II
119THCONGRESS
1
STSESSION S. 394
To provide for the regulation of payment stablecoins, and for other purposes.
IN THE SENATE OF THE UNITED STATES
FEBRUARY4, 2025
Mr. H
AGERTY(for himself, Mr. SCOTTof South Carolina, Mrs. GILLIBRAND,
and Ms. L
UMMIS) introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
A BILL
To provide for the regulation of payment stablecoins, and
for other purposes.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Guiding and Estab-4
lishing National Innovation for U.S. Stablecoins of 2025’’ 5
or the ‘‘GENIUS Act of 2025’’. 6
SEC. 2. DEFINITIONS. 7
In this Act: 8
(1) B
ANK SECRECY ACT.—The term ‘‘Bank Se-9
crecy Act’’ means— 10
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(A) section 21 of the Federal Deposit In-1
surance Act (12 U.S.C. 1829b); 2
(B) chapter 2 of title I of Public Law 91– 3
508 (12 U.S.C. 1951 et seq.); and 4
(C) subchapter II of chapter 53 of title 31, 5
United States Code. 6
(2) B
OARD.—The term ‘‘Board’’ means the 7
Board of Governors of the Federal Reserve System. 8
(3) C
OMPTROLLER.—The term ‘‘Comptroller’’ 9
means the Comptroller of the Currency. 10
(4) C
OMPTROLLER-REGULATED ENTITY .—The 11
term ‘‘Comptroller-regulated entity’’ means any Fed-12
eral qualified nonbank payment stablecoin issuer 13
that is subject to regulation and supervision exclu-14
sively by the Comptroller, pursuant to section 15
4(a)(7). 16
(5) C
ORPORATION.—The term ‘‘Corporation’’ 17
means the Federal Deposit Insurance Corporation. 18
(6) D
IGITAL ASSET.—The term ‘‘digital asset’’ 19
means any digital representation of value which is 20
recorded on a cryptographically-secured distributed 21
ledger. 22
(7) D
ISTRIBUTED LEDGER.—The term ‘‘distrib-23
uted ledger’’ means technology where data is shared 24
across a network that creates a public digital ledger 25
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of verified transactions or information among net-1
work participants and the data is linked using cryp-2
tography to maintain the integrity of the public ledg-3
er and execute other functions. 4
(8) F
EDERAL QUALIFIED NONBANK PAYMENT 5
STABLECOIN ISSUER.—The term ‘‘Federal qualified 6
nonbank payment stablecoin issuer’’ means a 7
nonbank entity approved by the primary Federal 8
payment stablecoin regulator, pursuant to section 5, 9
to issue payment stablecoins. 10
(9) I
NSTITUTION-AFFILIATED PARTY.—With re-11
spect to a permitted payment stablecoin issuer, the 12
term ‘‘institution-affiliated party’’ means any direc-13
tor, officer, employee, or person in control of, or 14
agent for, the permitted payment stablecoin issuer. 15
(10) I
NSURED DEPOSITORY INSTITUTION .—The 16
term ‘‘insured depository institution’’ means— 17
(A) an insured depository institution, as 18
defined in section 3 of the Federal Deposit In-19
surance Act (12 U.S.C. 1813); and 20
(B) an insured credit union, as defined in 21
section 101 of the Federal Credit Union Act 22
(12 U.S.C. 1752). 23
(11) M
ONETARY VALUE.—The term ‘‘monetary 24
value’’ means a national currency or deposit (as de-25
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fined under Section 3 of the Federal Deposit Insur-1
ance Act) denominated in a national currency. 2
(12) N
ATIONAL CURRENCY .—The term ‘‘na-3
tional currency’’ means a Federal Reserve note (as 4
the term is used in the first undesignated paragraph 5
of section 16 of the Federal Reserve Act (12 U.S.C. 6
411)), money issued by a central bank, and money 7
issued by an intergovernmental organization pursu-8
ant to an agreement by 1 or more governments. 9
(13) N
ONBANK ENTITY.—The term ‘‘nonbank 10
entity’’ means a person that is not an insured depos-11
itory institution or subsidiary of an insured deposi-12
tory institution. 13
(14) P
AYMENT STABLECOIN .—The term ‘‘pay-14
ment stablecoin’’— 15
(A) means a digital asset— 16
(i) that is or is designed to be used as 17
a means of payment or settlement; and 18
(ii) the issuer of which— 19
(I) is obligated to convert, re-20
deem, or repurchase for a fixed 21
amount of monetary value; and 22
(II) represents it will maintain or 23
creates the reasonable expectation 24
that it will maintain a stable value rel-25
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ative to the value of a fixed amount of 1
monetary value; and 2
(B) that is not— 3
(i) a national currency; or 4
(ii) a security issued by an investment 5
company registered under section 8(a) of 6
the Investment Company Act of 1940 (15 7
U.S.C. 80a–8(a)). 8
(15) P
ERMITTED PAYMENT STABLECOIN 9
ISSUER.—The term ‘‘permitted payment stablecoin 10
issuer’’ means— 11
