[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 919 Reported in Senate (RS)]
<DOC>
Calendar No. 33
119th CONGRESS
1st Session
S. 919
To provide for the regulation of payment stablecoins, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 10, 2025
Mr. Hagerty (for himself, Mr. Scott of South Carolina, Mrs. Gillibrand,
Ms. Lummis, and Ms. Alsobrooks) introduced the following bill; which
was read twice and referred to the Committee on Banking, Housing, and
Urban Affairs
March 18, 2025
Reported under authority of the order of the Senate of March 14, 2025,
by Mr. Scott of South Carolina, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
A BILL
To provide for the regulation of payment stablecoins, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
<DELETED>SECTION 1. SHORT TITLE.</DELETED>
<DELETED> This Act may be cited as the ``Guiding and Establishing
National Innovation for U.S. Stablecoins Act of 2025'' or the ``GENIUS
Act of 2025''.</DELETED>
<DELETED>SEC. 2. DEFINITIONS.</DELETED>
<DELETED> In this Act:</DELETED>
<DELETED> (1) Bank secrecy act.--The term ``Bank Secrecy
Act'' means--</DELETED>
<DELETED> (A) section 21 of the Federal Deposit
Insurance Act (12 U.S.C. 1829b);</DELETED>
<DELETED> (B) chapter 2 of title I of Public Law 91-
508 (12 U.S.C. 1951 et seq.); and</DELETED>
<DELETED> (C) subchapter II of chapter 53 of title
31, United States Code.</DELETED>
<DELETED> (2) Board.--The term ``Board'' means the Board of
Governors of the Federal Reserve System.</DELETED>
<DELETED> (3) Comptroller.--The term ``Comptroller'' means
the Office of the Comptroller of the Currency.</DELETED>
<DELETED> (4) Comptroller-regulated entity.--The term
``Comptroller-regulated entity'' means--</DELETED>
<DELETED> (A) any Federal qualified nonbank payment
stablecoin issuer that is subject to regulation and
supervision exclusively by the Comptroller, pursuant to
section 4(a)(7); and</DELETED>
<DELETED> (B) any entity chartered by the
Comptroller.</DELETED>
<DELETED> (5) Corporation.--The term ``Corporation'' means
the Federal Deposit Insurance Corporation.</DELETED>
<DELETED> (6) Digital asset.--The term ``digital asset''
means any digital representation of value which is recorded on
a cryptographically-secured distributed ledger.</DELETED>
<DELETED> (7) Distributed ledger.--The term ``distributed
ledger'' means technology in which data is shared across a
network that creates a public digital ledger of verified
transactions or information among network participants and
cryptography is used to link the data to maintain the integrity
of the public ledger and execute other functions.</DELETED>
<DELETED> (8) Federal qualified nonbank payment stablecoin
issuer.--The term ``Federal qualified nonbank payment
stablecoin issuer'' means a nonbank entity, other than a State
qualified payment stablecoin issuer, approved by the
Comptroller, pursuant to section 5, to issue payment
stablecoins.</DELETED>
<DELETED> (9) Institution-affiliated party.--With respect to
a permitted payment stablecoin issuer, the term ``institution-
affiliated party'' means any director, officer, employee, or
controlling stockholder of the permitted payment stablecoin
issuer.</DELETED>
<DELETED> (10) Insured depository institution.--The term
``insured depository institution'' means--</DELETED>
<DELETED> (A) an insured depository institution, as
defined in section 3 of the Federal Deposit Insurance
Act (12 U.S.C. 1813); and</DELETED>
<DELETED> (B) an insured credit union, as defined in
section 101 of the Federal Credit Union Act (12 U.S.C.
1752).</DELETED>
<DELETED> (11) Monetary value.--The term ``monetary value''
means a national currency or deposit (as defined in section 3
of the Federal Deposit Insurance Act) denominated in a national
currency.</DELETED>
<DELETED> (12) Money.--The term ``money'' means any
financial instrument that is--</DELETED>
<DELETED> (A) legal tender;</DELETED>
<DELETED> (B) required to be received by a taxing
authority in satisfaction of tax obligations;
or</DELETED>
<DELETED> (C) widely accepted in an economy for the
payment of goods or services.</DELETED>
<DELETED> (13) National currency.--The term ``national
currency'' means each of the following:</DELETED>
<DELETED> (A) A Federal Reserve note (as the term is
used in the first undesignated paragraph of section 16
of the Federal Reserve Act (12 U.S.C. 411)).</DELETED>
<DELETED> (B) Money standing to the credit of an
account with a Federal Reserve Bank.</DELETED>
<DELETED> (C) Money issued by a foreign central
bank.</DELETED>
<DELETED> (D) Money issued by an intergovernmental
organization pursuant to an agreement by 1 or more
governments.</DELETED>
<DELETED> (14) Nonbank entity.--The term ``nonbank entity''
means a person that is not a depository institution or
subsidiary of a depository institution.</DELETED>
<DELETED> (15) Payment stablecoin.--The term ``payment
stablecoin''--</DELETED>
<DELETED> (A) means a digital asset--</DELETED>
<DELETED> (i) that is or is designed to be
used as a means of payment or settlement;
and</DELETED>
<DELETED> (ii) the issuer of which--
</DELETED>
<DELETED> (I) is obligated to
convert, redeem, or repurchase for a
fixed amount of monetary value, not
including a digital asset denominated
in a fixed amount of monetary
value;</DELETED>
<DELETED> (II) represents that such
issuer will maintain or creates the
reasonable expectation that it will
maintain a stable value relative to the
value of a fixed amount of monetary
value; or</DELETED>
<DELETED> (III) has complied with
the authorization requirements of this
Act; and</DELETED>
<DELETED> (B) that--</DELETED>
<DELETED> (i) is not a national
currency;</DELETED>
<DELETED> (ii) is not a deposit (as defined
in section 3 of the Federal Deposit Insurance
Act), including a deposit recorded using
distributed ledger technology;</DELETED>
<DELETED> (iii) does not offer a payment of
yield or interest; and</DELETED>
<DELETED> (iv) is not a security, as defined
in section 2 of the Securities Act of 1933 (15
U.S.C. 77b), section 3 of the Securities
Exchange Act of 1934 (15 U.S.C. 78c), or
section 2 of the Investment Company Act of 1940
(15 U.S.C. 80a-2), other than a bond, note,
evidence of indebtedness, or investment
contract satisfying the conditions described in
subparagraph (A).</DELETED>
<DELETED> (16) Permitted payment stablecoin issuer.--The
term ``permitted payment stablecoin issuer'' means a person
incorporated in the United States that is--</DELETED>
<DELETED> (A) a subsidiary of an insured depository
institution that has been approved to issue payment
stablecoins under section 5;</DELETED>
<DELETED> (B) a Federal qualified nonbank payment
stablecoin issuer that has been approved to issue
payment stablecoins under section 5; or</DELETED>
<DELETED> (C) a State qualified payment stablecoin
issuer.</DELETED>
<DELETED> (17) Person.--The term ``person'' means an
individual, partnership, company, corporation, association,
trust, estate, cooperative organization, or other business
entity, incorporated or unincorporated.</DELETED>
<DELETED> (18) Primary federal payment stablecoin
regulator.--The term ``primary Federal payment stablecoin
regulator'' means--</DELETED>
<DELETED> (A) with respect to a subsidiary of an
insured depository institution (other than an insured
credit union), the appropriate Federal banking agency
(as defined under section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813)) of such insured
depository institution;</DELETED>
<DELETED> (B) with respect to an insured credit
union or a subsidiary of an insured credit union, the
National Credit Union Administration;</DELETED>
<DELETED> (C) with respect to a State chartered
depository institution not specified under subparagraph
(A), the Corporation, the Comptroller, or the Board;
and</DELETED>
<DELETED> (D) with respect to a Federal qualified
nonbank payment stablecoin issuer or any entity
chartered by the Comptroller, the
Comptroller.</DELETED>
<DELETED> (19) Registered public accounting firm.--The term
``registered public accounting firm'' has the meaning given
that term under section 2 of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7201).</DELETED>
<DELETED> (20) State.--The term ``State'' means each of the
several States of the United States, the District of Columbia,
and each territory of the United States.</DELETED>
<DELETED> (21) State qualified payment stablecoin issuer.--
The term ``State qualified payment stablecoin issuer'' means an
entity that is legally established under the laws of a State
and approved to issue payment stablecoins by a State payment
stablecoin regulator.</DELETED>
<DELETED> (22) State payment stablecoin regulator.--The term
``State payment stablecoin regulator'' means a State agency
that has primary regulatory and supervisory authority in such
State over entities that issue payment stablecoins.</DELETED>
<DELETED> (23) State chartered depository institution.--The
term ``State chartered depository institution'' has the meaning
given the term ``State depository institution'' in section 3(c)
of the Federal Deposit Insurance Act (12 U.S.C.
1813(c)).</DELETED>
<DELETED> (24) Subsidiary of an insured credit union.--With
respect to an insured credit union, the term ``subsidiary of an
insured credit union'' means--</DELETED>
<DELETED> (A) an organization providing services to
the insured credit union that are associated with the
routine operations of credit unions, as described under
section 107(7)(I) of the Federal Credit Union Act (12
U.S.C. 1757(7)(I)); and</DELETED>
<DELETED> (B) a credit union service organization,
as such term is used under part 712 of title 12, Code
of Federal Regulations, with respect to which the
insured credit union has an ownership interest or to
which the insured credit union has extended a
loan.</DELETED>
<DELETED>SEC. 3. ISSUANCE AND TREATMENT OF PAYMENT
STABLECOINS.</DELETED>
<DELETED> (a) Issue.--It shall be unlawful for any person other than
a permitted payment stablecoin issuer to issue a payment stablecoin in
the United States.</DELETED>
<DELETED> (b) Treatment.--A payment stablecoin that is not issued by
a permitted payment stablecoin issuer shall not be acceptable as a
settlement asset to facilitate wholesale payments between banking
organizations or by a payment infrastructure to facilitate exchange and
settlement among banking organizations.</DELETED>
<DELETED> (c) Penalty for Violation.--</DELETED>
<DELETED> (1) In general.--Whoever knowingly participates in
a violation of subsection (a) shall be fined not more than
$1,000,000 for each such violation, imprisoned for not more
than 5 years, or both.</DELETED>
<DELETED> (2) Referral to attorney general.--If a primary
Federal payment stablecoin regulator has reason to believe that
any person has knowingly violated subsection (a), the primary
Federal payment stablecoin regulator shall refer the matter to
the Attorney General.</DELETED>
<DELETED>SEC. 4. REQUIREMENTS FOR ISSUING PAYMENT
STABLECOINS.</DELETED>
<DELETED> (a) Standards for the Issuance of Payment Stablecoins.--
</DELETED>
<DELETED> (1) In general.--Permitted payment stablecoin
issuers shall--</DELETED>
<DELETED> (A) maintain reserves backing the
outstanding payment stablecoins of the permitted
payment stablecoin issuer on an at least 1 to 1 basis,
with reserves comprising--</DELETED>
<DELETED> (i) United States coins and
currency (including Federal reserve notes) or
money standing to the credit of an account with
a Federal Reserve Bank;</DELETED>
<DELETED> (ii) funds held as demand deposits
(or other deposits that may be withdrawn upon
request at any time) or insured shares at an
insured depository institution (including any
foreign branches and agencies of an insured
depository institution), subject to limitations
established by the Corporation and the National
Credit Union Administration, as applicable, to
address safety and soundness risks of such
insured depository institution;</DELETED>
<DELETED> (iii) Treasury bills, notes, or
bonds--</DELETED>
<DELETED> (I) with a remaining
maturity of 93 days or less;
or</DELETED>
<DELETED> (II) issued with a
maturity of 93 days or less;</DELETED>
<DELETED> (iv) repurchase agreements with
the permitted payment stablecoin issuer acting
as a seller of securities and with an overnight
maturity that are backed by Treasury bills with
a maturity of 93 days or less;</DELETED>
<DELETED> (v) reverse repurchase agreements
with the permitted payment stablecoin issuer
acting as a purchaser of securities and with an
overnight maturity that are collateralized by
Treasury notes, bills, or bonds on an overnight
basis, subject to overcollateralization in line
with standard market terms, that are--
</DELETED>
<DELETED> (I) tri-party;</DELETED>
<DELETED> (II) centrally cleared
through a clearing house registered
with the Securities and Exchange
Commission; or</DELETED>
<DELETED> (III) bilateral with a
counterparty that the issuer has
determined to be adequately
creditworthy even in the event of
severe market stress;</DELETED>
<DELETED> (vi) securities issued by an
investment company registered under section
8(a) of the Investment Company Act of 1940 (15
U.S.C. 80a-8(a)) that operates as a money
market fund in compliance with rule 2a-7 issued
under that Act (or any successor rule) and that
are invested solely in underlying assets
described in clauses (i) through (iv) of
subparagraph (A);</DELETED>
<DELETED> (vii) any other similarly liquid
asset approved by the primary Federal payment
stablecoin regulator, in consultation with the
State payment stablecoin regulator, if
applicable, of the permitted payment stablecoin
issuer; or</DELETED>
<DELETED> (viii) any reserve described in
clauses (i) through (vii) in tokenized form,
provided that such reserves comply with all
applicable laws and regulations;</DELETED>
<DELETED> (B) publicly disclose the issuer's
redemption policy;</DELETED>
<DELETED> (C) establish procedures for timely
redemption of outstanding payment stablecoins;
and</DELETED>
<DELETED> (D) publish the monthly composition of the
issuer's reserves on the website of the issuer,
containing--</DELETED>
<DELETED> (i) the total number of
outstanding payment stablecoins issued by the
issuer; and</DELETED>
<DELETED> (ii) the amount and composition of
the reserves described under subparagraph
(A).</DELETED>
<DELETED> (2) Prohibition on rehypothecation.--Reserves
required under paragraph (1)(A) may not be pledged,
rehypothecated, or reused by the permitted payment stablecoin
issuer, either directly or indirectly, except for the purpose
of--</DELETED>
<DELETED> (A) satisfying margin obligations in
connection with investments in permitted reserves under
clauses (iv) and (v) of paragraph (1)(A);</DELETED>
<DELETED> (B) satisfying obligations associated with
the use or receipt of provision of standard custodial
services; or</DELETED>
<DELETED> (C) creating liquidity to meet reasonable
expectations of requests to redeem payment stablecoins,
such that reserves in the form of Treasury bills may be
sold as purchased securities for repurchase agreements
with a maturity of 93 days or less, provided that
either--</DELETED>
<DELETED> (i) the repurchase agreements are
cleared by a clearing agency registered with
the Securities and Exchange Commission;
or</DELETED>
<DELETED> (ii) the permitted payment
stablecoin issuer receives the prior approval
of its primary Federal payment stablecoin
regulator or State payment stablecoin
regulator, as applicable.</DELETED>
<DELETED> (3) Monthly certification; examination of reports
by registered public accounting firm.--</DELETED>
<DELETED> (A) In general.--A permitted payment
stablecoin issuer shall, each month, have the
information disclosed in the previous month-end report
required under paragraph (1)(D) examined by a
registered public accounting firm.</DELETED>
<DELETED> (B) Certification.--Each month, the Chief
Executive Officer and Chief Financial Officer of a
permitted payment stablecoin issuer shall submit a
certification as to the accuracy of the monthly report
to, as applicable--</DELETED>
<DELETED> (i) the primary Federal payment
stablecoin regulator of the permitted payment
stablecoin issuer; or</DELETED>
<DELETED> (ii) the State payment stablecoin
regulator of the permitted payment stablecoin
issuer.</DELETED>
<DELETED> (C) Criminal penalty.--Any person who
submits a certification required under subparagraph (B)
knowing that such certification is false shall be
subject to the criminal penalties set forth under
section 1350(c) of title 18, United States
Code.</DELETED>
<DELETED> (4) Capital, liquidity, and risk management
requirements.--</DELETED>
<DELETED> (A) In general.--The primary Federal
payment stablecoin regulators shall, jointly, or in the
case of a State qualified payment stablecoin issuer,
the State payment stablecoin regulator shall,
consistent with section 18, issue--</DELETED>
<DELETED> (i) capital requirements
applicable to permitted payment stablecoin
issuers that--</DELETED>
<DELETED> (I) are tailored to the
business model and risk profile of
permitted payment stablecoin
issuers;</DELETED>
<DELETED> (II) do not exceed
requirements which are sufficient to
ensure the ongoing operations of
permitted payment stablecoin issuers;
and</DELETED>
<DELETED> (III) in the case of the
primary Federal payment stablecoin
regulators, if the primary Federal
payment stablecoin regulators determine
that a capital buffer is necessary to
ensure the ongoing operations of
permitted payment stablecoin issuers,
may include capital buffers that are
tailored to the business model and risk
profile of permitted payment stablecoin
issuers;</DELETED>
<DELETED> (ii) regulations implementing the
liquidity standard under clause (i);</DELETED>
<DELETED> (iii) reserve asset
diversification and interest rate risk
management standards applicable to permitted
payment stablecoin issuers that--</DELETED>
<DELETED> (I) are tailored to the
business model and risk profile of
permitted payment stablecoin issuers;
and</DELETED>
<DELETED> (II) do not exceed
standards which are sufficient to
ensure the ongoing operations of
permitted payment stablecoin issuers;
and</DELETED>
<DELETED> (iv) appropriate operational,
compliance, and information technology risk
management standards, including Bank Secrecy
Act and sanctions compliance, that--</DELETED>
<DELETED> (I) are tailored to the
business model and risk profile of
permitted payment stablecoin issuers;
and</DELETED>
<DELETED> (II) are consistent with
applicable law.</DELETED>
<DELETED> (B) Rule of construction.--Nothing in this
paragraph shall be construed to limit--</DELETED>
<DELETED> (i) the authority of the primary
Federal regulators, in prescribing standards
under this paragraph, to tailor or
differentiate among issuers on an individual
basis or by category, taking into consideration
the capital structure, business model risk
profile, complexity, financial activities
(including financial activities of
subsidiaries), size, and any other risk related
factors of permitted payment stablecoin issuers
that the primary Federal regulator determines
appropriate, provided that such tailoring or
differentiation occurs without respect to
whether a permitted payment stablecoin issuer
is regulated by a State payment stablecoin
regulator; or</DELETED>
<DELETED> (ii) the supervisory, regulatory,
or enforcement authority of a Federal banking
agency to further the safe and sound operation
of an institution for which the Federal banking
agency is the appropriate Federal banking
agency (as defined under section 3 of the
Federal Deposit Insurance Act (12 U.S.C.
1813)).</DELETED>
<DELETED> (C) Applicability of existing capital
standards.--</DELETED>
<DELETED> (i) Definitions.--In this
subparagraph--</DELETED>
<DELETED> (I) ``appropriate Federal
banking agency'' has the meaning given
that term in section 3(q) of the
Federal Deposit Insurance Act (12
U.S.C. 1813(q); and</DELETED>
<DELETED> (II) ``depository
institution holding company'' has the
meaning given that term under section
171(a)(3) of the Financial Stability
Act of 2010 (12 U.S.C.
