaware charter more attractive to institutions already active in the space. SB 19’s mandatory licensing largely tracks familiar financial regulatory requirements—reserve, capital, AML/CFT, and information security obligations—but channels them through a new supervisory authority and leaves significant discretion to the Commissioner’s rulemaking.

The case for a Delaware pathway is not necessarily that it would be a lighter touch. A certified state regime must be substantially similar to the federal framework, so core reserve, capital, redemption, reporting, and compliance obligations should remain broadly comparable. A potential advantage is optionality. For issuers operating at or below the GENIUS Act’s $10 billion threshold, a Delaware license could provide a state-supervised path to nationwide operation without going federal at the outset. That may be useful for companies already organized in Delaware, relying on Delaware trust or custody infrastructure, or looking to build under a state regime before deciding whether to transition to federal oversight. That said, the practical value of a state-level strategy will depend on how several unresolved federal questions are answered, including how the OCC finalizes its capital and reserve requirements, whether Treasury’s substantial-similarity framework leaves room for meaningful state differentiation, and how the CLARITY Act ultimately treats stablecoin-related activities by digital asset intermediaries.

Several features of the regime create real litigation exposure that market participants should evaluate now. The CEO/CFO certifications create personal liability risk for officers who sign off on reserve adequacy or compliance representations that later prove inaccurate. The insolvency provisions establish creditor-priority rules favoring stablecoin holders, which could spark disputes with general unsecured creditors in a failure scenario. And while the bill does not appear to create a private right of action—suggesting enforcement runs exclusively through the Attorney General under the Delaware Consumer Fraud Act—aggrieved parties may still pursue claims under Delaware contract law, tort law, and consumer protection statutes. Both bills require a two-thirds vote under Article IX, § 1 of the Delaware Constitution, adding a procedural hurdle for the remaining House action.⁶

What Should You Do Now?

Market participants should consider: (1) monitoring the Commissioner’s rulemaking, which will shape the practical substance of licensing standards and capital requirements; (2) evaluating whether a Delaware charter or license offers strategic advantages over existing state regimes or a federal pathway; (3) assessing internal compliance readiness against SB 19’s reserve, reporting, and certification requirements; (4) for officers and directors of potential issuers, gauging personal exposure under the CEO/CFO certification framework and confirming that D&O coverage adequately addresses these obligations; and (5) tracking the progress of federal implementing regulations, particularly Treasury’s substantial-similarity rulemaking and the CLARITY Act’s treatment of digital asset intermediaries and stablecoin rewards, as these will directly affect the scope and durability of any state-level licensing strategy.

We will continue to monitor these developments and are available to discuss how the emerging framework may affect your operations.

*This client alert was co-authored by Stephen Shepardson, staff attorney.

¹ S.S. 1 for S.B. 16 w/ S.A. 1, 153d Gen. Assemb. §§ 5, 9–10, 22 (Del. 2026).
² Id. § 16 (amending 5 Del. C. § 795D(c)–(d)).
³ S.S. 2 for S.B. 19, 153d Gen. Assemb. §§ 3511, 3518 (Del. 2026).
⁴ Id. §§ 3502, 3566(c), 3567(b).
⁵ Id. §§ 3515–3516, 3567(b).
⁶ S.S. 1 for S.B. 16 w/ S.A. 1, 153d Gen. Assemb. (Del. 2026); S.S. 2 for S.B. 19, 153d Gen. Assemb. (Del. 2026); Del. Const. art. IX, § 1.