(A) a subsidiary of an insured depository 12
institution that has been approved to issue pay-13
ment stablecoins under section 5; 14
(B) a Federal qualified nonbank payment 15
stablecoin issuer that has been approved to 16
issue payment stablecoins under section 5; or 17
(C) a State qualified payment stablecoin 18
issuer. 19
(16) P
ERSON.—The term ‘‘person’’ means an 20
individual, partnership, company, corporation, asso-21
ciation (incorporated or unincorporated), trust, es-22
tate, cooperative organization, or other entity. 23
(17) P
RIMARY FEDERAL PAYMENT STABLECOIN 24
REGULATOR.— 25
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(A) IN GENERAL.—The term ‘‘primary 1
Federal payment stablecoin regulator’’ means— 2
(i) with respect to an insured deposi-3
tory institution (other than an insured 4
credit union) or a subsidiary of an insured 5
depository institution (other than an in-6
sured credit union), the appropriate Fed-7
eral banking agency of such insured depos-8
itory institution (as defined under section 9
3 of the Federal Deposit Insurance Act 10
(12 U.S.C. 1813)); 11
(ii) with respect to an insured credit 12
union or a subsidiary of an insured credit 13
union, the National Credit Union Adminis-14
tration; 15
(iii) with respect to a Federal quali-16
fied nonbank payment stablecoin issuer 17
that is not a national bank, the Comp-18
troller; and 19
(iv) with respect to any entity char-20
tered by the Comptroller, the Comptroller. 21
(B) P
RIMARY FEDERAL PAYMENT 22
STABLECOIN REGULATORS .—The term ‘‘pri-23
mary Federal payment stablecoin regulators’’ 24
means the Comptroller, the Board, the Corpora-25
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tion, and the National Credit Union Adminis-1
tration. 2
(18) R
EGISTERED PUBLIC ACCOUNTING 3
FIRM.—The term ‘‘registered public accounting 4
firm’’ has the meaning given that term under section 5
2 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 6
7201). 7
(19) S
TATE.—The term ‘‘State’’ means each of 8
the several States, the District of Columbia, and 9
each territory of the United States. 10
(20) S
TATE QUALIFIED PAYMENT STABLECOIN 11
ISSUER.—The term ‘‘State qualified payment 12
stablecoin issuer’’ means an entity that— 13
(A) is legally established and approved to 14
issue payment stablecoins by a State payment 15
stablecoin regulator; and 16
(B) issues a payment stablecoin in compli-17
ance with the requirements under section 4. 18
(21) S
TATE PAYMENT STABLECOIN REGU -19
LATOR.—The term ‘‘State payment stablecoin regu-20
lator’’ means a State agency that has primary regu-21
latory and supervisory authority in such State over 22
entities that issue payment stablecoins. 23
(22) S
TATE REGULATED DEPOSITORY INSTITU -24
TION.—The term ‘‘State regulated depository insti-25
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tution’’ has the meaning given the term ‘‘State de-1
pository institution’’ in section 3(c) of the Federal 2
Deposit Insurance Act (12 U.S.C. 1813(c)). 3
(23) S
UBSIDIARY OF AN INSURED CREDIT 4
UNION.—With respect to an insured credit union, 5
the term ‘‘subsidiary of an insured credit union’’ 6
means— 7
(A) an organization providing services to 8
the insured credit union that are associated 9
with the routine operations of credit unions, as 10
described under section 107(7)(I) of the Fed-11
eral Credit Union Act (12 U.S.C. 1757(7)(I)); 12
and 13
(B) a credit union service organization, as 14
such term is used under part 712 of title 12, 15
Code of Federal Regulations, with respect to 16
which the insured credit union has an owner-17
ship interest or to which the insured credit 18
union has extended a loan. 19
SEC. 3. LIMITATION ON WHO MAY ISSUE A PAYMENT 20
STABLECOIN. 21
It shall be unlawful for any person other than a per-22
mitted payment stablecoin issuer to issue a payment 23
stablecoin in the United States. 24
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SEC. 4. REQUIREMENTS FOR ISSUING PAYMENT 1
STABLECOINS. 2
(a) S
TANDARDS FOR THE ISSUANCE OFPAYMENT 3
S
TABLECOINS.— 4
(1) I
N GENERAL .—Permitted payment 5
stablecoin issuers shall— 6
(A) maintain reserves backing the issuer’s 7
payment stablecoins outstanding on an at least 8
1 to 1 basis, with reserves comprising— 9
(i) United States coins and currency 10
(including Federal reserve notes); 11
(ii) funds held as demand deposits (or 12
other deposits that may be withdrawn 13
upon request at any time) at insured de-14
pository institutions, regulated foreign de-15
pository institutions, or insured shares at 16
insured depository institutions, subject to 17
limitations established by the Corporation 18