5371(a)(3)).</DELETED>
<DELETED> (ii) Applicability of financial
stability act.--With respect to the
promulgation of rules under subparagraph (A)
and clauses (iii) and (iv) of this
subparagraph, section 171 of the Financial
Stability Act of 2010 (12 U.S.C. 5371) shall
not apply.</DELETED>
<DELETED> (iii) Rules relating to leverage
capital requirements or risk-based capital
requirements.--Any rule issued by an
appropriate Federal banking agency that
imposes, on a consolidated basis, a leverage
capital requirement or risk-based capital
requirement with respect to an insured
depository institution or depository
institution holding company shall provide that,
for purposes of such leverage capital
requirement or risk-based capital requirement,
any insured depository institution or
depository institution holding company that
includes, on a consolidated basis, a permitted
payment stablecoin issuer shall not be required
to hold, with respect to such permitted payment
stablecoin issuer and its assets and
operations, any amount of regulatory capital in
excess of the capital that such permitted
payment stablecoin issuer must maintain under
the capital requirements promulgated pursuant
to paragraph (1)(A)(i).</DELETED>
<DELETED> (iv) Modifications.--Not later
than the earlier of the rulemaking deadline
under section 18 or the date the Federal
payment stablecoin regulators issue regulations
to carry out this section, each appropriate
Federal banking agency shall amend or otherwise
modify any regulation of the Federal banking
agency described in clause (iii) so that such
regulation, as amended or otherwise modified,
complies with clause (iii) of this
subparagraph.</DELETED>
<DELETED> (5) Treatment under the bank secrecy act and
sanctions laws.--</DELETED>
<DELETED> (A) In general.--A permitted payment
stablecoin issuer shall be treated as a financial
institution for purposes of the Bank Secrecy Act, and
as such, shall be subject to all Federal laws
applicable to a financial institution located in the
United States relating to economic sanctions,
prevention of money laundering, customer
identification, and due diligence, including--
</DELETED>
<DELETED> (i) maintenance of an effective
anti-money laundering and economic sanctions
compliance program, which shall include
appropriate risk assessments, verification of
sanctions lists and designation of an officer
to supervise the programs;</DELETED>
<DELETED> (ii) retention of appropriate
records of payment stablecoin
transactions;</DELETED>
<DELETED> (iii) monitoring and reporting
suspicious activity;</DELETED>
<DELETED> (iv) policies and procedures to
block, freeze, and reject specific or
impermissible transactions that violate Federal
or State laws, rules, or regulations;
and</DELETED>
<DELETED> (v) maintenance of an effective
customer identification program, including
identification and verification of account
holders with the permitted payment stablecoin
issuer, high value transactions and appropriate
enhanced due diligence.</DELETED>
<DELETED> (B) Rulemaking.--The Financial Crimes
Enforcement Network shall adopt rules, tailored to the
size and complexity of the permitted payment stablecoin
issuer, to implement subparagraph (A).</DELETED>
<DELETED> (6) Coordination with permitted payment stablecoin
issuers with respect to blocking of property and technological
capabilities to comply with lawful orders.--</DELETED>
<DELETED> (A) In general.--The Secretary of the
Treasury--</DELETED>
<DELETED> (i) shall, to the best of the
Secretary's ability, coordinate with a
permitted payment stablecoin issuer before
taking any action to block and prohibit
transactions in property and interests in
property of a foreign person to ensure that the
permitted payment stablecoin issuer is able to
effectively block a digital asset of the
foreign person upon issue of the digital asset;
and</DELETED>
<DELETED> (ii) is not required to notify any
permitted payment stablecoin issuer of any
intended action described in clause (i) prior
to taking such action.</DELETED>
<DELETED> (B) Compliance with lawful orders.--
</DELETED>
<DELETED> (i) In general.--</DELETED>
<DELETED> (I) Permitted payment
stablecoin issuers.--A permitted
payment stablecoin issuer may issue
payment stablecoins only if the issuer
has the technological capability to
comply and will comply with the terms
of any lawful order.</DELETED>
<DELETED> (II) Foreign payment
stablecoins.--A foreign payment
stablecoin that is not licensed under
this Act may not be publicly offered,
sold, or otherwise made available for
trading in the United States unless the
payment stablecoin issuer has the
technological capability to comply and
will comply with the terms of any
lawful order.</DELETED>
<DELETED> (ii) Lawful order defined.--In
this paragraph, the term ``lawful order'' means
any final and valid writ, process, order, rule,
decree, command, or other requirement issued or
promulgated under Federal law, issued by a
court of competent jurisdiction or by an
authorized Federal agency pursuant to its
statutory authority, that--</DELETED>
<DELETED> (I) requires the permitted
payment stablecoin issuer to seize,
freeze, burn, or prevent the transfer
of payment stablecoins issued by the
permitted payment stablecoin
issuer;</DELETED>
<DELETED> (II) specifies the digital
assets or accounts subject to blocking
with reasonable particularity;
and</DELETED>
<DELETED> (III) is subject to
judicial or administrative review or
appeal as provided by law.</DELETED>
<DELETED> (C) Report required.--Not later than 1
year after the date of enactment of this Act, the
Secretary of the Treasury shall submit to the Committee
on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives a report on the coordination with
permitted payment stablecoin issuers required under
subparagraph (A).</DELETED>
<DELETED> (7) Limitation on payment stablecoin activities.--
</DELETED>
<DELETED> (A) In general.--A permitted payment
stablecoin issuer may only--</DELETED>
<DELETED> (i) issue payment
stablecoins;</DELETED>
<DELETED> (ii) redeem payment
stablecoins;</DELETED>
<DELETED> (iii) manage related reserves,
including purchasing, selling, and holding
reserve assets or providing custodial services
for reserve assets, consistent with State and
Federal law;</DELETED>
<DELETED> (iv) provide custodial or
safekeeping services for payment stablecoins,
required reserves, or private keys of payment
stablecoins, consistent with this Act;
and</DELETED>
<DELETED> (v) undertake other activities
that directly support any of the activities
described in clauses (i) through
(iv).</DELETED>
<DELETED> (B) Rule of construction.--Nothing in
subparagraph (A) shall prevent a permitted payment
stablecoin issuer from engaging in non-payment
stablecoin activities that are allowed by the primary
Federal payment stablecoin regulator or the State
payment stablecoin regulator, as applicable.</DELETED>
<DELETED> (8) Prohibition on tying.--</DELETED>
<DELETED> (A) In general.--A permitted payment
stablecoin issuer may not provide services to a
customer on the condition that the customer obtain an
additional paid product or service from the permitted
payment stablecoin issuer, or any of its subsidiaries,
or agree to not obtain an additional product or service
from a competitor.</DELETED>
<DELETED> (B) Regulations.--The Board may issue such
regulations as are necessary to carry out this
subparagraph, and, in consultation with the Comptroller
and the Corporation, may by regulation or order, permit
such exceptions to clause (i) as the Board considers
will not be contrary to the purpose of this
Act.</DELETED>
<DELETED> (9) Regulation by the comptroller.--</DELETED>
<DELETED> (A) In general.--A Federal qualified
nonbank payment stablecoin issuer shall be regulated
and supervised exclusively by the Comptroller, which
shall have authority, in coordination with other
relevant primary Federal payment stablecoin regulators
and State payment stablecoin regulators, to issue such
regulations and orders as necessary to ensure financial
stability and implement this subsection.</DELETED>
<DELETED> (B) Conforming amendment.--Section 324(b)
of the Revised Statutes (12 U.S.C. 1(b)) is amended by
adding at the end the following:</DELETED>
<DELETED> ``(3) Regulation of federal qualified nonbank
payment stablecoin issuers.--The Comptroller of the Currency
shall, in coordination with other relevant regulators and
consistent with section 18 of the Guiding and Establishing
National Innovation for U.S. Stablecoins Act of 2025, issue
such regulations and orders as necessary to ensure financial
stability and implement section 4(a) of that Act.''.</DELETED>
<DELETED> (10) Audits and reports.--</DELETED>
<DELETED> (A) Annual financial statement.--
</DELETED>
<DELETED> (i) In general.--A permitted
payment stablecoin issuer with more than
$50,000,000,000 in consolidated total
outstanding issuance, that is not subject to
the reporting requirements under sections 13(a)
or 15(d) of the Securities and Exchange Act of
1934 (15 U.S.C. 78m, 78o(d)), shall prepare, in
accordance with generally accepted accounting
principles, an annual financial statement,
which shall include the disclosure of any
related party transactions, as defined by such
generally accepted accounting
principles.</DELETED>
<DELETED> (ii) Auditor.--A registered public
accounting firm shall perform an audit of the
annual financial statements described in clause
(i).</DELETED>
<DELETED> (iii) Standards.--An audit
described in clause (ii) shall be conducted in
accordance with all applicable auditing
standards established by the Public Company
Accounting Oversight Board, including those
relating to auditor independence, internal
controls, and related party
transactions.</DELETED>
<DELETED> (iv) Rule of construction.--
Nothing in this subparagraph shall be construed
to limit, alter, or expand the jurisdiction of
the Public Company Accounting Oversight Board
over permitted payment stablecoin issuers or
registered public accounting firms.</DELETED>
<DELETED> (B) Public disclosure and submission to
federal regulators.--Each permitted payment stablecoin
issuer required to prepare an audited annual financial
statement under subparagraph (A) shall:</DELETED>
<DELETED> (i) make such audited financial
statements publicly available on the website of
the permitted payment stablecoin issuer;
and</DELETED>
<DELETED> (ii) submit such audited financial
statements annually to their primary Federal
payment stablecoin regulator.</DELETED>
<DELETED> (C) Consultation.--The primary Federal
payment stablecoin regulators may consult with the
Public Company Accounting Oversight Board to determine
best practices for determining audit oversight and to
detect fraud, material misstatements, and other
financial misrepresentations that could mislead
permitted payment stablecoin holders.</DELETED>
<DELETED> (b) State-level Regulatory Regimes.--</DELETED>
<DELETED> (1) Option for state-level regulatory regime.--
Notwithstanding the Federal regulatory framework established
under subsection (a), a State qualified payment stablecoin
issuer with a consolidated total outstanding issuance of not
more than $10,000,000,000 may opt for regulation under a State-
level regulatory regime, provided that the State-level
regulatory regime is substantially similar to the Federal
regulatory framework under that subsection.</DELETED>
<DELETED> (2) Principles.--The Secretary of the Treasury
shall, through notice and comment rulemaking, establish broad
based principles for determining whether a State-level
regulatory regime is substantially similar to the Federal
regulatory framework under subsection (a).</DELETED>
<DELETED> (3) Review.--State payment stablecoin regulators
shall review State-level regulatory regimes according to the
principles established by the Secretary of the Treasury under
paragraph (2) and for the purposes of establishing any
necessary cooperative agreements to implement section
7(f).</DELETED>
<DELETED> (4) Certification.--</DELETED>
<DELETED> (A) Initial certification.--Subject to
subparagraph (B), not later than 1 year after the
effective date of this Act, a State payment stablecoin
regulator shall submit to the Secretary of the Treasury
an initial certification that the State-level
regulatory regime meets the criteria for substantial
similarity established pursuant to paragraph
(2).</DELETED>
<DELETED> (B) Form of certification.--The initial
certification required under subparagraph (A) shall
contain, in a form prescribed by the Secretary of the
Treasury, an attestation that the State-level
regulatory regime meets the criteria for substantial
similarity established pursuant to paragraph
(2).</DELETED>
<DELETED> (C) Annual recertification.--Not later
than a date to be determined by the Secretary each
year, a State payment stablecoin regulator shall submit
to the Secretary of the Treasury an additional
certification that confirms the accuracy of initial
certification submitted under subparagraph
(A).</DELETED>
<DELETED> (5) Not substantially similar.--</DELETED>
<DELETED> (A) In general.--If a State payment
stablecoin regulator determines that the criteria
established under paragraph (2) are not meet and the
State payment stablecoin regulator does not submit a
certification under paragraph (4), then a permitted
payment stablecoin issuer operating under this
subsection shall be subject to the Federal regulatory
framework as described in subsection (c),
notwithstanding the total issuance threshold
therein.</DELETED>
<DELETED> (B) Treasury review.--Not later than 30
days after the date of receipt of a certification under
paragraph (4), the Secretary reject the certification
if the Secretary determines that the State-level
regulatory regime is not substantially similar to the
Federal regulatory framework under subsection (a), and
the permitted payment stablecoin issuer shall be
subject to the Federal regulatory framework as
described in subsection (c), notwithstanding the total
issuance threshold therein.</DELETED>
<DELETED> (C) Appellate review.--A State payment
stablecoin regulator may challenge the determination of
the Secretary of the Treasury under this paragraph in
the United States Court of Appeals for the District of
Columbia Circuit.</DELETED>
<DELETED> (6) List.--The Secretary of the Treasury shall
publish and maintain in the Federal Register and on the website
of the Department of the Treasury a list of States that have
submitted initial certifications and recertifications under
paragraph (4).</DELETED>
<DELETED> (c) Transition to Federal Oversight.--</DELETED>
<DELETED> (1) Depository institution.--A State chartered
depository institution that is a State qualified payment
stablecoin issuer with a payment stablecoin with a consolidated
total outstanding issuance of more than $10,000,000,000 shall--
</DELETED>
<DELETED> (A) not later than 360 days after the
payment stablecoin reaches such threshold, transition
to the Federal regulatory framework of the primary
Federal payment stablecoin regulator of the State
chartered depository institution, which shall be
administered by the State payment stablecoin regulator
of the State chartered depository institution and the
primary Federal payment stablecoin regulator acting
jointly; or</DELETED>
<DELETED> (B) beginning on the date the payment
stablecoin reaches such threshold, cease issuing new
payment stablecoins until the payment stablecoin is
under the $10,000,000,000 consolidated total
outstanding issuance threshold.</DELETED>
<DELETED> (2) Other institutions.--A State qualified payment
stablecoin issuer not described in paragraph (1) with a payment
stablecoin with a consolidated total outstanding issuance of
more than $10,000,000,000 shall--</DELETED>
<DELETED> (A) not later than 360 days after the
payment stablecoin reaches such threshold, transition
to the Federal regulatory framework under subsection
(a) administered by the State payment stablecoin
regulator of the State qualified payment stablecoin
issuer; or</DELETED>
<DELETED> (B) beginning on the date the payment
stablecoin reaches such threshold, cease issuing new
payment stablecoins until the payment stablecoin is
under the $10,000,000,000 consolidated total
outstanding issuance threshold.</DELETED>
<DELETED> (3) Waiver.--</DELETED>
<DELETED> (A) In general.--Notwithstanding
paragraphs (1) and (2), the applicable primary Federal
payment stablecoin regulator may permit a State
qualified payment stablecoin issuer with a payment
stablecoin with a consolidated total outstanding
issuance of more than $10,000,000,000 to remain solely
supervised by a State payment stablecoin
regulator.</DELETED>
<DELETED> (B) Criteria for waiver.--The primary
Federal payment stablecoin regulator shall consider the
following exclusive criteria in determining whether to
issue a waiver under this paragraph:</DELETED>
<DELETED> (i) The capital maintained by the
State qualified payment stablecoin
issuer.</DELETED>
<DELETED> (ii) The past operations and
examination history of the State qualified
payment stablecoin issuer.</DELETED>
<DELETED> (iii) The experience of the State
payment stablecoin regulator in supervising
payment stablecoin and digital asset
activities.</DELETED>
<DELETED> (iv) The laws and rules applicable
to, and the supervisory framework of, the State
qualified payment stablecoin issuer with
respect to payment stablecoins and digital
assets.</DELETED>
<DELETED> (C) Rule of construction.--A State
qualified payment stablecoin issuer subject to Federal
oversight under paragraph (1) or (2) of this subsection
that does not receive a waiver under this paragraph
shall continue to be supervised by the State payment
stablecoin regulator of the State qualified payment
stablecoin issuer along jointly with the primary
Federal payment stablecoin regulator. Nothing in this
subsection shall require the State qualified payment
stablecoin issuer to convert to a Federal
charter.</DELETED>
<DELETED> (d) Misrepresentation of Insured Status; Marketing.--
</DELETED>
<DELETED> (1) In general.--Payment stablecoins shall not be
backed by the full faith and credit of the United States,
guaranteed by the United States Government, subject to deposit
insurance by the Federal Deposit Insurance Corporation, or
subject to share insurance by the National Credit Union
Administration.</DELETED>
<DELETED> (2) Misrepresentation of insured status.--
</DELETED>
<DELETED> (A) In general.--It shall be unlawful to
represent that payment stablecoins are backed by the
full faith and credit of the United States, guaranteed
by the United States Government, or subject to Federal
deposit insurance or Federal share insurance.</DELETED>
<DELETED> (B) Penalty.--A violation of subparagraph
(A) shall be considered a violation of section 18(a)(4)
of the Federal Deposit Insurance Act (12 U.S.C.
