SB19 Requires 1:1 Reserves and Monthly Audits for Stablecoin Firms
The proposed Delaware Payment Stablecoin Act or Delaware Banking Modernization Act lays out a licensing and oversight structure for stablecoin issuers and digital asset service providers operating with state residents. The effort arrives as part of a broader modernization push that includes additional banking and money transmission reforms designed to bring legacy financial statutes in line with digital asset activity.
Local reporting notes that Sen. Spiros Mantzavinos, who chairs the Senate Banking, Business, Insurance and Technology Committee, introduced the bill alongside Rep. Bill Bush. State officials and local institutions, including the governor’s office and the University of Delaware, have signaled support, framing the measure as both pro-business and consumer-focused.
The legislation closely mirrors the federal Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act, passed in 2025. That federal law created a split system in which large issuers fall under national oversight, while smaller issuers can operate under state frameworks deemed “substantially similar.” Delaware is positioning itself to meet that standard early.
If enacted, SB19 would create three license categories: payment stablecoin issuer, digital asset service provider, and a combined license. Oversight would fall to the Delaware State Bank Commissioner, who would also be responsible for issuing detailed regulations and conducting examinations.
At the core of the proposal is a strict reserve requirement. Issuers would need to back all stablecoins 1:1 with high-quality liquid assets such as U.S. dollars, cash equivalents, or short-term Treasurys. The bill outlines mandatory remediation steps if reserves fall short and requires segregation and custody protections for those assets.
Transparency rules are equally tight. Companies must publish monthly disclosures detailing reserves and outstanding issuance, with independent attestations from registered accounting firms. These disclosures aim to give users a clear line of sight into whether a token is actually backed as advertised.
The bill also leans heavily on anti-money-laundering compliance. Issuers would be required to follow Bank Secrecy Act standards, including know-your-customer procedures and transaction monitoring. In short, stablecoin firms would be expected to operate with safeguards comparable to traditional financial institutions.
One notable provision draws a firm line on yield. SB19 explicitly bars issuers from offering interest or rewards simply for holding a stablecoin, cutting off attempts to blur the line between payment instruments and deposit-like products.
Capital requirements are also spelled out, starting with a minimum of $5 million and scaling based on operational risk. Issuers must also maintain enough capital to cover at least a year of projected expenses, giving regulators a cushion if conditions tighten.
Redemption rights are another focal point. The bill requires issuers to honor redemptions within two business days under normal conditions, with limited extensions for large withdrawal requests. Fee changes would require advance notice, preventing sudden shifts that could trap users.
As of now, SB19 has been referred to committee, and no vote has taken place. Full statutory language is expected to be published shortly, which may clarify additional technical details and enforcement mechanisms.
For Delaware, the play is familiar: move early, set the rules, and attract the business. Lawmakers are betting that a clear, federally aligned framework can draw stablecoin issuers the same way earlier policies pulled in credit card giants decades ago—this time with digital dollars instead of plastic.
FAQ 🔎
What is Delaware Senate Bill 19?It is proposed legislation creating a state licensing and regulatory framework for stablecoin issuers and digital asset firms. How does SB19 relate to federal law?It aligns with the 2025 GENIUS Act, allowing smaller issuers to operate under certified state systems. What are the key requirements for issuers?They must maintain 1:1 reserves, publish monthly disclosures, follow AML rules, and meet capital standards. When could SB19 take effect?The bill is still in committee, and implementation would follow legislative approval and regulatory rollout.