1828(a)(4)) or section 709 of title 18, United States
Code, as applicable.</DELETED>
<DELETED> (3) Marketing.--It shall be unlawful to market a
digital asset in the United States as a payment stablecoin
unless the digital asset is issued pursuant to this
Act.</DELETED>
<DELETED> (e) Officers or Directors Convicted of Certain Felonies.--
</DELETED>
<DELETED> (1) In general.--No individual who has been
convicted of a felony offense involving insider trading,
embezzlement, cybercrime, money laundering, financing of
terrorism, or financial fraud may serve as--</DELETED>
<DELETED> (A) an officer of a payment stablecoin
issuer; or</DELETED>
<DELETED> (B) a director of a payment stablecoin
issuer.</DELETED>
<DELETED> (2) Penalty.--</DELETED>
<DELETED> (A) In general.--Whoever knowingly
participates in a violation of paragraph (1) shall be
fined not more than $1,000,000 for each such violation,
imprisoned for not more than 5 years; or
both.</DELETED>
<DELETED> (B) Referral to attorney general.--If a
Federal payment stablecoin regulator has reason to
believe that any person has knowingly violated
paragraph (1), the Federal payment stablecoin regulator
shall refer the matter to the Attorney
General.</DELETED>
<DELETED> (f) Rulemaking.--</DELETED>
<DELETED> (1) In general.--Consistent with section 18, the
primary Federal payment stablecoin regulators and State payment
stablecoin regulators shall issue such regulations as may be
necessary to establish a payment stablecoin regulatory
framework necessary to administer and carry out the
requirements of this section, including to establish
conditions, and to prevent evasions thereof.</DELETED>
<DELETED> (2) Joint issuance of regulation.--All regulations
issued to carry out this section shall be issued jointly by the
primary Federal payment stablecoin regulators, if not issued by
a State payment stablecoin regulator.</DELETED>
<DELETED>SEC. 5. APPROVAL OF SUBSIDIARIES OF INSURED DEPOSITORY
INSTITUTIONS AND FEDERAL QUALIFIED NONBANK PAYMENT
STABLECOIN ISSUERS.</DELETED>
<DELETED> (a) Application.--</DELETED>
<DELETED> (1) In general.--Each primary Federal payment
stablecoin regulator shall receive, review, and consider for
approval applications from any insured depository institution
that seeks to issue payment stablecoins through a subsidiary
and any nonbank entity that seeks to issue payment stablecoins
as a Federal qualified nonbank payment stablecoin issuer. Each
primary Federal payment stablecoin regulator shall establish a
process and framework for the licensing, regulation,
examination, and supervision of such entities that prioritizes
the safety and soundness of such entities.</DELETED>
<DELETED> (2) Authority to issue regulations and process
applications.--The primary Federal payment stablecoin
regulators shall, before the date described in section 18--
</DELETED>
<DELETED> (A) issue regulations consistent with that
section to carry out this section; and</DELETED>
<DELETED> (B) pursuant to the regulations described
in subparagraph (A), accept and process applications
under this Act.</DELETED>
<DELETED> (3) Mandatory approval process.--The primary
Federal payment stablecoin regulator shall, upon receipt of a
substantially complete application, evaluate and make a
determination on each application based on the criteria
established under this Act.</DELETED>
<DELETED> (b) Evaluation of Applications.--A substantially complete
application received under subsection (a) shall be evaluated by the
primary Federal payment stablecoin regulator using the factors
described in subsection (c).</DELETED>
<DELETED> (c) Factors to Be Considered.--The factors described in
this subsection are the following:</DELETED>
<DELETED> (1) The ability of the applicant (or, in the case
of an applicant that is an insured depository institution, the
subsidiary of the applicant), based on financial condition and
resources, to meet the requirements set forth under section
4.</DELETED>
<DELETED> (2) Whether an individual who has been convicted
of a felony offense involving insider trading, embezzlement,
cybercrime, money laundering, financing of terrorism, or
financial fraud is serving as an officer or director of the
applicant.</DELETED>
<DELETED> (3) Any other factors established by the primary
Federal payment stablecoin regulator that are necessary to
ensure the safety and soundness of the permitted payment
stablecoin issuer.</DELETED>
<DELETED> (d) Timing for Decision; Grounds for Denial.--</DELETED>
<DELETED> (1) Timing for decisions on applications.--
</DELETED>
<DELETED> (A) In general.--Not later than 120 days
after receiving a substantially complete application
under subsection (a), a primary Federal payment
stablecoin regulator shall render a decision on the
application.</DELETED>
<DELETED> (B) Substantially complete.--</DELETED>
<DELETED> (i) In general.--For purposes of
subparagraph (A), an application shall be
considered substantially complete if the
application contains sufficient information for
the primary Federal payment stablecoin
regulator to render a decision on whether the
applicant satisfies the criteria under
subsection (c).</DELETED>
<DELETED> (ii) Notification.--Not later than
30 days after receiving an application under
subsection (a), a primary Federal payment
stablecoin regulator shall notify the applicant
whether the primary Federal payment stablecoin
regulator considers the application to be
substantially complete and, if the application
is not substantially complete, the additional
information the applicant must provide in order
for the application to be considered
substantially complete.</DELETED>
<DELETED> (iii) Material change in
circumstances.--An application considered
substantially complete under this subparagraph
remains substantially complete unless there is
a material change in circumstances that
requires the primary Federal payment stablecoin
regulator to treat the application as a new
application.</DELETED>
<DELETED> (2) Denial of application.--</DELETED>
<DELETED> (A) Grounds for denial.--</DELETED>
<DELETED> (i) In general.--The primary
Federal payment stablecoin regulator shall only
deny a complete application received under
subsection (a) if the regulator determines that
the activities of the applicant would be unsafe
or unsound based on the factors described in
subsection (c).</DELETED>
<DELETED> (ii) Issuance not ground for
denial.--The issuance of a payment stablecoin
on an open, public, or decentralized network
shall not be a valid ground for denial of an
application.</DELETED>
<DELETED> (B) Explanation required.--If the primary
Federal payment stablecoin regulator denies a complete
application received under subsection (a), not later
than 30 days after the date of such denial, the
regulator shall provide the applicant with written
notice explaining the denial with specificity,
including all findings made by the regulator with
respect to all identified material shortcomings in the
application, including actionable recommendations on
how the applicant could address the identified material
shortcomings.</DELETED>
<DELETED> (C) Opportunity for hearing; final
determination.--</DELETED>
<DELETED> (i) In general.--Not later than 30
days after the date of receipt of any notice of
the denial of an application under this
section, the applicant may request, in writing,
an opportunity for a written or oral hearing
before the primary Federal payment stablecoin
regulator to appeal the denial.</DELETED>
<DELETED> (ii) Timing.--Upon receipt of a
timely request, the primary Federal payment
stablecoin regulator shall notice a time (not
later than 30 days after the date of receipt of
the request) and place at which the applicant
may appear, personally or through counsel, to
submit written materials or provide oral
testimony and oral argument).</DELETED>
<DELETED> (iii) Final determination.--Not
later than 60 days after the date of a hearing
under this subparagraph, the primary Federal
payment stablecoin regulator shall notify the
applicant of a final determination, which shall
contain a statement of the basis for that
determination, with specific
findings.</DELETED>
<DELETED> (iv) Notice if no hearing.--If an
applicant does not make a timely request for a
hearing under this subparagraph, the primary
Federal payment stablecoin regulator shall
notify the applicant, not later than 10 days
after the date by which the applicant may
request a hearing under this subparagraph, in
writing, that the denial of the application is
a final determination of the primary Federal
payment stablecoin regulator.</DELETED>
<DELETED> (3) Failure to render a decision.--If the primary
Federal payment stablecoin regulator fails to render a decision
on a complete application within the time period specified in
paragraph (1), the application shall be deemed
approved.</DELETED>
<DELETED> (4) Right to reapply.--The denial of an
application under this section shall not prohibit the applicant
from filing a subsequent application.</DELETED>
<DELETED> (e) Report on Pending Applications.--The primary Federal
payment stablecoin regulators shall annually report to Congress on the
applications under subsection (a) that have been pending for 180 days
or more since the date the initial application was filed and for which
the applicant has been informed that the application remains
incomplete, including documentation on the status of such applications
and why such applications have not yet been approved.</DELETED>
<DELETED> (f) Rulemaking.--Consistent with section 18, the primary
Federal payment stablecoin regulators shall rules necessary for the
regulation of the issuance of payment stablecoins, but may not impose
requirements in addition to the requirements specified under section
4.</DELETED>
<DELETED>SEC. 6. SUPERVISION AND ENFORCEMENT WITH RESPECT TO
SUBSIDIARIES OF INSURED DEPOSITORY INSTITUTIONS AND
COMPTROLLER-REGULATED ENTITIES.</DELETED>
<DELETED> (a) Supervision.--</DELETED>
<DELETED> (1) In general.--Each permitted payment stablecoin
issuer that is not a State qualified payment stablecoin issuer
with a payment stablecoin with a consolidated total outstanding
issuance of less than $10,000,000,000 shall be subject to
supervision by the appropriate primary Federal payment
stablecoin regulator.</DELETED>
<DELETED> (2) Submission of reports.--Each permitted payment
stablecoin issuer described in paragraph (1) shall, upon
request, submit to its primary Federal payment stablecoin
regulator a report on--</DELETED>
<DELETED> (A) the financial condition of the
permitted payment stablecoin issuer;</DELETED>
<DELETED> (B) the systems of the permitted payment
stablecoin issuer for monitoring and controlling
financial and operating risks; and</DELETED>
<DELETED> (C) compliance by the permitted payment
stablecoin issuer (and any subsidiary thereof) with
this Act.</DELETED>
<DELETED> (3) Examinations.--The primary Federal payment
stablecoin regulator shall examine a permitted payment
stablecoin issuer described in paragraph (1) in order to
assess--</DELETED>
<DELETED> (A) the nature of the operations and
financial condition of the permitted payment stablecoin
issuer;</DELETED>
<DELETED> (B) the financial, operational,
technological, and other risks within the permitted
payment stablecoin issuer that may pose a threat to--
</DELETED>
<DELETED> (i) the safety and soundness of
the permitted payment stablecoin issuer;
or</DELETED>
<DELETED> (ii) the stability of the
financial system of the United States;
and</DELETED>
<DELETED> (C) the systems of the permitted payment
stablecoin issuer for monitoring and controlling the
risks described in subparagraph (B).</DELETED>
<DELETED> (4) Requirements for efficiency.--</DELETED>
<DELETED> (A) Use of existing reports.--In
supervising and examining a permitted payment
stablecoin issuer under this subsection, the primary
Federal payment stablecoin regulator shall, to the
fullest extent possible, use existing reports and other
supervisory information.</DELETED>
<DELETED> (B) Avoidance of duplication.--A primary
Federal payment stablecoin regulator shall, to the
fullest extent possible, avoid duplication of
examination activities, reporting requirements, and
requests for information in carrying out this
subsection with respect to a permitted payment
stablecoin issuer.</DELETED>
<DELETED> (C) Consideration of burden.--A primary
Federal payment stablecoin regulator shall, with
respect to any examination or request for the
submission of a report under this subsection, only
request examinations and reports at a cadence and in a
format that is similar to those required for similarly
situated entities regulated by the primary Federal
payment stablecoin regulator.</DELETED>
<DELETED> (b) Enforcement.--</DELETED>
<DELETED> (1) Suspension or revocation of registration.--The
primary Federal payment stablecoin regulator of a permitted
payment stablecoin issuer that is not a State qualified payment
stablecoin issuer may prohibit the permitted payment stablecoin
issuer from issuing payment stablecoins, if the primary Federal
payment stablecoin regulator determines that such permitted
payment stablecoin issuer, or an institution-affiliated party
of the permitted payment stablecoin issuer--</DELETED>
<DELETED> (A) is recklessly violating or has
recklessly violated this Act or any regulation or order
issued under this Act; or</DELETED>
<DELETED> (B) is recklessly violating or has
recklessly violated any condition imposed in writing by
the primary Federal payment stablecoin regulator in
connection with a written agreement entered into
between the permitted payment stablecoin issuer and the
primary Federal payment stablecoin regulator.</DELETED>
<DELETED> (2) Cease-and-desist proceedings.--If the primary
Federal payment stablecoin regulator of a permitted payment
stablecoin issuer that is not a State qualified payment
stablecoin issuer has reasonable cause to believe that the
permitted payment stablecoin issuer or any institution-
affiliated party of the permitted payment stablecoin issuer is
violating, has violated, or is attempting to violate this Act,
any regulation or order issued under this Act, or any written
agreement entered into with the primary Federal payment
stablecoin regulator or condition imposed in writing by the
primary Federal payment stablecoin regulator in connection with
any application or other request, the primary Federal payment
stablecoin regulator may, by provisions that are mandatory or
otherwise, order the permitted payment stablecoin issuer or
institution-affiliated party of the permitted payment
stablecoin issuer to--</DELETED>
<DELETED> (A) cease and desist from such violation
or practice; or</DELETED>
<DELETED> (B) take affirmative action to correct the
conditions resulting from any such violation or
practice.</DELETED>
<DELETED> (3) Removal and prohibition authority.--The
primary Federal payment stablecoin regulator of a permitted
payment stablecoin issuer that is not a State qualified payment
stablecoin issuer may remove an institution-affiliated party of
the permitted payment stablecoin issuer from their position or
office or prohibit further participation in the affairs of the
permitted payment stablecoin issuer or all such permitted
payment stablecoin issuers by such institution-affiliated
party, if the primary Federal payment stablecoin regulator
determines that--</DELETED>
<DELETED> (A) the institution-affiliated party has
knowingly committed a violation or attempted violation
of this Act or any regulation or order issued under
this Act; or</DELETED>
<DELETED> (B) the institution-affiliated party has
knowingly committed a violation of any provision of
subchapter II of chapter 53 of title 31, United States
Code.</DELETED>
<DELETED> (4) Procedures.--</DELETED>
<DELETED> (A) In general.--If a primary Federal
payment stablecoin regulator identifies a violation or
attempted violation of this Act or makes a
determination under paragraph (1), (2), or (3), the
primary Federal payment stablecoin regulator shall
comply with the procedures set forth in subsections (b)
and (e) of sections 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818).</DELETED>
<DELETED> (B) Judicial review.--A person aggrieved
by a final action under this subsection may obtain
judicial review of such action exclusively as provided
in section 8(h) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(h)).</DELETED>
<DELETED> (C) Injunction.--The primary Federal
payment stablecoin regulator may, in the discretion of
the regulator, follow the procedures provided in
section 8(i)(1) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(i)(1)) for judicial enforcement of any
effective and outstanding notice or order issued under
this subsection.</DELETED>
<DELETED> (D) Temporary cease-and-desist
proceedings.--If the primary Federal payment stablecoin
regulator determines that a violation or attempted
violation of this Act or an action with respect to
which a determination was made under paragraph (1),
(2), or (3), or the continuation thereof, is likely to
cause insolvency or significant dissipation of assets
or earnings of a permitted payment stablecoin issuer,
or is likely to weaken the condition of the permitted
payment stablecoin issuer or otherwise prejudice the
interests of the customers of the permitted payment
stablecoin issuer prior to the completion of the
proceedings conducted under this paragraph, the primary
Federal payment stablecoin regulator may follow the
procedures provided in section 8(c) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(c)) to issue a
temporary cease-and-desist order.</DELETED>
<DELETED> (5) Civil money penalties.--</DELETED>
<DELETED> (A) Failure to be approved.--Any person
who issues a United States dollar-denominated payment
stablecoin in violation of section 3, and any
institution-affiliated party of such a person who
knowingly participates in issuing such a payment
stablecoin, shall be liable for a civil penalty of not
more than $100,000 for each day during which such
payment stablecoins are issued.</DELETED>
<DELETED> (B) First tier.--Except as provided in
subparagraph (A), a permitted payment stablecoin issuer
or institution-affiliated party of such permitted
payment stablecoin issuer that materially violates this
Act or any regulation or order issued under this Act,
or that materially violates any condition imposed in
writing by the primary Federal payment stablecoin
regulator in connection with a written agreement
entered into between the permitted payment stablecoin
issuer and the primary Federal payment stablecoin
regulator, shall be liable for a civil penalty of up to
$100,000 for each day during which the violation
continues.</DELETED>
<DELETED> (C) Second tier.--Except as provided in
subparagraph (A), and in addition to the penalties
described under subparagraph (B), a permitted payment
stablecoin issuer or institution-affiliated party of
such permitted payment stablecoin issuer who knowingly
participates in a violation of any provision of this
Act, or any regulation or order issued thereunder, is
liable for a civil penalty of up to an additional
$100,000 for each day during which the violation
continues.</DELETED>
<DELETED> (D) Procedure.--Any penalty imposed under
this paragraph may be assessed and collected by the
primary Federal payment stablecoin regulator pursuant
to the procedures set forth in section 8(i)(2) of the
Federal Deposit Insurance Act (12 U.S.C.
1818(i)(2)).</DELETED>
<DELETED> (E) Notice and orders after separation
from service.--The resignation, termination of
employment or participation, or separation of an
institution-affiliated party (including a separation
caused by the closing of a permitted payment stablecoin
issuer) shall not affect the jurisdiction and authority
of the primary Federal payment stablecoin regulator to
issue any notice or order and proceed under this
subsection against any such party, if such notice or
order is served before the end of the 6-year period
beginning on the date such party ceased to be an
institution-affiliated party with respect to such
permitted payment stablecoin issuer.</DELETED>
<DELETED> (6) Non-applicability to a state qualified payment
stablecoin issuer.--Notwithstanding anything in this subsection
to the contrary, this subsection shall not apply to a State
qualified payment stablecoin issuer.</DELETED>
<DELETED>SEC. 7. STATE QUALIFIED PAYMENT STABLECOIN ISSUERS.</DELETED>
<DELETED> (a) In General.--A State payment stablecoin regulator
shall have supervisory, examination, and enforcement authority over all
State qualified payment stablecoin issuers of such State.</DELETED>
<DELETED> (b) Authority To Enter Into Agreements With the Board.--A
State payment stablecoin regulator may enter into a memorandum of
understanding with the Board, by mutual agreement, under which the
Board may participate in the supervision, examination, and enforcement
of this Act with respect to the State qualified payment stablecoin
issuers of such State.</DELETED>
<DELETED> (c) Sharing of Information.--A State payment stablecoin
regulator and the Board shall share information on an ongoing basis
with respect to a State qualified payment stablecoin issuer of such
State, including a copy of the initial application and any accompanying
documents.</DELETED>
<DELETED> (d) Rulemaking.--A State payment stablecoin regulator may
issue orders and rules under section 4 applicable to State qualified
payment stablecoin issuers to the same extent as the primary Federal
payment stablecoin regulators issue orders and rules under section 4
applicable to permitted payment stablecoin issuers that are not a State
qualified payment stablecoin issuers.</DELETED>
<DELETED> (e) Enforcement Authority in Unusual and Exigent
Circumstances.--</DELETED>
<DELETED> (1) Board.--</DELETED>
<DELETED> (A) In general.--Subject to subparagraph
(C), under unusual and exigent circumstances that the
Board determines to exist, the Board may, after not
less than 48 hours prior written notice to the
applicable State payment stablecoin regulator, take an
enforcement action against a State qualified payment
stablecoin issuer or an institution-affiliated party of
such issuer for violations of this Act during such
unusual and exigent circumstances.</DELETED>
<DELETED> (B) Rulemaking.--Consistent with section
18, the Board shall issue rules to set forth the
unusual and exigent circumstances in which the Board
may act under this paragraph.</DELETED>
<DELETED> (C) Limitations.--If, after unusual and
exigent circumstances are determined to exist pursuant
to subparagraph (A), the Board determines that there is
reasonable cause to believe that the continuation by a
State qualified payment stablecoin issuer of any
activity constitutes a serious risk to the financial
safety, soundness, or stability of the State qualified
payment stablecoin issuer, the Board may impose such
restrictions as the Board determines to be necessary to
address such risk during such usual and exigent
circumstances. Such restrictions shall be issued in the
form of a directive, with the effect of a cease and
desist order that has become final, to the State
qualified payment stablecoin issuer and any of its
affiliates, limiting--</DELETED>
<DELETED> (i) the payment of dividends by
the State qualified payment stablecoin
issuer;</DELETED>
<DELETED> (ii) transactions between the
State qualified payment stablecoin issuer, a
holding company, and the subsidiaries or
affiliates of either the State qualified
payment stablecoin issuer or the holding
company; and</DELETED>
<DELETED> (iii) any activities of the State
qualified payment stablecoin issuer that might
create a serious risk that the liabilities of a
holding company and the affiliates of the
holding company may be imposed on the State
qualified payment stablecoin issuer.</DELETED>
<DELETED> (D) Review of directive.--</DELETED>
<DELETED> (i) Administrative review.--
</DELETED>
<DELETED> (I) In general.--After a
directive described in subparagraph (C)
is issued, the State qualified payment
stablecoin issuer, or any institution-
affiliated party of the State qualified
payment stablecoin issuer subject to
the directive, may object and present
to the Board, in writing, the reasons
why the directive should be modified or
rescinded.</DELETED>
<DELETED> (II) Automatic lapse of
directive.--If, after 10 days after the
receipt of a response described in
subclause (I), the Board does not
affirm, modify, or rescind the
directive, the directive shall
automatically lapse.</DELETED>
<DELETED> (ii) Judicial review.--</DELETED>
<DELETED> (I) In general.--If the
Board affirms or modifies a directive
pursuant to clause (i), any affected
party may immediately thereafter
petition the United States district
court for the district in which the
main office of the affected party is
located or in the United States
District Court for the District of
Columbia to stay, modify, terminate, or
set aside the directive.</DELETED>
<DELETED> (II) Relief for
extraordinary cause.--Upon a showing of
extraordinary cause, an affected party
may petition for relief under subclause
(I) without first pursuing or
exhausting the administrative remedies
under clause (i).</DELETED>
<DELETED> (2) Comptroller.--</DELETED>
<DELETED> (A) In general.--Subject to subparagraph
(C), under unusual and exigent circumstances determined
to exist by the Comptroller, the Comptroller shall,
after not less than 48 hours prior written notice to
the applicable State payment stablecoin regulator, take
an enforcement action against a State qualified payment
stablecoin issuer that is a nonbank entity for
violations of this Act.</DELETED>
<DELETED> (B) Rulemaking.--Consistent with section
18, the Comptroller shall issue rules to set forth the
unusual and exigent circumstances in which the
Comptroller may act under this paragraph.</DELETED>
<DELETED> (C) Limitations.--If, after unusual and
exigent circumstances are determined to exist under
subparagraph (A), the Comptroller determines that there
is reasonable cause to believe that the continuation by
a State qualified payment stablecoin issuer that is a
nonbank entity of any activity constitutes a serious
risk to the financial safety, soundness, or stability
of the State qualified payment stablecoin issuer that
is a nonbank entity, the Comptroller shall impose such
restrictions as the Comptroller determines to be
necessary to address such risk during such unusual and
exigent circumstances. Such restrictions shall be
issued in the form of a directive, with the effect of a
cease and desist order that has become final, to the
State qualified payment stablecoin issuer that is a
nonbank entity and any of its affiliates, limiting--
</DELETED>
<DELETED> (i) the payment of dividends by
the State qualified payment stablecoin
issuer;</DELETED>
<DELETED> (ii) transactions between the
State qualified payment stablecoin issuer, a
holding company, and the subsidiaries or
affiliates of either the State qualified
payment stablecoin issuer or the holding
company; and</DELETED>
<DELETED> (iii) any activities of the State
qualified payment stablecoin issuer that might
create a serious risk that the liabilities of a
holding company and the affiliates of the
holding company may be imposed on the State
qualified payment stablecoin issuer.</DELETED>
<DELETED> (D) Review of directive.--</DELETED>
<DELETED> (i) Administrative review.--
</DELETED>
<DELETED> (I) In general.--After a
directive described in subparagraph (C)
is issued, the Comptroller-regulated
entity, or any institution-affiliated
party of the Comptroller-regulated
entity subject to the directive, may
object and present to the Comptroller,
in writing, the reasons why the
directive should be modified or
rescinded.</DELETED>
<DELETED> (II) Automatic lapse of
directive.--If, after 10 days after the
receipt of a response described in
subclause (I), the Comptroller does not
affirm, modify, or rescind the
directive, the directive shall
automatically lapse.</DELETED>
<DELETED> (ii) Judicial review.--</DELETED>
<DELETED> (I) In general.--If the
Comptroller affirms or modifies a
directive pursuant to clause (i), any
affected party may immediately
thereafter petition the United States
district court for the district in
which the main office of the affected
party is located or in the United
States District Court for the District
of Columbia to stay, modify, terminate,
or set aside the directive.</DELETED>
<DELETED> (II) Relief for
extraordinary cause.--Upon a showing of
extraordinary cause, an affected party
may petition for relief under subclause
(I) without first pursuing or
exhausting the administrative remedies
under clause (i).</DELETED>
<DELETED> (f) Effect on State Law.--</DELETED>
<DELETED> (1) Host state law.--The laws of a host State,
including generally applicable laws relating to consumer
protection, shall only apply to the activities conducted in the
host State by an out-of-State State qualified payment
stablecoin issuer to the same extent as such laws apply to the
activities conducted in the host State by an out-of-State
Federal qualified nonbank payment stablecoin issuer.</DELETED>
<DELETED> (2) Home state law.--If any host State law is
determined not to apply under paragraph (1), the laws of the
home State of the State qualified payment stablecoin issuer
shall govern the activities of the permitted payment stablecoin
issuer conducted in the host State.</DELETED>
<DELETED> (3) Applicability.--The laws applicable under
paragraph (1) exclude host State laws governing the chartering,
licensure, or other authorization to do business in the host
State as a permitted payment stablecoin issuer pursuant to this
Act.</DELETED>
<DELETED>SEC. 8. ANTI-MONEY LAUNDERING PROTECTIONS.</DELETED>
<DELETED> (a) Definitions.--In this subsection:</DELETED>
<DELETED> (1) Digital asset service provider.--The term
``digital asset service provider''--</DELETED>
<DELETED> (A) means a person that, for compensation
or profit, engages in the business in the United States
or for customers or users in the United States, of--
</DELETED>
<DELETED> (i) exchanging digital assets for
monetary value;</DELETED>
<DELETED> (ii) exchanging digital assets for
other digital assets;</DELETED>
<DELETED> (iii) transferring digital assets
to a third party;</DELETED>
<DELETED> (iv) acting as a digital asset
custodian; or</DELETED>
<DELETED> (v) participating in financial
services related to a digital asset issuance;
and</DELETED>
<DELETED> (B) does not include--</DELETED>
<DELETED> (i) a distributed ledger protocol
or a person solely developing such a protocol;
or</DELETED>
<DELETED> (ii) a person solely validating
transactions or operating a distributed ledger
node.</DELETED>
<DELETED> (2) Offering.--The term ``offering'' means making
available for purchase, sale, or exchange.</DELETED>
<DELETED> (3) Distributed ledger protocol.--The term
``distributed ledger protocol'' means publicly available and
accessible executable software deployed to a distributed
ledger, including smart contracts or networks of smart
contracts.</DELETED>
<DELETED> (4) Lawful order.--The term ``lawful order'' means
any final and valid writ, process, order, rule, decree,
command, or other requirement issued or promulgated under
Federal law, issued by a court of competent jurisdiction or by
an authorized Federal agency pursuant to its statutory
authority, that--</DELETED>
<DELETED> (A) requires a permitted payment
stablecoin issuer to seize, freeze, burn, or prevent
the transfer of payment stablecoins issued by the
permitted payment stablecoin issuer;</DELETED>
<DELETED> (B) specifies the digital assets or
accounts subject to blocking with reasonable
particularity; and</DELETED>
<DELETED> (C) is subject to judicial or
administrative review or appeal as provided by
law.</DELETED>
<DELETED> (b) Treasury Authority to Designate Noncompliant
Issuers.--Not later than 30 days after the Department of the Treasury
has identified the failure of a foreign issuer of any payment
stablecoins trading in the United States that is not a permitted
payment stablecoin issuer to comply with the terms of any lawful order,
the Secretary of the Treasury, in coordination with relevant Federal
agencies, shall designate the foreign issuer as noncompliant and notify
the foreign issuer in writing of the designation.</DELETED>
<DELETED> (c) Publication of Designation; Prohibition on Secondary
Trading.--</DELETED>
<DELETED> (1) In general.--If a foreign issuer described in
subsection (b) does not come into compliance with the lawful
order within 30 days of receiving the written notice described
in that subsection, the Secretary of the Treasury shall--
</DELETED>
<DELETED> (A) publish the determination of
noncompliance in the Federal Register, including a
statement on the failure of the foreign issuer to
comply with the lawful order after the written notice;
and</DELETED>
<DELETED> (B) issue a notification in the Federal
Register prohibiting digital asset service providers
from facilitating secondary trading of payment
stablecoins issued by the foreign issuer in the United
States.</DELETED>
<DELETED> (2) Effective date of prohibition.--The
prohibition on facilitation of secondary trading described in
paragraph (1) shall become effective on the date that is 30
days after the date of issue of notification of the prohibition
in the Federal Register.</DELETED>
<DELETED> (3) Waivers and extensions.--With respect to the
prohibition on facilitation of secondary trading described in
paragraph (1), the Secretary of the Treasury may issue waivers
and time extensions to digital asset service providers on a
case by case basis.</DELETED>
<DELETED> (4) Civil monetary penalties.--</DELETED>
<DELETED> (A) Digital asset service providers.--Any
digital asset service provider that knowingly violates
a prohibition under paragraph (1)(B) shall be subject
to a civil monetary penalty of not more than $100,000
per violation per day.</DELETED>
<DELETED> (B) Foreign payment stablecoin issuers.--
Any foreign issuer of payment stablecoin that knowingly
continues to publicly offer a payment stablecoin in the
United States after publication of the determination of
noncompliance under paragraph (1)(A) shall be subject
to a civil monetary penalty of not more than $1,000,000
per violation per day, and the Secretary of the
Treasury may seek an injunction in a United States
District Court to bar the foreign issuer from engaging
in financial transactions in the United States or with
United States persons.</DELETED>
<DELETED> (d) Appeal.--A determination of noncompliance under
subsection (b) is subject to judicial review in the United States Court
of Appeals for the District of Columbia Circuit.</DELETED>
<DELETED> (e) Waiver, Licensing Authority, and Exceptions.--
</DELETED>
<DELETED> (1) In general.--The Secretary of the Treasury may
offer a waiver, general license, or specific license to any
United States persons engaging in secondary trading described
in subsection (c) on a case by case basis if the Secretary
determines that--</DELETED>
<DELETED> (A) prohibiting secondary trading would
adversely affect the financial system of the United
States; or</DELETED>
<DELETED> (B) the foreign issuer of the payment
stablecoin is taking tangible steps to remedy the
failure to comply with the lawful order that resulted
in the noncompliance determination under subsection
(b).</DELETED>
<DELETED> (2) National security waiver.--The President may
waive the application of the secondary trading restrictions
under subsection (c) if the President determines that the
waiver is in the national security interest of the United
States.</DELETED>
<DELETED> (3) Exceptions for intelligence and law
enforcement activities.--This Act shall not apply with respect
to--</DELETED>
<DELETED> (A) activities subject to the reporting
requirements under title V of the National Security Act
of 1947 (50 U.S.C. 3091 et seq.) or any authorized
intelligence activities of the United States;
or</DELETED>
<DELETED> (B) activities necessary to carry out or
assist law enforcement activity of the United
States.</DELETED>
<DELETED> (4) Report required.--Not later than 7 days after
issuing a waiver or a license under paragraph (1), the
Secretary of the Treasury shall submit a report to the Chairmen
and Ranking members of the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives, including the text of
the waiver or license, as well as the facts and circumstances
justifying the waiver determination, and provide a briefing on
the report.</DELETED>
<DELETED>SEC. 9. CUSTODY OF PAYMENT STABLECOIN RESERVE AND
COLLATERAL.</DELETED>
<DELETED> (a) In General.--A person may only engage in the business
of providing custodial or safekeeping services for the payment
stablecoin reserve, the payment stablecoins used as collateral, or the
private keys of permitted payment stablecoins if the person--</DELETED>
<DELETED> (1) is subject to--</DELETED>
<DELETED> (A) supervision or regulation by a primary
Federal payment stablecoin regulator or a primary
financial regulatory agency described under
subparagraph (B) or (C) of section 2(12) of the Dodd-
Frank Wall Street Reform and Consumer Protection Act
(12 U.S.C. 5301(12)); or</DELETED>
<DELETED> (B) supervision by a State bank
supervisor, as defined under section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813) or a State
credit union supervisor, as defined under section 6003
of the Anti-Money Laundering Act of 2020, and such
state bank supervisor or state credit union supervisor
makes available to the Board such information as the
Board determines necessary and relevant to the
categories of information under subsection (d);
and</DELETED>
<DELETED> (2) complies with the requirements under
subsection (b), unless such person complies with similar
requirements as required by a primary Federal payment
stablecoin regulator, the Securities and Exchange Commission,
or the Commodity Futures Trading Commission.</DELETED>
<DELETED> (b) Customer Property Requirement.--A person described in
subsection (a) shall--</DELETED>
<DELETED> (1) treat and deal with the payment stablecoins,
private keys, cash, and other property of a person for whom or
on whose behalf the person receives, acquires, or holds payment
stablecoins, private keys, cash, and other property
(hereinafter in this section referred to as the ``customer'')
as belonging to such customer and is not the property of such
person; and</DELETED>
<DELETED> (2) take such steps as are appropriate to protect
the payment stablecoins, private keys, cash, and other property
of a customer from the claims of creditors of the
person.</DELETED>
<DELETED> (c) Commingling Prohibited.--</DELETED>
<DELETED> (1) In general.--Payment stablecoins, cash, and
other property of a customer shall be separately accounted for
by a person described in subsection (a) and shall be segregated
from and not be commingled with the funds of the
person.</DELETED>
<DELETED> (2) Exception.--Notwithstanding paragraph (1)--
</DELETED>
<DELETED> (A) the payment stablecoins, cash, and
other property of a customer may, for convenience, be
commingled and deposited in an omnibus account holding
the payment stablecoins, cash, and other property of
more than 1 customer at a State chartered depository
institution, an insured depository institution,
national bank, or trust company;</DELETED>
<DELETED> (B) such share of the payment stablecoins,
cash, and other property of the customer that shall be
necessary to transfer, adjust, or settle a transaction
or transfer of assets may be withdrawn and applied to
such purposes, including the payment of commissions,
taxes, storage, and other charges lawfully accruing in
connection with the provision of services by a person
described in subsection (a); or</DELETED>
<DELETED> (C) in accordance with such terms and
conditions as a primary Federal payment stablecoin
regulator may prescribe by rule, regulation, or order,
any customer payment stablecoin, cash, and other
property described in this subsection may be commingled
and deposited in customer accounts with payment
stablecoins, cash, and other property received by the
person and required by the primary Federal payment
stablecoin regulator to be separately accounted for,
treated, and dealt with as belonging to
customers.</DELETED>
<DELETED> (d) Regulatory Information.--A person described under
subsection (a) shall submit to the applicable primary Federal payment
stablecoin regulator information concerning the person's business
operations and processes to protect customer assets, in such form and
manner as the primary regulator shall determine.</DELETED>
<DELETED> (e) Exclusion.--The requirements of this section shall not
apply to any person solely on the basis that such person engages in the
business of providing hardware or software to facilitate a customer's
own custody or safekeeping of the customer's payment stablecoins or
private keys.</DELETED>
<DELETED>SEC. 10. TREATMENT OF PAYMENT STABLECOIN ISSUERS IN INSOLVENCY
PROCEEDINGS.</DELETED>
<DELETED> (a) In General.--In any insolvency proceeding of a
permitted payment stablecoin issuer under Federal or State law,
including any proceeding under title 11, United States Code, and any
insolvency proceeding administered by a State payment stablecoin
regulator with respect to a permitted payment stablecoin issuer, the
claim of a person holding payment stablecoins issued by the permitted
payment stablecoin issuer shall have priority over the claims of the
permitted payment stablecoin issuer and any other creditor of the
permitted payment stablecoin issuer, with respect to required payment
stablecoin reserves, subject to section 507(e) of title 11, United
States Code.</DELETED>
<DELETED> (b) Definitions.--Section 101 of title 11, United States
Code, is amended by adding after paragraph (40B) the
following:</DELETED>
<DELETED> ``(40C) The terms `payment stablecoin' and
`permitted payment stablecoin issuer' have the meanings given
those terms in section 2 of the Guiding and Establishing
National Innovation for U.S. Stablecoins Act of
2025.''.</DELETED>
<DELETED> (c) Automatic Stay.--Section 362 of title 11, United
States Code is amended--</DELETED>
<DELETED> (1) in subsection (a)--</DELETED>
<DELETED> (A) in paragraph (7), by striking
``and'';</DELETED>
<DELETED> (B) in paragraph (8), by striking the
period and inserting ``; and''; and</DELETED>
<DELETED> (C) by adding at the end the
following:</DELETED>
<DELETED> ``(9) the redemption of payment stablecoins issued
by the debtor, from payment stablecoin reserves required to be
maintained under section 4 of the Guiding and Establishing
National Innovation for U.S. Stablecoins Act of 2025.'';
and</DELETED>
<DELETED> (2) in subsection (d)--</DELETED>
<DELETED> (A) in paragraph (3)(B)(ii), by striking
``or'' at the end;</DELETED>
<DELETED> (B) in paragraph (4)(B), by striking the
period at the end and inserting ``; or''; and</DELETED>
<DELETED> (C) by inserting after paragraph (4) the
following:</DELETED>
<DELETED> ``(5) with respect to the redemption of payment
stablecoins held by a person, if the court finds, subject to
the motion and attestation of the debtor on the petition date,
there are payment stablecoin reserves available for
distribution on a ratable basis to similarly situated payment
stablecoin holders, provided that the court shall use best
efforts to enter a final order to begin distributions under
this paragraph not later than 14 days after the date of the
required hearing.''.</DELETED>
<DELETED> (d) Priority in Bankruptcy Proceedings.--Section 507 of
title 11, United States Code, is amended--</DELETED>
<DELETED> (1) in subsection (a), by striking ``The
following'' and inserting ``Subject to subsection (e), the
following''; and</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(e) Notwithstanding subsection (a), if a payment
stablecoin holder is not able to redeem all outstanding payment
stablecoin claims from required payment stablecoin reserves maintained
by the debtor, any remaining claim of a person holding a payment
stablecoin issued by the debtor shall have first priority over any
other claim, including over any expenses and claims that have priority
under that subsection, to the extent compliance with section 4 of the
Guiding and Establishing National Innovation for U.S. Stablecoins Act
of 2025 would have required additional reserves to be maintained by the
debtor for payment stablecoin holders.''.</DELETED>
<DELETED> (e) Payment Stablecoin Reserves.--Section 541(b) of title
11, United States Code, is amended--</DELETED>
<DELETED> (1) in paragraph (9), in the flush text following
subparagraph (B), by striking ``or'' at the end;</DELETED>
<DELETED> (2) in paragraph (10)(C), by striking the period
and inserting ``; or''; and</DELETED>
<DELETED> (3) by inserting after paragraph (10) the
following:</DELETED>
<DELETED> ``(11) required payment stablecoin reserves under
section 4 of the Guiding and Establishing National Innovation
for U.S. Stablecoins Act of 2025.''.</DELETED>
<DELETED> (f) Intervention.--Section 1109 of title 11, United States
Code, is amended by adding at the end the following:</DELETED>
<DELETED> ``(c) The Comptroller of the Currency or State payment
stablecoin regulator (as defined in section 2 of the Guiding and
Establishing National Innovation for U.S. Stablecoins Act of 2025)
shall raise and shall appear and be heard on any issue, including the
protection of customers, in a case under this chapter in which the
debtor is a permitted payment stablecoin issuer.''.</DELETED>
<DELETED> (g) Application of Existing Insolvency Law.--In accordance
with otherwise applicable law, an insolvency proceeding with respect to
a permitted payment stablecoin issuer shall occur as follows:</DELETED>
<DELETED> (1) A depository institution (as defined in
section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813)) shall be resolved by the Federal Deposit Insurance
Corporation, National Credit Union Administration, or State
payment stablecoin regulator, as applicable.</DELETED>
<DELETED> (2) A subsidiary of a depository institution (as
defined in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813)) or a nonbank entity may be considered a debtor
under title 11, United States Code.</DELETED>
<DELETED>SEC. 11. INTEROPERABILITY STANDARDS.</DELETED>
<DELETED> The primary Federal payment stablecoin regulators, in
consultation with the National Institute of Standards and Technology,
other relevant standard setting organizations, and State bank and
credit union regulators, shall assess and, if necessary, may, pursuant
to section 553 of title 5 and in a manner consistent with the National
Technology Transfer and Advancement Act of 1995 (Public Law 104-113),
prescribe standards for permitted payment stablecoin issuers to promote
compatibility and interoperability with--</DELETED>
<DELETED> (1) other permitted payment stablecoin issuers;
and</DELETED>
<DELETED> (2) the broader digital finance ecosystem,
including accepted communications protocols and blockchains,
permissioned or public.</DELETED>
<DELETED>SEC. 12. STUDY ON NON-PAYMENT STABLECOINS.</DELETED>
<DELETED> (a) Study by Treasury.--</DELETED>
<DELETED> (1) Study.--The Secretary of the Treasury, in
consultation with the Board, the Comptroller, the Corporation,
the Securities and Exchange Commission, and the Commodity
Futures Trading Commission shall carry out a study of non-
payment stablecoins, including endogenously collateralized
payment stablecoins.</DELETED>
<DELETED> (2) Report.--Not later than 365 days after the
date of the enactment of this Act, the Secretary shall provide
to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate a report that contains all findings
made in carrying out the study under paragraph (1), including
an analysis of--</DELETED>
<DELETED> (A) the categories of non-payment
stablecoins, including the benefits and risks of
technological design features;</DELETED>
<DELETED> (B) the participants in non-payment
stablecoin arrangements;</DELETED>
<DELETED> (C) utilization and potential utilization
of non-payment stablecoins;</DELETED>
<DELETED> (D) nature of reserve
compositions;</DELETED>
<DELETED> (E) types of algorithms being
employed;</DELETED>
<DELETED> (F) governance structure, including
aspects of decentralization;</DELETED>
<DELETED> (G) nature of public promotion and
advertising; and</DELETED>
<DELETED> (H) clarity and availability of consumer
notices disclosures.</DELETED>
<DELETED> (b) Endogenously Collateralized Payment Stablecoin
Defined.--In this section, the term ``endogenously collateralized
payment stablecoin'' means any digital asset--</DELETED>
<DELETED> (1) in which its originator has represented will
be converted, redeemed, or repurchased for a fixed amount of
monetary value; and</DELETED>
<DELETED> (2) that relies solely on the value of another
digital asset created or maintained by the same originator to
maintain the fixed price.</DELETED>
<DELETED>SEC. 13. REPORTS.</DELETED>
<DELETED> (a) Annual Reporting Requirement.--Beginning on the date
that is 1 year after the date of enactment of this Act, and annually
thereafter, the primary Federal payment stablecoin regulators shall
submit to the Committee on Banking, Housing, and Urban Affairs of the
Senate, the Committee on Financial Services of the House of
Representatives, and the Director of the Office of Financial Research a
report on the status of the payment stablecoin industry, including--
</DELETED>
<DELETED> (1) an overview of trends in payment stablecoin
activities;</DELETED>
<DELETED> (2) a summary of the number of applications for
permitted payment stablecoin issuer under section 5, including
aggregate approvals and rejections of applications;
and</DELETED>
<DELETED> (3) a description of the potential financial
stability risks posed to the safety and soundness of the
broader financial system by payment stablecoin
activities.</DELETED>
<DELETED> (b) FSOC Report.--The Financial Stability Oversight
Council shall incorporate the findings in the report under subsection
(a) into the annual report of the Council required under section
112(a)(2)(N) of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (12 U.S.C. 5322).</DELETED>
<DELETED>SEC. 14. AUTHORITY OF BANKING INSTITUTIONS.</DELETED>
<DELETED> (a) Rule of Construction.--Nothing in this Act may be
construed to limit the authority of a depository institution, Federal
credit union, State credit union, national bank, or trust company to
engage in activities permissible pursuant to applicable State and
Federal law, including--</DELETED>
<DELETED> (1) accepting or receiving deposits and issuing
digital assets that represent deposits;</DELETED>
<DELETED> (2) utilizing a distributed ledger for the books
and records of the entity and to affect intrabank transfers;
and</DELETED>
<DELETED> (3) providing custodial services for payment
stablecoins, private keys of payment stablecoins, or reserves
backing payment stablecoins.</DELETED>
<DELETED> (b) Regulatory Review.--The primary Federal payment
stablecoin regulators shall review all existing guidance and
regulations, and if necessary, amend or promulgate new regulations and
guidance, to clarify that regulated entities can engage in the payment
stablecoin activities contemplated in, and in accordance with, this
Act.</DELETED>
<DELETED> (c) Treatment of Custody Activities.--The appropriate
Federal banking agency (as defined under section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813)), the National Credit Union
Administration (in the case of a credit union), and the Securities and
Exchange Commission may not require a depository institution, national
bank, Federal credit union, State credit union, or trust company, or
any institution-affiliated party thereof--</DELETED>
<DELETED> (1) to include assets held in custody that are not
owned by the entity as a liability on the financial statement
or balance sheet of the entity, including payment stablecoin
custody or safekeeping activities;</DELETED>
<DELETED> (2) to hold regulatory capital against assets,
including reserves backing such assets described in section
4(a)(1)(A), in custody or safekeeping, except as necessary to
mitigate against operational risks inherent with the custody or
safekeeping services, as determined by--</DELETED>
<DELETED> (A) the appropriate Federal banking
agency;</DELETED>
<DELETED> (B) the National Credit Union
Administration (in the case of a credit
union);</DELETED>
<DELETED> (C) a State bank supervisor (as defined
under section 3 of the Federal Deposit Insurance Act
(12 U.S.C. 1813)); or</DELETED>
<DELETED> (D) a State credit union supervisor (as
defined under section 6003 of the Anti-Money Laundering
Act of 2020);</DELETED>
<DELETED> (3) to recognize a liability for any obligations
related to activities or services performed for digital assets
that the entity does not own in any amount greater than the
expense recognized in the income statement or the consideration
received as a result of the corresponding obligation.</DELETED>
<DELETED> (d) Definitions.--In this section:</DELETED>
<DELETED> (1) Depository institution.--The term ``depository
institution'' has the meaning given that term under section 3
of the Federal Deposit Insurance Act (12 U.S.C.
1813).</DELETED>
<DELETED> (2) Credit union terms.--The terms ``Federal
credit union'' and ``State credit union'' have the meaning
given those terms, respectively, under section 101 of the
Federal Credit Union Act.</DELETED>
<DELETED>SEC. 15. AMENDMENTS TO CLARIFY THAT PAYMENT STABLECOINS ARE
NOT SECURITIES OR COMMODITIES AND PERMITTED PAYMENT
STABLECOIN ISSUERS ARE NOT INVESTMENT
COMPANIES.</DELETED>
<DELETED> (a) Investment Advisers Act of 1940.--Section 202(a)(18)
of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(18)) is
amended by adding at the end the following: ``The term `security' does
not include a payment stablecoin issued by a permitted payment
stablecoin issuer, as such terms are defined in section 2 of the
Guiding and Establishing National Innovation for U.S. Stablecoins Act
of 2025.''.</DELETED>
<DELETED> (b) Investment Company Act of 1940.--The Investment
Company Act of 1940 is amended--</DELETED>
<DELETED> (1) in section 2(a)(36) (15 U.S.C. 80a-
2(a)(36))(15 U.S.C. 80a-2(a)(36)), by adding at the end the
following: ``The term `security' does not include a payment
stablecoin issued by a permitted payment stablecoin issuer, as
such terms are defined in section 2 of the Guiding and
Establishing National Innovation for U.S. Stablecoins Act of
2025.''; and</DELETED>
<DELETED> (2) in section 3(c)(3) (15 U.S.C. 80a-3(c)(3)), by
inserting ``any permitted payment stablecoin issuer, as such
term is defined in section 2 of the Guiding and Establishing
National Innovation for U.S. Stablecoins Act of 2025;'' after
``therefor;''.</DELETED>
<DELETED> (c) Securities Act of 1933.--Section 2(a)(1) of the
Securities Act of 1933 (15 U.S.C. 77b(a)(1)) is amended by adding at
the end the following: ``The term `security' does not include a payment
stablecoin issued by a permitted payment stablecoin issuer, as such
terms are defined in section 2 of the Guiding and Establishing National
Innovation for U.S. Stablecoins Act of 2025.''.</DELETED>
<DELETED> (d) Securities Exchange Act of 1934.--Section 3(a)(10) of
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended
by adding at the end the following: ``The term `security' does not
include a payment stablecoin issued by a permitted payment stablecoin
issuer, as such terms are defined in section 2 of the Guiding and
Establishing National Innovation for U.S. Stablecoins Act of
2025.''.</DELETED>
<DELETED> (e) Securities Investor Protection Act of 1970.--Section
16(14) of the Securities Investor Protection Act of 1970 (15 U.S.C.
78lll(14)) is amended by adding at the end the following: ``The term
`security' does not include a payment stablecoin issued by a permitted
payment stablecoin issuer, as such terms are defined in section 2 of
the Guiding and Establishing National Innovation for U.S. Stablecoins
Act of 2025.''.</DELETED>
<DELETED> (f) Commodity Exchange Act.--Section 1a of the Commodity
Exchange Act (7 U.S.C. 1a) is amended by adding at the end the
following: ``The term `commodity' does not include a payment stablecoin
issued by a permitted payment stablecoin issuer, as such terms are
defined in section 2 of the Guiding and Establishing National
Innovation for U.S. payment stablecoins Act of 2025.''</DELETED>
<DELETED>SEC. 16. RECIPROCITY FOR PAYMENT STABLECOINS ISSUED IN
OVERSEAS JURISDICTIONS.</DELETED>
<DELETED> The Secretary of the Treasury shall create and implement
reciprocal arrangements or other bilateral agreements between the
United States and jurisdictions with substantially similar payment
stablecoin regulatory regimes to the requirements under this Act,
including reserve requirements, supervision, anti-money laundering and
counter-terrorism features, sanctions compliance standards, liquidity
requirements, and risk management standards, to facilitate
international transactions and interoperability with United States
dollar-denominated payment stablecoins issued overseas. The Secretary
of the Treasury shall aim to complete such arrangements not later than
the date that is 2 years after the date of enactment of this
Act.</DELETED>
<DELETED>SEC. 17. EFFECTIVE DATE.</DELETED>
<DELETED> (a) In General.--This Act, and the amendments made by this
Act, shall take effect on the earlier of--</DELETED>
<DELETED> (1) 18 months after the date of enactment of this
Act; or</DELETED>
<DELETED> (2) the date that is 120 days after the date on
which the primary Federal payment stablecoin regulators issue
any final regulations implementing this Act.</DELETED>
<DELETED> (b) Notice to Congress.--The primary Federal payment
stablecoin regulators shall notify Congress upon beginning to process
applications under this Act.</DELETED>
<DELETED> (c) Safe Harbor for Pending Applications.--The primary
Federal payment stablecoin regulators may waive the application of the
requirements of this Act for a period not to exceed 12 months beginning
on the effective date described under subsection (a), with respect to--
</DELETED>
<DELETED> (1) a subsidiary of an insured depository
institution, if the insured depository institution has an
application pending for the subsidiary to become a permitted
payment stablecoin issuer on that effective date; or</DELETED>
<DELETED> (2) a nonbank entity with an application pending
to become a Comptroller-regulated entity on that effective
date.</DELETED>
<DELETED>SEC. 18. RULEMAKING.</DELETED>
<DELETED> (a) In General.--Not later than 1 year after the date of
enactment of this Act, each primary Federal payment stablecoin
regulator, the Secretary of the Treasury, and each State payment
stablecoin regulator shall implement this Act through appropriate
notice and comment rulemaking, including promulgating regulations as
described in this Act as necessary.</DELETED>
<DELETED> (b) Coordination.--Federal payment stablecoin regulators
and State payment stablecoin regulators should coordinate on the
issuance of any regulations to implement this Act.</DELETED>
<DELETED> (c) Report Required.--Not later than 180 days after the
date of enactment of this Act, each Federal banking agency shall submit
to the Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of Representatives
a report that confirms and describes the rules promulgated to implement
this Act.</DELETED>
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Guiding and Establishing National
Innovation for U.S. Stablecoins Act of 2025'' or the ``GENIUS Act of
2025''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Bank secrecy act.--The term ``Bank Secrecy Act''
means--
(A) section 21 of the Federal Deposit Insurance Act
(12 U.S.C. 1829b);
(B) chapter 2 of title I of Public Law 91-508 (12
U.S.C. 1951 et seq.); and
(C) subchapter II of chapter 53 of title 31, United
States Code.
(2) Board.--The term ``Board'' means the Board of Governors
of the Federal Reserve System.
(3) Comptroller.--The term ``Comptroller'' means the Office
of the Comptroller of the Currency.
(4) Comptroller-regulated entity.--The term ``Comptroller-
regulated entity'' means--
(A) any Federal qualified nonbank payment
stablecoin issuer that is subject to regulation and
supervision exclusively by the Comptroller, pursuant to
section 4(a)(7); and
(B) any entity chartered by the Comptroller.
(5) Corporation.--The term ``Corporation'' means the
Federal Deposit Insurance Corporation.
(6) Digital asset.--The term ``digital asset'' means any
digital representation of value which is recorded on a
cryptographically-secured distributed ledger.
(7) Distributed ledger.--The term ``distributed ledger''
means technology in which data is shared across a network that
creates a public digital ledger of verified transactions or
information among network participants and cryptography is used
to link the data to maintain the integrity of the public ledger
and execute other functions.
(8) Federal qualified nonbank payment stablecoin issuer.--
The term ``Federal qualified nonbank payment stablecoin
issuer'' means a nonbank entity, other than a State qualified
payment stablecoin issuer, approved by the Comptroller,
pursuant to section 5, to issue payment stablecoins.
(9) Institution-affiliated party.--With respect to a
permitted payment stablecoin issuer, the term ``institution-
affiliated party'' means any director, officer, employee, or
controlling stockholder of the permitted payment stablecoin
issuer.
(10) Insured depository institution.--The term ``insured
depository institution'' means--
(A) an insured depository institution, as defined
in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813); and
(B) an insured credit union, as defined in section
101 of the Federal Credit Union Act (12 U.S.C. 1752).
(11) Monetary value.--The term ``monetary value'' means a
national currency or deposit (as defined in section 3 of the
Federal Deposit Insurance Act) denominated in a national
currency.
(12) Money.--The term ``money'' means any financial
instrument that is--
(A) legal tender;
(B) required to be received by a taxing authority
in satisfaction of tax obligations; or
(C) widely accepted in an economy for the payment
of goods or services.
(13) National currency.--The term ``national currency''
means each of the following:
(A) A Federal Reserve note (as the term is used in
the first undesignated paragraph of section 16 of the
Federal Reserve Act (12 U.S.C. 411)).
(B) Money standing to the credit of an account with
a Federal Reserve Bank.
(C) Money issued by a foreign central bank.
(D) Money issued by an intergovernmental
organization pursuant to an agreement by 1 or more
governments.
(14) Nonbank entity.--The term ``nonbank entity'' means a
person that is not a depository institution or subsidiary of a
depository institution.
(15) Payment stablecoin.--The term ``payment stablecoin''--
(A) means a digital asset--
(i) that is or is designed to be used as a
means of payment or settlement; and
(ii) the issuer of which--
(I) is obligated to convert,
redeem, or repurchase for a fixed
amount of monetary value, not including
a digital asset denominated in a fixed
amount of monetary value;
(II) represents that such issuer
will maintain or creates the reasonable
expectation that it will maintain a
stable value relative to the value of a
fixed amount of monetary value; or
(III) has complied with the
authorization requirements of this Act;
and
(B) that--
(i) is not a national currency;
(ii) is not a deposit (as defined in
section 3 of the Federal Deposit Insurance
Act), including a deposit recorded using
distributed ledger technology;
(iii) does not offer a payment of yield or
interest; and
(iv) is not a security, as defined in
section 2 of the Securities Act of 1933 (15
U.S.C. 77b), section 3 of the Securities
Exchange Act of 1934 (15 U.S.C. 78c), or
section 2 of the Investment Company Act of 1940
(15 U.S.C. 80a-2), other than a bond, note,
evidence of indebtedness, or investment
contract satisfying the conditions described in
subparagraph (A).
(16) Permitted payment stablecoin issuer.--The term
``permitted payment stablecoin issuer'' means a person
incorporated in the United States that is--
(A) a subsidiary of an insured depository
institution that has been approved to issue payment
stablecoins under section 5;
(B) a Federal qualified nonbank payment stablecoin
issuer that has been approved to issue payment
stablecoins under section 5; or
(C) a State qualified payment stablecoin issuer.
(17) Person.--The term ``person'' means an individual,
partnership, company, corporation, association, trust, estate,
cooperative organization, or other business entity,
incorporated or unincorporated.
(18) Primary federal payment stablecoin regulator.--The
term ``primary Federal payment stablecoin regulator'' means--
(A) with respect to a subsidiary of an insured
depository institution (other than an insured credit
union), the appropriate Federal banking agency (as
defined under section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813)) of such insured
depository institution;
(B) with respect to an insured credit union or a
subsidiary of an insured credit union, the National
Credit Union Administration;
(C) with respect to a State chartered depository
institution not specified under subparagraph (A), the
Corporation, the Comptroller, or the Board; and
(D) with respect to a Federal qualified nonbank
payment stablecoin issuer or any entity chartered by
the Comptroller, the Comptroller.
(19) Registered public accounting firm.--The term
``registered public accounting firm'' has the meaning given
that term under section 2 of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7201).
(20) State.--The term ``State'' means each of the several
States of the United States, the District of Columbia, and each
territory of the United States.
(21) State qualified payment stablecoin issuer.--The term
``State qualified payment stablecoin issuer'' means an entity
that is legally established under the laws of a State and
approved to issue payment stablecoins by a State payment
stablecoin regulator.
(22) State payment stablecoin regulator.--The term ``State
payment stablecoin regulator'' means a State agency that has
primary regulatory and supervisory authority in such State over
entities that issue payment stablecoins.
(23) State chartered depository institution.--The term
``State chartered depository institution'' has the meaning
given the term ``State depository institution'' in section 3(c)
of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)).
(24) Subsidiary of an insured credit union.--With respect
to an insured credit union, the term ``subsidiary of an insured
credit union'' means--
(A) an organization providing services to the
insured credit union that are associated with the
routine operations of credit unions, as described under
section 107(7)(I) of the Federal Credit Union Act (12
U.S.C. 1757(7)(I)); and
(B) a credit union service organization, as such
term is used under part 712 of title 12, Code of
Federal Regulations, with respect to which the insured
credit union has an ownership interest or to which the
insured credit union has extended a loan.
SEC. 3. ISSUANCE AND TREATMENT OF PAYMENT STABLECOINS.
(a) Issue.--It shall be unlawful for any person other than a
permitted payment stablecoin issuer to issue a payment stablecoin in
the United States.
(b) Treatment.--A payment stablecoin that is not issued by a
permitted payment stablecoin issuer shall not be--
(1) treated as cash or a cash equivalent for accounting
purposes;
(2) eligible as cash or a cash equivalent margin and
collateral for futures commission merchants, derivative
clearing organizations, broker-dealers, registered clearing
agencies, and swap dealers; or
(3) acceptable as a settlement asset to facilitate
wholesale payments between banking organizations or by a
payment infrastructure to facilitate exchange and settlement
among banking organizations.
(c) Penalty for Violation.--
(1) In general.--Whoever knowingly participates in a
violation of subsection (a) shall be fined not more than
$1,000,000 for each such violation, imprisoned for not more
than 5 years, or both.
(2) Referral to attorney general.--If a primary Federal
payment stablecoin regulator has reason to believe that any
person has knowingly violated subsection (a), the primary
Federal payment stablecoin regulator shall refer the matter to
the Attorney General.
SEC. 4. REQUIREMENTS FOR ISSUING PAYMENT STABLECOINS.
(a) Standards for the Issuance of Payment Stablecoins.--
(1) In general.--Permitted payment stablecoin issuers
shall--
(A) maintain reserves backing the outstanding
payment stablecoins of the permitted payment stablecoin
issuer on an at least 1 to 1 basis, with reserves
comprising--
(i) United States coins and currency
(including Federal reserve notes) or money
standing to the credit of an account with a
Federal Reserve Bank;
(ii) funds held as demand deposits (or
other deposits that may be withdrawn upon
request at any time) or insured shares at an
insured depository institution (including any
foreign branches and agencies of an insured
depository institution), subject to limitations
established by the Corporation and the National
Credit Union Administration, as applicable, to
address safety and soundness risks of such
insured depository institution;
(iii) Treasury bills, notes, or bonds--
(I) with a remaining maturity of 93
days or less; or
(II) issued with a maturity of 93
days or less;
(iv) repurchase agreements with the
permitted payment stablecoin issuer acting as a
seller of securities and with an overnight
maturity that are backed by Treasury bills with
a maturity of 93 days or less;
(v) reverse repurchase agreements with the
permitted payment stablecoin issuer acting as a
purchaser of securities and with an overnight
maturity that are collateralized by Treasury
notes, bills, or bonds on an overnight basis,
subject to overcollateralization in line with
standard market terms, that are--
(I) tri-party;
(II) centrally cleared through a
clearing house registered with the
Securities and Exchange Commission; or
(III) bilateral with a counterparty
that the issuer has determined to be
adequately creditworthy even in the
event of severe market stress;
(vi) securities issued by an investment
company registered under section 8(a) of the
Investment Company Act of 1940 (15 U.S.C. 80a-
8(a)) that operates as a money market fund in
compliance with rule 2a-7 issued under that Act
(or any successor rule) and that are invested
solely in underlying assets described in
clauses (i) through (v) of subparagraph (A);
(vii) any other similarly liquid federal
government issued asset approved by the primary
Federal payment stablecoin regulator, in
consultation with the State payment stablecoin
regulator, if applicable, of the permitted
payment stablecoin issuer; or
(viii) any reserve described in clauses (i)
through (vii) in tokenized form, provided that
such reserves comply with all applicable laws
and regulations;
(B) publicly disclose the issuer's redemption
policy;
(C) establish procedures for timely redemption of
outstanding payment stablecoins; and
(D) publish the monthly composition of the issuer's
reserves on the website of the issuer, containing--
(i) the total number of outstanding payment
stablecoins issued by the issuer; and
(ii) the amount and composition of the
reserves described under subparagraph (A).
(2) Prohibition on rehypothecation.--Reserves required
under paragraph (1)(A) may not be pledged, rehypothecated, or
reused by the permitted payment stablecoin issuer, either
directly or indirectly, except for the purpose of--
(A) satisfying margin obligations in connection
with investments in permitted reserves under clauses
(iv) and (v) of paragraph (1)(A);
(B) satisfying obligations associated with the use
or receipt of provision of standard custodial services;
or
(C) creating liquidity to meet reasonable
expectations of requests to redeem payment stablecoins,
such that reserves in the form of Treasury bills may be
sold as purchased securities for repurchase agreements
with a maturity of 93 days or less, provided that
either--
(i) the repurchase agreements are cleared
by a clearing agency registered with the
Securities and Exchange Commission; or
(ii) the permitted payment stablecoin
issuer receives the prior approval of its
primary Federal payment stablecoin regulator or
State payment stablecoin regulator, as
applicable.
(3) Monthly certification; examination of reports by
registered public accounting firm.--
(A) In general.--A permitted payment stablecoin
issuer shall, each month, have the information
disclosed in the previous month-end report required
under paragraph (1)(D) examined by a registered public
accounting firm.
(B) Certification.--Each month, the Chief Executive
Officer and Chief Financial Officer of a permitted
payment stablecoin issuer shall submit a certification
as to the accuracy of the monthly report to, as
applicable--
(i) the primary Federal payment stablecoin
regulator of the permitted payment stablecoin
issuer; or
(ii) the State payment stablecoin regulator
of the permitted payment stablecoin issuer.
(C) Criminal penalty.--Any person who submits a
certification required under subparagraph (B) knowing
that such certification is false shall be subject to
the criminal penalties set forth under section 1350(c)
of title 18, United States Code.
(4) Capital, liquidity, and risk management requirements.--
(A) In general.--The primary Federal payment
stablecoin regulators shall, jointly, or in the case of
a State qualified payment stablecoin issuer, the State
payment stablecoin regulator shall, consistent with
section 18, issue--
(i) capital requirements applicable to
permitted payment stablecoin issuers that--
(I) are tailored to the business
model and risk profile of permitted
payment stablecoin issuers;
(II) do not exceed requirements
which are sufficient to ensure the
ongoing operations of permitted payment
stablecoin issuers; and
(III) in the case of the primary
Federal payment stablecoin regulators,
if the primary Federal payment
stablecoin regulators determine that a
capital buffer is necessary to ensure
the ongoing operations of permitted
payment stablecoin issuers, may include
capital buffers that are tailored to
the business model and risk profile of
permitted payment stablecoin issuers;
(ii) regulations implementing the liquidity
standard under clause (i);
(iii) reserve asset diversification and
interest rate risk management standards
applicable to permitted payment stablecoin
issuers that--
(I) are tailored to the business
model and risk profile of permitted
payment stablecoin issuers; and
(II) do not exceed standards which
are sufficient to ensure the ongoing
operations of permitted payment
stablecoin issuers; and
(iv) appropriate operational, compliance,
and information technology risk management
standards, including Bank Secrecy Act and
sanctions compliance, that--
(I) are tailored to the business
model and risk profile of permitted
payment stablecoin issuers; and
(II) are consistent with applicable
law.
(B) Rule of construction.--Nothing in this
paragraph shall be construed to limit--
(i) the authority of the primary Federal
regulators, in prescribing standards under this
paragraph, to tailor or differentiate among
issuers on an individual basis or by category,
taking into consideration the capital
structure, business model risk profile,
complexity, financial activities (including
financial activities of subsidiaries), size,
and any other risk related factors of permitted
payment stablecoin issuers that the primary
Federal regulator determines appropriate,
provided that such tailoring or differentiation
occurs without respect to whether a permitted
payment stablecoin issuer is regulated by a
State payment stablecoin regulator; or
(ii) the supervisory, regulatory, or
enforcement authority of a Federal banking
agency to further the safe and sound operation
of an institution for which the Federal banking
agency is the appropriate Federal banking
agency (as defined under section 3 of the
Federal Deposit Insurance Act (12 U.S.C.
1813)).
(C) Applicability of existing capital standards.--
(i) Definitions.--In this subparagraph--
(I) ``appropriate Federal banking
agency'' has the meaning given that
term in section 3(q) of the Federal
Deposit Insurance Act (12 U.S.C.
1813(q); and
(II) ``depository institution
holding company'' has the meaning given
that term under section 171(a)(3) of
the Financial Stability Act of 2010 (12
U.S.C. 5371(a)(3)).
(ii) Applicability of financial stability
act.--With respect to the promulgation of rules
under subparagraph (A) and clauses (iii) and
(iv) of this subparagraph, section 171 of the
Financial Stability Act of 2010 (12 U.S.C.
5371) shall not apply.
(iii) Rules relating to leverage capital
requirements or risk-based capital
requirements.--Any rule issued by an
appropriate Federal banking agency that
imposes, on a consolidated basis, a leverage
capital requirement or risk-based capital
requirement with respect to an insured
depository institution or depository
institution holding company shall provide that,
for purposes of such leverage capital
requirement or risk-based capital requirement,
any insured depository institution or
depository institution holding company that
includes, on a consolidated basis, a permitted
payment stablecoin issuer shall not be required
to hold, with respect to such permitted payment
stablecoin issuer and its assets and
operations, any amount of regulatory capital in
excess of the capital that such permitted
payment stablecoin issuer must maintain under
the capital requirements promulgated pursuant
to paragraph (1)(A)(i).
(iv) Modifications.--Not later than the
earlier of the rulemaking deadline under
section 18 or the date the Federal payment
stablecoin regulators issue regulations to
carry out this section, each appropriate
Federal banking agency shall amend or otherwise
modify any regulation of the Federal banking
agency described in clause (iii) so that such
regulation, as amended or otherwise modified,
complies with clause (iii) of this
subparagraph.
(5) Treatment under the bank secrecy act and sanctions
laws.--
(A) In general.--A permitted payment stablecoin
issuer shall be treated as a financial institution for
purposes of the Bank Secrecy Act, and as such, shall be
subject to all Federal laws applicable to a financial
institution located in the United States relating to
economic sanctions, prevention of money laundering,
customer identification, and due diligence, including--
(i) maintenance of an effective anti-money
laundering and economic sanctions compliance
program, which shall include appropriate risk
assessments, verification of sanctions lists
and designation of an officer to supervise the
programs;
(ii) retention of appropriate records of
payment stablecoin transactions;
(iii) monitoring and reporting suspicious
activity;
(iv) policies and procedures to block,
freeze, and reject specific or impermissible
transactions that violate Federal or State
laws, rules, or regulations; and
(v) maintenance of an effective customer
identification program, including
identification and verification of account
holders with the permitted payment stablecoin
issuer, high value transactions and appropriate
enhanced due diligence.
(B) Rulemaking.--The Financial Crimes Enforcement
Network shall adopt rules, tailored to the size and
complexity of the permitted payment stablecoin issuer,
to implement subparagraph (A).
(6) Coordination with permitted payment stablecoin issuers
with respect to blocking of property and technological
capabilities to comply with lawful orders.--
(A) In general.--The Secretary of the Treasury--
(i) shall, to the best of the Secretary's
ability, coordinate with a permitted payment
stablecoin issuer before taking any action to
block and prohibit transactions in property and
interests in property of a foreign person to
ensure that the permitted payment stablecoin
issuer is able to effectively block a digital
asset of the foreign person upon issue of the
digital asset; and
(ii) is not required to notify any
permitted payment stablecoin issuer of any
intended action described in clause (i) prior
to taking such action.
(B) Compliance with lawful orders.--
(i) In general.--
(I) Permitted payment stablecoin
issuers.--A permitted payment
stablecoin issuer may issue payment
stablecoins only if the issuer has the
technological capability to comply and
will comply with the terms of any
lawful order.
(II) Foreign payment stablecoins.--
A foreign payment stablecoin that is
not licensed under this Act may not be
publicly offered, sold, or otherwise
made available for trading in the
United States unless the payment
stablecoin issuer has the technological
capability to comply and complies with
the terms of any lawful order.
(ii) Lawful order defined.--In this
paragraph, the term ``lawful order'' means any
final and valid writ, process, order, rule,
decree, command, or other requirement issued or
promulgated under Federal law, issued by a
court of competent jurisdiction or by an
authorized Federal agency pursuant to its
statutory authority, that--
(I) requires the permitted payment
stablecoin issuer to seize, freeze,
burn, or prevent the transfer of
payment stablecoins issued by the
permitted payment stablecoin issuer;
(II) specifies the digital assets
or accounts subject to blocking with
reasonable particularity; and
(III) is subject to judicial or
administrative review or appeal as
provided by law.
(C) Report required.--Not later than 1 year after
the date of enactment of this Act, the Secretary of the
Treasury shall submit to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives a report on the coordination with
permitted payment stablecoin issuers required under
subparagraph (A).
(7) Limitation on payment stablecoin activities.--
(A) In general.--A permitted payment stablecoin
issuer may only--
(i) issue payment stablecoins;
(ii) redeem payment stablecoins;
(iii) manage related reserves, including
purchasing, selling, and holding reserve assets
or providing custodial services for reserve
assets, consistent with State and Federal law;
(iv) provide custodial or safekeeping
services for payment stablecoins, required
reserves, or private keys of payment
stablecoins, consistent with this Act; and
(v) undertake other activities that
directly support any of the activities
described in clauses (i) through (iv).
(B) Rule of construction.--Nothing in subparagraph
(A) shall prevent a permitted payment stablecoin issuer
from engaging in non-payment stablecoin activities that
are allowed by the primary Federal payment stablecoin
regulator or the State payment stablecoin regulator, as
applicable.
(8) Prohibition on tying.--
(A) In general.--A permitted payment stablecoin
issuer may not provide services to a customer on the
condition that the customer obtain an additional paid
product or service from the permitted payment
stablecoin issuer, or any of its subsidiaries, or agree
to not obtain an additional product or service from a
competitor.
(B) Regulations.--The Board may issue such
regulations as are necessary to carry out this
subparagraph, and, in consultation with the Comptroller
and the Corporation, may by regulation or order, permit
such exceptions to clause (i) as the Board considers
will not be contrary to the purpose of this Act.
(9) Prohibition on the use of deceptive names.--A permitted
payment stablecoin issuer may not market a payment stablecoin
in such a way that a reasonable person would perceive the
payment stablecoin to be--
(A) legal tender, as described in section 5103 of
title 31, United States Code;
(B) issued by the United States; or
(C) guaranteed or approved by the Government of the
United States.
(10) Regulation by the comptroller.--
(A) In general.--A Federal qualified nonbank
payment stablecoin issuer shall be regulated and
supervised exclusively by the Comptroller, which shall
have authority, in coordination with other relevant
primary Federal payment stablecoin regulators and State
payment stablecoin regulators, to issue such
regulations and orders as necessary to ensure financial
stability and implement this subsection.
(B) Conforming amendment.--Section 324(b) of the
Revised Statutes (12 U.S.C. 1(b)) is amended by adding
at the end the following:
``(3) Regulation of federal qualified nonbank payment
stablecoin issuers.--The Comptroller of the Currency shall, in
coordination with other relevant regulators and consistent with
section 18 of the Guiding and Establishing National Innovation
for U.S. Stablecoins Act of 2025, issue such regulations and
orders as necessary to ensure financial stability and implement
section 4(a) of that Act.''.
(11) Audits and reports.--
(A) Annual financial statement.--
(i) In general.--A permitted payment
stablecoin issuer with more than
$50,000,000,000 in consolidated total
outstanding issuance, that is not subject to
the reporting requirements under sections 13(a)
or 15(d) of the Securities and Exchange Act of
1934 (15 U.S.C. 78m, 78o(d)), shall prepare, in
accordance with generally accepted accounting
principles, an annual financial statement,
which shall include the disclosure of any
related party transactions, as defined by such
generally accepted accounting principles.
(ii) Auditor.--A registered public
accounting firm shall perform an audit of the
annual financial statements described in clause
(i).
(iii) Standards.--An audit described in
clause (ii) shall be conducted in accordance
with all applicable auditing standards
established by the Public Company Accounting
Oversight Board, including those relating to
auditor independence, internal controls, and
related party transactions.
(iv) Rule of construction.--Nothing in this
subparagraph shall be construed to limit,
alter, or expand the jurisdiction of the Public
Company Accounting Oversight Board over
permitted payment stablecoin issuers or
registered public accounting firms.
(B) Public disclosure and submission to federal
regulators.--Each permitted payment stablecoin issuer
required to prepare an audited annual financial
statement under subparagraph (A) shall:
(i) make such audited financial statements
publicly available on the website of the
permitted payment stablecoin issuer; and
(ii) submit such audited financial
statements annually to their primary Federal
payment stablecoin regulator.
(C) Consultation.--The primary Federal payment
stablecoin regulators may consult with the Public
Company Accounting Oversight Board to determine best
practices for determining audit oversight and to detect
fraud, material misstatements, and other financial
misrepresentations that could mislead permitted payment
stablecoin holders.
(12) Eligibility.--The requirement to maintain reserves
under paragraph (1)(A) may not be construed as expanding or
contracting eligibility to qualify as a depository institution
under section 19(b)(1)(A) of the Federal Reserve Act (12 U.S.C.
461(b)(1)(A)).
(b) State-level Regulatory Regimes.--
(1) Option for state-level regulatory regime.--
Notwithstanding the Federal regulatory framework established
under subsection (a), a State qualified payment stablecoin
issuer with a consolidated total outstanding issuance of not
more than $10,000,000,000 may opt for regulation under a State-
level regulatory regime, provided that the State-level
regulatory regime is substantially similar to the Federal
regulatory framework under that subsection.
(2) Principles.--The Secretary of the Treasury shall,
through notice and comment rulemaking, establish broad based
principles for determining whether a State-level regulatory
regime is substantially similar to the Federal regulatory
framework under subsection (a).
(3) Review.--State payment stablecoin regulators shall
review State-level regulatory regimes according to the
principles established by the Secretary of the Treasury under
paragraph (2) and for the purposes of establishing any
necessary cooperative agreements to implement section 7(f).
(4) Certification.--
(A) Initial certification.--Subject to subparagraph
(B), not later than 1 year after the effective date of
this Act, a State payment stablecoin regulator shall
submit to the Secretary of the Treasury an initial
certification that the State-level regulatory regime
meets the criteria for substantial similarity
established pursuant to paragraph (2).
(B) Form of certification.--The initial
certification required under subparagraph (A) shall
contain, in a form prescribed by the Secretary of the
Treasury, an attestation that the State-level
regulatory regime meets the criteria for substantial
similarity established pursuant to paragraph (2).
(C) Annual recertification.--Not later than a date
to be determined by the Secretary each year, a State
payment stablecoin regulator shall submit to the
Secretary of the Treasury an additional certification
that confirms the accuracy of initial certification
submitted under subparagraph (A).
(5) Not substantially similar.--
(A) In general.--If a State payment stablecoin
regulator determines that the criteria established
under paragraph (2) are not met and the State payment
stablecoin regulator does not submit a certification
under paragraph (4), then a permitted payment
stablecoin issuer operating under this subsection shall
be subject to the Federal regulatory framework as
described in subsection (c), notwithstanding the total
issuance threshold therein.
(B) Treasury review.--Not later than 30 days after
the date of receipt of a certification under paragraph
(4), the Secretary may reject the certification if the
Secretary determines that the State-level regulatory
regime is not substantially similar to the Federal
regulatory framework under subsection (a), and the
permitted payment stablecoin issuer shall be subject to
the Federal regulatory framework as described in
subsection (c), notwithstanding the total issuance
threshold therein.
(C) Appellate review.--A State payment stablecoin
regulator may challenge the determination of the
Secretary of the Treasury under this paragraph in the
United States Court of Appeals for the District of
Columbia Circuit.
(6) List.--The Secretary of the Treasury shall publish and
maintain in the Federal Register and on the website of the
Department of the Treasury a list of States that have submitted
initial certifications and recertifications under paragraph
(4).
(c) Transition to Federal Oversight.--
(1) Depository institution.--A State chartered depository
institution that is a State qualified payment stablecoin issuer
with a payment stablecoin with a consolidated total outstanding
issuance of more than $10,000,000,000 shall--
(A) not later than 360 days after the payment
stablecoin reaches such threshold, transition to the
Federal regulatory framework of the primary Federal
payment stablecoin regulator of the State chartered
depository institution, which shall be administered by
the State payment stablecoin regulator of the State
chartered depository institution and the primary
Federal payment stablecoin regulator acting jointly; or
(B) beginning on the date the payment stablecoin
reaches such threshold, cease issuing new payment
stablecoins until the payment stablecoin is under the
$10,000,000,000 consolidated total outstanding issuance
threshold.
(2) Other institutions.--A State qualified payment
stablecoin issuer not described in paragraph (1) with a payment
stablecoin with a consolidated total outstanding issuance of
more than $10,000,000,000 shall--
(A) not later than 360 days after the payment
stablecoin reaches such threshold, transition to the
Federal regulatory framework under subsection (a)
administered by the State payment stablecoin regulator
of the State qualified payment stablecoin issuer; or
(B) beginning on the date the payment stablecoin
reaches such threshold, cease issuing new payment
stablecoins until the payment stablecoin is under the
$10,000,000,000 consolidated total outstanding issuance
threshold.
(3) Waiver.--
(A) In general.--Notwithstanding paragraphs (1) and
(2), the applicable primary Federal payment stablecoin
regulator may permit a State qualified payment
stablecoin issuer with a payment stablecoin with a
consolidated total outstanding issuance of more than
$10,000,000,000 to remain solely supervised by a State
payment stablecoin regulator.
(B) Criteria for waiver.--The primary Federal
payment stablecoin regulator shall consider the
following exclusive criteria in determining whether to
issue a waiver under this paragraph:
(i) The capital maintained by the State
qualified payment stablecoin issuer.
(ii) The past operations and examination
history of the State qualified payment
stablecoin issuer.
(iii) The experience of the State payment
stablecoin regulator in supervising payment
stablecoin and digital asset activities.
(iv) The laws and rules applicable to, and
the supervisory framework of, the State
qualified payment stablecoin issuer with
respect to payment stablecoins and digital
assets.
(C) Rule of construction.--A State qualified
payment stablecoin issuer subject to Federal oversight
under paragraph (1) or (2) of this subsection that does
not receive a waiver under this paragraph shall
continue to be supervised by the State payment
stablecoin regulator of the State qualified payment
stablecoin issuer along jointly with the primary
Federal payment stablecoin regulator. Nothing in this
subsection shall require the State qualified payment
stablecoin issuer to convert to a Federal charter.
(d) Misrepresentation of Insured Status; Marketing.--
(1) In general.--Payment stablecoins shall not be backed by
the full faith and credit of the United States, guaranteed by
the United States Government, subject to deposit insurance by
the Federal Deposit Insurance Corporation, or subject to share
insurance by the National Credit Union Administration.
(2) Misrepresentation of insured status.--
(A) In general.--It shall be unlawful to represent
that payment stablecoins are backed by the full faith
and credit of the United States, guaranteed by the
United States Government, or subject to Federal deposit
insurance or Federal share insurance.
(B) Penalty.--A violation of subparagraph (A) shall
be considered a violation of section 18(a)(4) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(a)(4)) or
section 709 of title 18, United States Code, as
applicable.
(3) Marketing.--It shall be unlawful to market a digital
asset in the United States as a payment stablecoin unless the
digital asset is issued pursuant to this Act.
(e) Officers or Directors Convicted of Certain Felonies.--
(1) In general.--No individual who has been convicted of a
felony offense involving insider trading, embezzlement,
cybercrime, money laundering, financing of terrorism, or
financial fraud may serve as--
(A) an officer of a payment stablecoin issuer; or
(B) a director of a payment stablecoin issuer.
(2) Penalty.--
(A) In general.--Whoever knowingly participates in
a violation of paragraph (1) or subsection (d)(3) shall
be fined not more than $1,000,000 for each such
violation, imprisoned for not more than 5 years; or
both.
(B) Referral to attorney general.--If a Federal
payment stablecoin regulator has reason to believe that
any person has knowingly violated paragraph (1) or
subsection (d)(3), the Federal payment stablecoin
regulator shall refer the matter to the Attorney
General.
(f) Rulemaking.--
(1) In general.--Consistent with section 18, the primary
Federal payment stablecoin regulators and State payment
stablecoin regulators shall issue such regulations as may be
necessary to establish a payment stablecoin regulatory
framework necessary to administer and carry out the
requirements of this section, including to establish
conditions, and to prevent evasions thereof.
(2) Joint issuance of regulation.--All regulations issued
to carry out this section shall be issued jointly by the
primary Federal payment stablecoin regulators, if not issued by
a State payment stablecoin regulator.
SEC. 5. APPROVAL OF SUBSIDIARIES OF INSURED DEPOSITORY INSTITUTIONS AND
FEDERAL QUALIFIED NONBANK PAYMENT STABLECOIN ISSUERS.
(a) Application.--
(1) In general.--Each primary Federal payment stablecoin
regulator shall receive, review, and consider for approval
applications from any insured depository institution that seeks
to issue payment stablecoins through a subsidiary and any
nonbank entity that seeks to issue payment stablecoins as a
Federal qualified nonbank payment stablecoin issuer. Each
primary Federal payment stablecoin regulator shall establish a
process and framework for the licensing, regulation,
examination, and supervision of such entities that prioritizes
the safety and soundness of such entities.
(2) Authority to issue regulations and process
applications.--The primary Federal payment stablecoin
regulators shall, before the date described in section 18--
(A) issue regulations consistent with that section
to carry out this section; and
(B) pursuant to the regulations described in
subparagraph (A), accept and process applications under
this Act.
(3) Mandatory approval process.--The primary Federal
payment stablecoin regulator shall, upon receipt of a
substantially complete application, evaluate and make a
determination on each application based on the criteria
established under this Act.
(b) Evaluation of Applications.--A substantially complete
application received under subsection (a) shall be evaluated by the
primary Federal payment stablecoin regulator using the factors
described in subsection (c).
(c) Factors to Be Considered.--The factors described in this
subsection are the following:
(1) The ability of the applicant (or, in the case of an
applicant that is an insured depository institution, the
subsidiary of the applicant), based on financial condition and
resources, to meet the requirements set forth under section 4.
(2) Whether an individual who has been convicted of a
felony offense involving insider trading, embezzlement,
cybercrime, money laundering, financing of terrorism, or
financial fraud is serving as an officer or director of the
applicant.
(3) Any other factors established by the primary Federal
payment stablecoin regulator that are necessary to ensure the
safety and soundness of the permitted payment stablecoin
issuer.
(4) The competence, experience, and integrity of the
officers, directors, and principal shareholders of the
applicant, its subsidiaries, and parent company, including--
(A) the record of those officers, directors, and
principal shareholders of compliance with laws and
regulations; and
(B) the ability of those officers, directors, and
principal shareholders to fulfill any commitments to,
and any conditions imposed by, their primary Federal
payment stablecoin regulator in connection with the
application at issue and any prior applications.
(d) Timing for Decision; Grounds for Denial.--
(1) Timing for decisions on applications.--
(A) In general.--Not later than 120 days after
receiving a substantially complete application under
subsection (a), a primary Federal payment stablecoin
regulator shall render a decision on the application.
(B) Substantially complete.--
(i) In general.--For purposes of
subparagraph (A), an application shall be
considered substantially complete if the
application contains sufficient information for
the primary Federal payment stablecoin
regulator to render a decision on whether the
applicant satisfies the criteria under
subsection (c).
(ii) Notification.--Not later than 30 days
after receiving an application under subsection
(a), a primary Federal payment stablecoin
regulator shall notify the applicant whether
the primary Federal payment stablecoin
regulator considers the application to be
substantially complete and, if the application
is not substantially complete, the additional
information the applicant must provide in order
for the application to be considered
substantially complete.
(iii) Material change in circumstances.--An
application considered substantially complete
under this subparagraph remains substantially
complete unless there is a material change in
circumstances that requires the primary Federal
payment stablecoin regulator to treat the
application as a new application.
(2) Denial of application.--
(A) Grounds for denial.--
(i) In general.--The primary Federal
payment stablecoin regulator shall only deny a
complete application received under subsection
(a) if the regulator determines that the
activities of the applicant would be unsafe or
unsound based on the factors described in
subsection (c).
(ii) Issuance not ground for denial.--The
issuance of a payment stablecoin on an open,
public, or decentralized network shall not be a
valid ground for denial of an application.
(B) Explanation required.--If the primary Federal
payment stablecoin regulator denies a complete
application received under subsection (a), not later
than 30 days after the date of such denial, the
regulator shall provide the applicant with written
notice explaining the denial with specificity,
including all findings made by the regulator with
respect to all identified material shortcomings in the
application, including actionable recommendations on
how the applicant could address the identified material
shortcomings.
(C) Opportunity for hearing; final determination.--
(i) In general.--Not later than 30 days
after the date of receipt of any notice of the
denial of an application under this section,
the applicant may request, in writing, an
opportunity for a written or oral hearing
before the primary Federal payment stablecoin
regulator to appeal the denial.
(ii) Timing.--Upon receipt of a timely
request, the primary Federal payment stablecoin
regulator shall notice a time (not later than
30 days after the date of receipt of the
request) and place at which the applicant may
appear, personally or through counsel, to
submit written materials or provide oral
testimony and oral argument).
(iii) Final determination.--Not later than
60 days after the date of a hearing under this
subparagraph, the primary Federal payment
stablecoin regulator shall notify the applicant
of a final determination, which shall contain a
statement of the basis for that determination,
with specific findings.
(iv) Notice if no hearing.--If an applicant
does not make a timely request for a hearing
under this subparagraph, the primary Federal
payment stablecoin regulator shall notify the
applicant, not later than 10 days after the
date by which the applicant may request a
hearing under this subparagraph, in writing,
that the denial of the application is a final
determination of the primary Federal payment
stablecoin regulator.
(3) Failure to render a decision.--If the primary Federal
payment stablecoin regulator fails to render a decision on a
complete application within the time period specified in
paragraph (1), the application shall be deemed approved.
(4) Right to reapply.--The denial of an application under
this section shall not prohibit the applicant from filing a
subsequent application.
(e) Report on Pending Applications.--The primary Federal payment
stablecoin regulators shall annually report to Congress on the
applications under subsection (a) that have been pending for 180 days
or more since the date the initial application was filed and for which
the applicant has been informed that the application remains
incomplete, including documentation on the status of such applications
and why such applications have not yet been approved.
(f) Rulemaking.--Consistent with section 18, the primary Federal
payment stablecoin regulators shall issue rules necessary for the
regulation of the issuance of payment stablecoins, but may not impose
requirements in addition to the requirements specified under section 4.
SEC. 6. SUPERVISION AND ENFORCEMENT WITH RESPECT TO SUBSIDIARIES OF
INSURED DEPOSITORY INSTITUTIONS AND COMPTROLLER-REGULATED
ENTITIES.
(a) Supervision.--
(1) In general.--Each permitted payment stablecoin issuer
that is not a State qualified payment stablecoin issuer with a
payment stablecoin with a consolidated total outstanding
issuance of less than $10,000,000,000 shall be subject to
supervision by the appropriate primary Federal payment
stablecoin regulator.
(2) Submission of reports.--Each permitted payment
stablecoin issuer described in paragraph (1) shall, upon
request, submit to its primary Federal payment stablecoin
regulator a report on--
(A) the financial condition of the permitted
payment stablecoin issuer;
(B) the systems of the permitted payment stablecoin
issuer for monitoring and controlling financial and
operating risks; and
(C) compliance by the permitted payment stablecoin
issuer (and any subsidiary thereof) with this Act.
(3) Examinations.--The primary Federal payment stablecoin
regulator shall examine a permitted payment stablecoin issuer
described in paragraph (1) in order to assess--
(A) the nature of the operations and financial
condition of the permitted payment stablecoin issuer;
(B) the financial, operational, technological, and
other risks within the permitted payment stablecoin
issuer that may pose a threat to--
(i) the safety and soundness of the
permitted payment stablecoin issuer; or
(ii) the stability of the financial system
of the United States; and
(C) the systems of the permitted payment stablecoin
issuer for monitoring and controlling the risks
described in subparagraph (B).
(4) Requirements for efficiency.--
(A) Use of existing reports.--In supervising and
examining a permitted payment stablecoin issuer under
this subsection, the primary Federal payment stablecoin
regulator shall, to the fullest extent possible, use
existing reports and other supervisory information.
(B) Avoidance of duplication.--A primary Federal
payment stablecoin regulator shall, to the fullest
extent possible, avoid duplication of examination
activities, reporting requirements, and requests for
information in carrying out this subsection with
respect to a permitted payment stablecoin issuer.
(C) Consideration of burden.--A primary Federal
payment stablecoin regulator shall, with respect to any
examination or request for the submission of a report
under this subsection, only request examinations and
reports at a cadence and in a format that is similar to
those required for similarly situated entities
regulated by the primary Federal payment stablecoin
regulator.
(b) Enforcement.--
(1) Suspension or revocation of registration.--The primary
Federal payment stablecoin regulator of a permitted payment
stablecoin issuer that is not a State qualified payment
stablecoin issuer may prohibit the permitted payment stablecoin
issuer from issuing payment stablecoins, if the primary Federal
payment stablecoin regulator determines that such permitted
payment stablecoin issuer, or an institution-affiliated party
of the permitted payment stablecoin issuer--
(A) is recklessly violating or has recklessly
violated this Act or any regulation or order issued
under this Act; or
(B) is recklessly violating or has recklessly
violated any condition imposed in writing by the
primary Federal payment stablecoin regulator in
connection with a written agreement entered into
between the permitted payment stablecoin issuer and the
primary Federal payment stablecoin regulator.
(2) Cease-and-desist proceedings.--If the primary Federal
payment stablecoin regulator of a permitted payment stablecoin
issuer that is not a State qualified payment stablecoin issuer
has reasonable cause to believe that the permitted payment
stablecoin issuer or any institution-affiliated party of the
permitted payment stablecoin issuer is violating, has violated,
or is attempting to violate this Act, any regulation or order
issued under this Act, or any written agreement entered into
with the primary Federal payment stablecoin regulator or
condition imposed in writing by the primary Federal payment
stablecoin regulator in connection with any application or
other request, the primary Federal payment stablecoin regulator
may, by provisions that are mandatory or otherwise, order the
permitted payment stablecoin issuer or institution-affiliated
party of the permitted payment stablecoin issuer to--
(A) cease and desist from such violation or
practice; or
(B) take affirmative action to correct the
conditions resulting from any such violation or
practice.
(3) Removal and prohibition authority.--The primary Federal
payment stablecoin regulator of a permitted payment stablecoin
issuer that is not a State qualified payment stablecoin issuer
may remove an institution-affiliated party of the permitted
payment stablecoin issuer from their position or office or
prohibit further participation in the affairs of the permitted
payment stablecoin issuer or all such permitted payment
stablecoin issuers by such institution-affiliated party, if the
primary Federal payment stablecoin regulator determines that--
(A) the institution-affiliated party has knowingly
committed a violation or attempted violation of this
Act or any regulation or order issued under this Act;
or
(B) the institution-affiliated party has knowingly
committed a violation of any provision of subchapter II
of chapter 53 of title 31, United States Code.
(4) Procedures.--
(A) In general.--If a primary Federal payment
stablecoin regulator identifies a violation or
attempted violation of this Act or makes a
determination under paragraph (1), (2), or (3), the
primary Federal payment stablecoin regulator shall
comply with the procedures set forth in subsections (b)
and (e) of sections 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818).
(B) Judicial review.--A person aggrieved by a final
action under this subsection may obtain judicial review
of such action exclusively as provided in section 8(h)
of the Federal Deposit Insurance Act (12 U.S.C.
1818(h)).
(C) Injunction.--The primary Federal payment
stablecoin regulator may, in the discretion of the
regulator, follow the procedures provided in section
8(i)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818(i)(1)) for judicial enforcement of any effective
and outstanding notice or order issued under this
subsection.
(D) Temporary cease-and-desist proceedings.--If the
primary Federal payment stablecoin regulator determines
that a violation or attempted violation of this Act or
an action with respect to which a determination was
made under paragraph (1), (2), or (3), or the
continuation thereof, is likely to cause insolvency or
significant dissipation of assets or earnings of a
permitted payment stablecoin issuer, or is likely to
weaken the condition of the permitted payment
stablecoin issuer or otherwise prejudice the interests
of the customers of the permitted payment stablecoin
issuer prior to the completion of the proceedings
conducted under this paragraph, the primary Federal
payment stablecoin regulator may follow the procedures
provided in section 8(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(c)) to issue a temporary
cease-and-desist order.
(5) Civil money penalties.--
(A) Failure to be approved.--Any person who issues
a United States dollar-denominated payment stablecoin
in violation of section 3, and any institution-
affiliated party of such a person who knowingly
participates in issuing such a payment stablecoin,
shall be liable for a civil penalty of not more than
$100,000 for each day during which such payment
stablecoins are issued.
(B) First tier.--Except as provided in subparagraph
(A), a permitted payment stablecoin issuer or
institution-affiliated party of such permitted payment
stablecoin issuer that materially violates this Act or
any regulation or order issued under this Act, or that
materially violates any condition imposed in writing by
the primary Federal payment stablecoin regulator in
connection with a written agreement entered into
between the permitted payment stablecoin issuer and the
primary Federal payment stablecoin regulator, shall be
liable for a civil penalty of up to $100,000 for each
day during which the violation continues.
(C) Second tier.--Except as provided in
subparagraph (A), and in addition to the penalties
described under subparagraph (B), a permitted payment
stablecoin issuer or institution-affiliated party of
such permitted payment stablecoin issuer who knowingly
participates in a violation of any provision of this
Act, or any regulation or order issued thereunder, is
liable for a civil penalty of up to an additional
$100,000 for each day during which the violation
continues.
(D) Procedure.--Any penalty imposed under this
paragraph may be assessed and collected by the primary
Federal payment stablecoin regulator pursuant to the
procedures set forth in section 8(i)(2) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(i)(2)).
(E) Notice and orders after separation from
service.--The resignation, termination of employment or
participation, or separation of an institution-
affiliated party (including a separation caused by the
closing of a permitted payment stablecoin issuer) shall
not affect the jurisdiction and authority of the
primary Federal payment stablecoin regulator to issue
any notice or order and proceed under this subsection
against any such party, if such notice or order is
served before the end of the 6-year period beginning on
the date such party ceased to be an institution-
affiliated party with respect to such permitted payment
stablecoin issuer.
(6) Non-applicability to a state qualified payment
stablecoin issuer.--Notwithstanding anything in this subsection
to the contrary, this subsection shall not apply to a State
qualified payment stablecoin issuer.
SEC. 7. STATE QUALIFIED PAYMENT STABLECOIN ISSUERS.
(a) In General.--A State payment stablecoin regulator shall have
supervisory, examination, and enforcement authority over all State
qualified payment stablecoin issuers of such State.
(b) Authority To Enter Into Agreements With the Board.--A State
payment stablecoin regulator may enter into a memorandum of
understanding with the Board, by mutual agreement, under which the
Board may participate in the supervision, examination, and enforcement
of this Act with respect to the State qualified payment stablecoin
issuers of such State.
(c) Sharing of Information.--A State payment stablecoin regulator
and the Board shall share information on an ongoing basis with respect
to a State qualified payment stablecoin issuer of such State, including
a copy of the initial application and any accompanying documents.
(d) Rulemaking.--A State payment stablecoin regulator may issue
orders and rules under section 4 applicable to State qualified payment
stablecoin issuers to the same extent as the primary Federal payment
stablecoin regulators issue orders and rules under section 4 applicable
to permitted payment stablecoin issuers that are not a State qualified
payment stablecoin issuers.
(e) Enforcement Authority in Unusual and Exigent Circumstances.--
(1) Board.--
(A) In general.--Subject to subparagraph (C), under
unusual and exigent circumstances that the Board
determines to exist, the Board may, after not less than
48 hours prior written notice to the applicable State
payment stablecoin regulator, take an enforcement
action against a State qualified payment stablecoin
issuer or an institution-affiliated party of such
issuer for violations of this Act during such unusual
and exigent circumstances.
(B) Rulemaking.--Consistent with section 18, the
Board shall issue rules to set forth the unusual and
exigent circumstances in which the Board may act under
this paragraph.
(C) Limitations.--If, after unusual and exigent
circumstances are determined to exist pursuant to
subparagraph (A), the Board determines that there is
reasonable cause to believe that the continuation by a
State qualified payment stablecoin issuer of any
activity constitutes a serious risk to the financial
safety, soundness, or stability of the State qualified
payment stablecoin issuer, the Board may impose such
restrictions as the Board determines to be necessary to
address such risk during such usual and exigent
circumstances. Such restrictions shall be issued in the
form of a directive, with the effect of a cease and
desist order that has become final, to the State
qualified payment stablecoin issuer and any of its
affiliates, limiting--
(i) the payment of dividends by the State
qualified payment stablecoin issuer;
(ii) transactions between the State
qualified payment stablecoin issuer, a holding
company, and the subsidiaries or affiliates of
either the State qualified payment stablecoin
issuer or the holding company; and
(iii) any activities of the State qualified
payment stablecoin issuer that might create a
serious risk that the liabilities of a holding
company and the affiliates of the holding
company may be imposed on the State qualified
payment stablecoin issuer.
(D) Review of directive.--
(i) Administrative review.--
(I) In general.--After a directive
described in subparagraph (C) is
issued, the State qualified payment
stablecoin issuer, or any institution-
affiliated party of the State qualified
payment stablecoin issuer subject to
the directive, may object and present
to the Board, in writing, the reasons
why the directive should be modified or
rescinded.
(II) Automatic lapse of
directive.--If, after 10 days after the
receipt of a response described in
subclause (I), the Board does not
affirm, modify, or rescind the
directive, the directive shall
automatically lapse.
(ii) Judicial review.--
(I) In general.--If the Board
affirms or modifies a directive
pursuant to clause (i), any affected
party may immediately thereafter
petition the United States district
court for the district in which the
main office of the affected party is
located or in the United States
District Court for the District of
Columbia to stay, modify, terminate, or
set aside the directive.
(II) Relief for extraordinary
cause.--Upon a showing of extraordinary
cause, an affected party may petition
for relief under subclause (I) without
first pursuing or exhausting the
administrative remedies under clause
(i).
(2) Comptroller.--
(A) In general.--Subject to subparagraph (C), under
unusual and exigent circumstances determined to exist
by the Comptroller, the Comptroller shall, after not
less than 48 hours prior written notice to the
applicable State payment stablecoin regulator, take an
enforcement action against a State qualified payment
stablecoin issuer that is a nonbank entity for
violations of this Act.
(B) Rulemaking.--Consistent with section 18, the
Comptroller shall issue rules to set forth the unusual
and exigent circumstances in which the Comptroller may
act under this paragraph.
(C) Limitations.--If, after unusual and exigent
circumstances are determined to exist under
subparagraph (A), the Comptroller determines that there
is reasonable cause to believe that the continuation by
a State qualified payment stablecoin issuer that is a
nonbank entity of any activity constitutes a serious
risk to the financial safety, soundness, or stability
of the State qualified payment stablecoin issuer that
is a nonbank entity, the Comptroller shall impose such
restrictions as the Comptroller determines to be
necessary to address such risk during such unusual and
exigent circumstances. Such restrictions shall be
issued in the form of a directive, with the effect of a
cease and desist order that has become final, to the
State qualified payment stablecoin issuer that is a
nonbank entity and any of its affiliates, limiting--
(i) the payment of dividends by the State
qualified payment stablecoin issuer;
(ii) transactions between the State
qualified payment stablecoin issuer, a holding
company, and the subsidiaries or affiliates of
either the State qualified payment stablecoin
issuer or the holding company; and
(iii) any activities of the State qualified
payment stablecoin issuer that might create a
serious risk that the liabilities of a holding
company and the affiliates of the holding
company may be imposed on the State qualified
payment stablecoin issuer.
(D) Review of directive.--
(i) Administrative review.--
(I) In general.--After a directive
described in subparagraph (C) is
issued, the Comptroller-regulated
entity, or any institution-affiliated
party of the Comptroller-regulated
entity subject to the directive, may
object and present to the Comptroller,
in writing, the reasons why the
directive should be modified or
rescinded.
(II) Automatic lapse of
directive.--If, after 10 days after the
receipt of a response described in
subclause (I), the Comptroller does not
affirm, modify, or rescind the
directive, the directive shall
automatically lapse.
(ii) Judicial review.--
(I) In general.--If the Comptroller
affirms or modifies a directive
pursuant to clause (i), any affected
party may immediately thereafter
petition the United States district
court for the district in which the
main office of the affected party is
located or in the United States
District Court for the District of
Columbia to stay, modify, terminate, or
set aside the directive.
(II) Relief for extraordinary
cause.--Upon a showing of extraordinary
cause, an affected party may petition
for relief under subclause (I) without
first pursuing or exhausting the
administrative remedies under clause
(i).
(f) Effect on State Law.--
(1) Host state law.--The laws of a host State, including
generally applicable laws relating to consumer protection,
shall only apply to the activities conducted in the host State
by an out-of-State State qualified payment stablecoin issuer to
the same extent as such laws apply to the activities conducted
in the host State by an out-of-State Federal qualified nonbank
payment stablecoin issuer.
(2) Home state law.--If any host State law is determined
not to apply under paragraph (1), the laws of the home State of
the State qualified payment stablecoin issuer shall govern the
activities of the permitted payment stablecoin issuer conducted
in the host State.
(3) Applicability.--The laws applicable under paragraph (1)
exclude host State laws governing the chartering, licensure, or
other authorization to do business in the host State as a
permitted payment stablecoin issuer pursuant to this Act.
SEC. 8. ANTI-MONEY LAUNDERING PROTECTIONS.
(a) Definitions.--In this subsection:
(1) Digital asset service provider.--The term ``digital
asset service provider''--
(A) means a person that, for compensation or
profit, engages in the business in the United States or
for customers or users in the United States, of--
(i) exchanging digital assets for monetary
value;
(ii) exchanging digital assets for other
digital assets;
(iii) transferring digital assets to a
third party;
(iv) acting as a digital asset custodian;
or
(v) participating in financial services
related to a digital asset issuance; and
(B) does not include--
(i) a distributed ledger protocol or a
person solely developing such a protocol; or
(ii) a person solely validating
transactions or operating a distributed ledger
node.
(2) Offering.--The term ``offering'' means making available
for purchase, sale, or exchange.
(3) Distributed ledger protocol.--The term ``distributed
ledger protocol'' means publicly available and accessible
executable software deployed to a distributed ledger, including
smart contracts or networks of smart contracts.
(4) Lawful order.--The term ``lawful order'' means any
final and valid writ, process, order, rule, decree, command, or
other requirement issued or promulgated under Federal law,
issued by a court of competent jurisdiction or by an authorized
Federal agency pursuant to its statutory authority, that--
(A) requires a permitted payment stablecoin issuer
to seize, freeze, burn, or prevent the transfer of
payment stablecoins issued by the permitted payment
stablecoin issuer;
(B) specifies the digital assets or accounts
subject to blocking with reasonable particularity; and
(C) is subject to judicial or administrative review
or appeal as provided by law.
(b) Treasury Authority to Designate Noncompliant Issuers.--Not
later than 30 days after the Department of the Treasury has, pursuant
to section 4(a)(6)(B)(i)(II), identified the failure of a foreign
issuer of any payment stablecoins trading in the United States that is
not a permitted payment stablecoin issuer to comply with the terms of
any lawful order, the Secretary of the Treasury, in coordination with
relevant Federal agencies, shall designate the foreign issuer as
noncompliant and notify the foreign issuer in writing of the
designation.
(c) Publication of Designation; Prohibition on Secondary Trading.--
(1) In general.--If a foreign issuer described in
subsection (b) does not come into compliance with the lawful
order within 30 days from the date of issuance of the written
notice described in that subsection, the Secretary of the
Treasury shall--
(A) publish the determination of noncompliance in
the Federal Register, including a statement on the
failure of the foreign issuer to comply with the lawful
order after the written notice; and
(B) issue a notification in the Federal Register
prohibiting digital asset service providers from
facilitating secondary trading of payment stablecoins
issued by the foreign issuer in the United States.
(2) Effective date of prohibition.--The prohibition on
facilitation of secondary trading described in paragraph (1)
shall become effective on the date that is 30 days after the
date of issue of notification of the prohibition in the Federal
Register.
(3) Waivers and extensions.--With respect to the
prohibition on facilitation of secondary trading described in
paragraph (1), the Secretary of the Treasury may issue waivers
and time extensions to digital asset service providers on a
case by case basis.
(4) Civil monetary penalties.--
(A) Digital asset service providers.--Any digital
asset service provider that knowingly violates a
prohibition under paragraph (1)(B) shall be subject to
a civil monetary penalty of not more than $100,000 per
violation per day.
(B) Foreign payment stablecoin issuers.--Any
foreign issuer of payment stablecoin that knowingly
continues to publicly offer a payment stablecoin in the
United States after publication of the determination of
noncompliance under paragraph (1)(A) shall be subject
to a civil monetary penalty of not more than $1,000,000
per violation per day, and the Secretary of the
Treasury may seek an injunction in a United States
District Court to bar the foreign issuer from engaging
in financial transactions in the United States or with
United States persons.
(d) Appeal.--A determination of noncompliance under subsection (b)
is subject to judicial review in the United States Court of Appeals for
the District of Columbia Circuit.
(e) Waiver, Licensing Authority, and Exceptions.--
(1) In general.--The Secretary of the Treasury may offer a
waiver, general license, or specific license to any United
States persons engaging in secondary trading described in
subsection (c) on a case by case basis if the Secretary
determines that--
(A) prohibiting secondary trading would adversely
affect the financial system of the United States; or
(B) the foreign issuer of the payment stablecoin is
taking tangible steps to remedy the failure to comply
with the lawful order that resulted in the
noncompliance determination under subsection (b).
(2) National security waiver.--The President may waive the
application of the secondary trading restrictions under
subsection (c) if the President determines that the waiver is
in the national security interest of the United States.
(3) Exceptions for intelligence and law enforcement
activities.--This Act shall not apply with respect to--
(A) activities subject to the reporting
requirements under title V of the National Security Act
of 1947 (50 U.S.C. 3091 et seq.) or any authorized
intelligence activities of the United States; or
(B) activities necessary to carry out or assist law
enforcement activity of the United States.
(4) Report required.--Not later than 7 days after issuing a
waiver or a license under paragraph (1), the Secretary of the
Treasury shall submit a report to the Chairmen and Ranking
members of the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the
House of Representatives, including the text of the waiver or
license, as well as the facts and circumstances justifying the
waiver determination, and provide a briefing on the report.
SEC. 9. CUSTODY OF PAYMENT STABLECOIN RESERVE AND COLLATERAL.
(a) In General.--A person may only engage in the business of
providing custodial or safekeeping services for the payment stablecoin
reserve, the payment stablecoins used as collateral, or the private
keys of permitted payment stablecoins if the person--
(1) is subject to--
(A) supervision or regulation by a primary Federal
payment stablecoin regulator or a primary financial
regulatory agency described under subparagraph (B) or
(C) of section 2(12) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (12 U.S.C.
5301(12)); or
(B) supervision by a State bank supervisor, as
defined under section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813) or a State credit union
supervisor, as defined under section 6003 of the Anti-
Money Laundering Act of 2020, and such state bank
supervisor or state credit union supervisor makes
available to the Board such information as the Board
determines necessary and relevant to the categories of
information under subsection (d); and
(2) complies with the requirements under subsection (b),
unless such person complies with similar requirements as
required by a primary Federal payment stablecoin regulator, the
Securities and Exchange Commission, or the Commodity Futures
Trading Commission.
(b) Customer Property Requirement.--A person described in
subsection (a) shall--
(1) treat and deal with the payment stablecoins, private
keys, cash, and other property of a person for whom or on whose
behalf the person receives, acquires, or holds payment
stablecoins, private keys, cash, and other property
(hereinafter in this section referred to as the ``customer'')
as belonging to such customer and is not the property of such
person; and
(2) take such steps as are appropriate to protect the
payment stablecoins, private keys, cash, and other property of
a customer from the claims of creditors of the person.
(c) Commingling Prohibited.--
(1) In general.--Payment stablecoins, cash, and other
property of a customer shall be separately accounted for by a
person described in subsection (a) and shall be segregated from
and not be commingled with the funds of the person.
(2) Exception.--Notwithstanding paragraph (1)--
(A) the payment stablecoins, cash, and other
property of a customer may, for convenience, be
commingled and deposited in an omnibus account holding
the payment stablecoins, cash, and other property of
more than 1 customer at a State chartered depository
institution, an insured depository institution,
national bank, or trust company;
(B) such share of the payment stablecoins, cash,
and other property of the customer that shall be
necessary to transfer, adjust, or settle a transaction
or transfer of assets may be withdrawn and applied to
such purposes, including the payment of commissions,
taxes, storage, and other charges lawfully accruing in
connection with the provision of services by a person
described in subsection (a); or
(C) in accordance with such terms and conditions as
a primary Federal payment stablecoin regulator may
prescribe by rule, regulation, or order, any customer
payment stablecoin, cash, and other property described
in this subsection may be commingled and deposited in
customer accounts with payment stablecoins, cash, and
other property received by the person and required by
the primary Federal payment stablecoin regulator to be
separately accounted for, treated, and dealt with as
belonging to customers.
(3) Customer priority.--With or without the segregation
required under paragraph (1), the claims of a customer with
respect to the property described in that paragraph shall have
priority over the claims of any person other than a customer
against a person described in subparagraph (a) unless the
customer expressly consents to such other priority of claim.
(d) Regulatory Information.--A person described under subsection
(a) shall submit to the applicable primary Federal payment stablecoin
regulator information concerning the person's business operations and
processes to protect customer assets, in such form and manner as the
primary regulator shall determine.
(e) Exclusion.--The requirements of this section shall not apply to
any person solely on the basis that such person engages in the business
of providing hardware or software to facilitate a customer's own
custody or safekeeping of the customer's payment stablecoins or private
keys.
SEC. 10. TREATMENT OF PAYMENT STABLECOIN ISSUERS IN INSOLVENCY
PROCEEDINGS.
(a) In General.--In any insolvency proceeding of a permitted
payment stablecoin issuer under Federal or State law, including any
proceeding under title 11, United States Code, and any insolvency
proceeding administered by a State payment stablecoin regulator with
respect to a permitted payment stablecoin issuer, the claim of a person
holding payment stablecoins issued by the permitted payment stablecoin
issuer shall have priority over the claims of the permitted payment
stablecoin issuer and any other creditor of the permitted payment
stablecoin issuer, with respect to required payment stablecoin
reserves, subject to section 507(e) of title 11, United States Code.
(b) Definitions.--Section 101 of title 11, United States Code, is
amended by adding after paragraph (40B) the following:
``(40C) The terms `payment stablecoin' and `permitted
payment stablecoin issuer' have the meanings given those terms
in section 2 of the Guiding and Establishing National
Innovation for U.S. Stablecoins Act of 2025.''.
(c) Automatic Stay.--Section 362 of title 11, United States Code is
amended--
(1) in subsection (a)--
(A) in paragraph (7), by striking ``and'';
(B) in paragraph (8), by striking the period and
inserting ``; and''; and
(C) by adding at the end the following:
``(9) the redemption of payment stablecoins issued by the
debtor, from payment stablecoin reserves required to be
maintained under section 4 of the Guiding and Establishing
National Innovation for U.S. Stablecoins Act of 2025.''; and
(2) in subsection (d)--
(A) in paragraph (3)(B)(ii), by striking ``or'' at
the end;
(B) in paragraph (4)(B), by striking the period at
the end and inserting ``; or''; and
(C) by inserting after paragraph (4) the following:
``(5) with respect to the redemption of payment stablecoins
held by a person, if the court finds, subject to the motion and
attestation of the debtor on the petition date, there are
payment stablecoin reserves available for distribution on a
ratable basis to similarly situated payment stablecoin holders,
provided that the court shall use best efforts to enter a final
order to begin distributions under this paragraph not later
than 14 days after the date of the required hearing.''.
(d) Priority in Bankruptcy Proceedings.--Section 507 of title 11,
United States Code, is amended--
(1) in subsection (a), by striking ``The following'' and
inserting ``Subject to subsection (e), the following''; and
(2) by adding at the end the following:
``(e) Notwithstanding subsection (a), if a payment stablecoin
holder is not able to redeem all outstanding payment stablecoin claims
from required payment stablecoin reserves maintained by the debtor, any
remaining claim of a person holding a payment stablecoin issued by the
debtor shall have first priority over any other claim, including over
any expenses and claims that have priority under that subsection, to
the extent compliance with section 4 of the Guiding and Establishing
National Innovation for U.S. Stablecoins Act of 2025 would have
required additional reserves to be maintained by the debtor for payment
stablecoin holders.''.
(e) Payment Stablecoin Reserves.--Section 541(b) of title 11,
United States Code, is amended--
(1) in paragraph (9), in the flush text following
subparagraph (B), by striking ``or'' at the end;
(2) in paragraph (10)(C), by striking the period and
inserting ``; or''; and
(3) by inserting after paragraph (10) the following:
``(11) required payment stablecoin reserves under section 4
of the Guiding and Establishing National Innovation for U.S.
Stablecoins Act of 2025.''.
(f) Intervention.--Section 1109 of title 11, United States Code, is
amended by adding at the end the following:
``(c) The Comptroller of the Currency or State payment stablecoin
regulator (as defined in section 2 of the Guiding and Establishing
National Innovation for U.S. Stablecoins Act of 2025) shall raise and
shall appear and be heard on any issue, including the protection of
customers, in a case under this chapter in which the debtor is a
permitted payment stablecoin issuer.''.
(g) Application of Existing Insolvency Law.--In accordance with
otherwise applicable law, an insolvency proceeding with respect to a
permitted payment stablecoin issuer shall occur as follows:
(1) A depository institution (as defined in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813)) shall be
resolved by the Federal Deposit Insurance Corporation, National
Credit Union Administration, or State payment stablecoin
regulator, as applicable.
(2) A subsidiary of a depository institution (as defined in
section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813)) or a nonbank entity may be considered a debtor under
title 11, United States Code.
SEC. 11. INTEROPERABILITY STANDARDS.
The primary Federal payment stablecoin regulators, in consultation
with the National Institute of Standards and Technology, other relevant
standard setting organizations, and State bank and credit union
regulators, shall assess and, if necessary, may, pursuant to section
553 of title 5 and in a manner consistent with the National Technology
Transfer and Advancement Act of 1995 (Public Law 104-113), prescribe
standards for permitted payment stablecoin issuers to promote
compatibility and interoperability with--
(1) other permitted payment stablecoin issuers; and
(2) the broader digital finance ecosystem, including
accepted communications protocols and blockchains, permissioned
or public.
SEC. 12. STUDY ON NON-PAYMENT STABLECOINS.
(a) Study by Treasury.--
(1) Study.--The Secretary of the Treasury, in consultation
with the Board, the Comptroller, the Corporation, the
Securities and Exchange Commission, and the Commodity Futures
Trading Commission shall carry out a study of non-payment
stablecoins, including endogenously collateralized payment
stablecoins.
(2) Report.--Not later than 365 days after the date of the
enactment of this Act, the Secretary shall provide to the
Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the
Senate a report that contains all findings made in carrying out
the study under paragraph (1), including an analysis of--
(A) the categories of non-payment stablecoins,
including the benefits and risks of technological
design features;
(B) the participants in non-payment stablecoin
arrangements;
(C) utilization and potential utilization of non-
payment stablecoins;
(D) nature of reserve compositions;
(E) types of algorithms being employed;
(F) governance structure, including aspects of
decentralization;
(G) nature of public promotion and advertising; and
(H) clarity and availability of consumer notices
disclosures.
(b) Endogenously Collateralized Payment Stablecoin Defined.--In
this section, the term ``endogenously collateralized payment
stablecoin'' means any digital asset--
(1) in which its originator has represented will be
converted, redeemed, or repurchased for a fixed amount of
monetary value; and
(2) that relies solely on the value of another digital
asset created or maintained by the same originator to maintain
the fixed price.
SEC. 13. REPORTS.
(a) Annual Reporting Requirement.--Beginning on the date that is 1
year after the date of enactment of this Act, and annually thereafter,
the primary Federal payment stablecoin regulators shall submit to the
Committee on Banking, Housing, and Urban Affairs of the Senate, the
Committee on Financial Services of the House of Representatives, and
the Director of the Office of Financial Research a report on the status
of the payment stablecoin industry, including--
(1) a summary of trends in payment stablecoin activities;
(2) a summary of the number of applications for permitted
payment stablecoin issuer under section 5, including aggregate
approvals and rejections of applications; and
(3) a description of the potential financial stability
risks posed to the safety and soundness of the broader
financial system by payment stablecoin activities.
(b) FSOC Report.--The Financial Stability Oversight Council shall
incorporate the findings in the report under subsection (a) into the
annual report of the Council required under section 112(a)(2)(N) of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C.
5322).
SEC. 14. AUTHORITY OF BANKING INSTITUTIONS.
(a) Rule of Construction.--Nothing in this Act may be construed to
limit the authority of a depository institution, Federal credit union,
State credit union, national bank, or trust company to engage in
activities permissible pursuant to applicable State and Federal law,
including--
(1) accepting or receiving deposits and issuing digital
assets that represent deposits;
(2) utilizing a distributed ledger for the books and
records of the entity and to affect intrabank transfers; and
(3) providing custodial services for payment stablecoins,
private keys of payment stablecoins, or reserves backing
payment stablecoins.
(b) Regulatory Review.--The primary Federal payment stablecoin
regulators shall review all existing guidance and regulations, and if
necessary, amend or promulgate new regulations and guidance, to clarify
that regulated entities can engage in the payment stablecoin activities
contemplated in, and in accordance with, this Act.
(c) Treatment of Custody Activities.--The appropriate Federal
banking agency (as defined under section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813)), the National Credit Union
Administration (in the case of a credit union), and the Securities and
Exchange Commission may not require a depository institution, national
bank, Federal credit union, State credit union, or trust company, or
any institution-affiliated party thereof--
(1) to include assets held in custody that are not owned by
the entity as a liability on the financial statement or balance
sheet of the entity, including payment stablecoin custody or
safekeeping activities;
(2) to hold regulatory capital against assets, including
reserves backing such assets described in section 4(a)(1)(A),
in custody or safekeeping, except as necessary to mitigate
against operational risks inherent with the custody or
safekeeping services, as determined by--
(A) the appropriate Federal banking agency;
(B) the National Credit Union Administration (in
the case of a credit union);
(C) a State bank supervisor (as defined under
section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813)); or
(D) a State credit union supervisor (as defined
under section 6003 of the Anti-Money Laundering Act of
2020);
(3) to recognize a liability for any obligations related to
activities or services performed for digital assets that the
entity does not own in any amount greater than the expense
recognized in the income statement or the consideration
received as a result of the corresponding obligation.
(d) Definitions.--In this section:
(1) Depository institution.--The term ``depository
institution'' has the meaning given that term under section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813).
(2) Credit union terms.--The terms ``Federal credit union''
and ``State credit union'' have the meaning given those terms,
respectively, under section 101 of the Federal Credit Union
Act.
SEC. 15. AMENDMENTS TO CLARIFY THAT PAYMENT STABLECOINS ARE NOT
SECURITIES OR COMMODITIES AND PERMITTED PAYMENT
STABLECOIN ISSUERS ARE NOT INVESTMENT COMPANIES.
(a) Investment Advisers Act of 1940.--Section 202(a)(18) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(18)) is amended by
adding at the end the following: ``The term `security' does not include
a payment stablecoin issued by a permitted payment stablecoin issuer,
as such terms are defined in section 2 of the Guiding and Establishing
National Innovation for U.S. Stablecoins Act of 2025.''.
(b) Investment Company Act of 1940.--The Investment Company Act of
1940 is amended--
(1) in section 2(a)(36) (15 U.S.C. 80a-2(a)(36))(15 U.S.C.
80a-2(a)(36)), by adding at the end the following: ``The term
`security' does not include a payment stablecoin issued by a
permitted payment stablecoin issuer, as such terms are defined
in section 2 of the Guiding and Establishing National
Innovation for U.S. Stablecoins Act of 2025.''; and
(2) in section 3(c)(3) (15 U.S.C. 80a-3(c)(3)), by
inserting ``any permitted payment stablecoin issuer, as such
term is defined in section 2 of the Guiding and Establishing
National Innovation for U.S. Stablecoins Act of 2025;'' after
``therefor;''.
(c) Securities Act of 1933.--Section 2(a)(1) of the Securities Act
of 1933 (15 U.S.C. 77b(a)(1)) is amended by adding at the end the
following: ``The term `security' does not include a payment stablecoin
issued by a permitted payment stablecoin issuer, as such terms are
defined in section 2 of the Guiding and Establishing National
Innovation for U.S. Stablecoins Act of 2025.''.
(d) Securities Exchange Act of 1934.--Section 3(a)(10) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended by
adding at the end the following: ``The term `security' does not include
a payment stablecoin issued by a permitted payment stablecoin issuer,
as such terms are defined in section 2 of the Guiding and Establishing
National Innovation for U.S. Stablecoins Act of 2025.''.
(e) Securities Investor Protection Act of 1970.--Section 16(14) of
the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll(14)) is
amended by adding at the end the following: ``The term `security' does
not include a payment stablecoin issued by a permitted payment
stablecoin issuer, as such terms are defined in section 2 of the
Guiding and Establishing National Innovation for U.S. Stablecoins Act
of 2025.''.
(f) Commodity Exchange Act.--Section 1a of the Commodity Exchange
Act (7 U.S.C. 1a) is amended by adding at the end the following: ``The
term `commodity' does not include a payment stablecoin issued by a
permitted payment stablecoin issuer, as such terms are defined in
section 2 of the Guiding and Establishing National Innovation for U.S.
payment stablecoins Act of 2025.''
SEC. 16. RECIPROCITY FOR PAYMENT STABLECOINS ISSUED IN OVERSEAS
JURISDICTIONS.
Notwithstanding section 2(15)(A)(ii)(III), the Secretary of the
Treasury shall create and implement reciprocal arrangements or other
bilateral agreements between the United States and jurisdictions with
substantially similar payment stablecoin regulatory regimes to the
requirements under this Act, including reserve requirements,
supervision, anti-money laundering and counter-terrorism features,
sanctions compliance standards, liquidity requirements, and risk
management standards, to facilitate international transactions and
interoperability with United States dollar-denominated payment
stablecoins issued overseas. The Secretary of the Treasury shall aim to
complete such arrangements not later than the date that is 2 years
after the date of enactment of this Act.
SEC. 17. EFFECTIVE DATE.
(a) In General.--This Act, and the amendments made by this Act,
shall take effect on the earlier of--
(1) 18 months after the date of enactment of this Act; or
(2) the date that is 120 days after the date on which the
primary Federal payment stablecoin regulators issue any final
regulations implementing this Act.
(b) Notice to Congress.--The primary Federal payment stablecoin
regulators shall notify Congress upon beginning to process applications
under this Act.
(c) Safe Harbor for Pending Applications.--The primary Federal
payment stablecoin regulators may waive the application of the
requirements of this Act for a period not to exceed 12 months beginning
on the effective date described under subsection (a), with respect to--
(1) a subsidiary of an insured depository institution, if
the insured depository institution has an application pending
for the subsidiary to become a permitted payment stablecoin
issuer on that effective date; or
(2) a nonbank entity with an application pending to become
a Comptroller-regulated entity on that effective date.
SEC. 18. RULEMAKING.
(a) In General.--Not later than 1 year after the date of enactment
of this Act, each primary Federal payment stablecoin regulator, the
Secretary of the Treasury, and each State payment stablecoin regulator
shall implement this Act through appropriate notice and comment
rulemaking, including promulgating regulations as described in this Act
as necessary.
(b) Coordination.--Federal payment stablecoin regulators and State
payment stablecoin regulators should coordinate on the issuance of any
regulations to implement this Act.
(c) Report Required.--Not later than 180 days after the date of
enactment of this Act, each Federal banking agency shall submit to the
Committee on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives a
report that confirms and describes the rules promulgated to implement
this Act.
Calendar No. 33
119th CONGRESS
1st Session
S. 919
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A BILL
To provide for the regulation of payment stablecoins, and for other
purposes.
_______________________________________________________________________
March 18, 2025
Reported with an amendment