and the National Credit Union Administra-19
tion, respectively, to address safety and 20
soundness risks of such insured depository 21
institutions; 22
(iii) Treasury bills, notes, or bonds— 23
(I) with a remaining maturity of 24
93 days or less; or 25
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(II) issued with a maturity of 93 1
days or less; 2
(iv) repurchase agreements with a ma-3
turity of 7 days or less that are backed by 4
Treasury bills with a maturity of 90 days 5
or less; 6
(v) reverse repurchase agreements 7
with a maturity of 7 days or less that are 8
collateralized by Treasury notes, bills, or 9
bonds on an overnight basis, subject to 10
overcollateralization in line with standard 11
market terms, that are— 12
(I) tri-party; 13
(II) centrally cleared through a 14
clearing house; or 15
(III) bilateral with a 16
counterparty that the issuer has de-17
termined to be adequately credit-18
worthy even in the event of severe 19
market stress; 20
(vi) money market funds, invested 21
solely in underlying assets described in 22
clauses (i) through (iv) of subparagraph 23
(A); or 24
(vii) Central Bank reserve deposits; 25
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(B) publicly disclose the issuer’s redemp-1
tion policy; 2
(C) establish procedures for timely redemp-3
tion of outstanding payment stablecoins; and 4
(D) publish the monthly composition of the 5
issuer’s reserves on the website of the issuer, 6
containing— 7
(i) the total number of outstanding 8
payment stablecoins issued by the issuer; 9
and 10
(ii) the amount and composition of 11
the reserves described under subparagraph 12
(A). 13
(2) P
ROHIBITION ON REHYPOTHECATION .—Re-14
serves described under paragraph (1)(A) may not be 15
pledged, rehypothecated, or reused, except for the 16
purpose of creating liquidity to meet reasonable ex-17
pectations of requests to redeem payment 18
stablecoins, such that reserves in the form of Treas-19
ury bills may be pledged as collateral for repurchase 20
agreements with a maturity of 90 days or less, pro-21
vided that either— 22
(A) the repurchase agreements are cleared 23
by a central clearing counterparty that is ap-24
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proved by the primary Federal or State pay-1
ment stablecoin regulator; or 2
(B) the permitted payment stablecoin 3
issuer receives the prior approval of the primary 4
Federal or State payment stablecoin regulator. 5
(3) M
ONTHLY CERTIFICATION ; EXAMINATION 6
OF REPORTS BY REGISTERED PUBLIC ACCOUNTING 7
FIRM.— 8
(A) I
N GENERAL.—A permitted payment 9
stablecoin issuer shall, each month, have the in-10
formation disclosed in the previous month-end 11
report required under paragraph (1)(D) exam-12
ined by a registered public accounting firm. 13
(B) C
ERTIFICATION.—Each month, the 14
Chief Executive Officer and Chief Financial Of-15
ficer of a permitted payment stablecoin issuer 16
shall submit a certification as to the accuracy 17
of the monthly report to— 18
(i) the primary Federal payment 19
stablecoin regulator; or 20
(ii) in the case of a State qualified 21
payment stablecoin issuer, to the State 22
payment stablecoin regulator. 23
(C) C
RIMINAL PENALTY.—Any person who 24
submits a certification required under subpara-25
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graph (B) knowing that such certification is 1
false shall be subject to the criminal penalties 2
set forth under section 1350(c) of title 18, 3
United States Code. 4
(4) C
APITAL, LIQUIDITY, AND RISK MANAGE -5
MENT REQUIREMENTS .— 6
(A) I
N GENERAL.—The primary Federal 7
payment stablecoin regulators shall, jointly, or 8
in the case of a State qualified payment 9
stablecoin issuer, the State payment stablecoin 10
regulator shall, issue— 11
(i) capital requirements applicable to 12
permitted payment stablecoin issuers, 13
which may not exceed what is sufficient to 14
ensure the permitted payment stablecoin 15
issuer’s ongoing operations; 16
(ii) appropriate liquidity and interest 17
rate risk management standards applicable 18
to permitted payment stablecoin issuers, 19
which may not exceed what is sufficient to 20
ensure the financial integrity of the per-21
mitted payment stablecoin issuer and the 22
ability of the issuer to meet the financial 23
obligations of the issuer, including redemp-24
tions; and 25
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(iii) appropriate operational, compli-1
ance, and information technology risk 2
management standards, including Bank 3
Secrecy Act and sanctions compliance, tai-4
lored to the business model and risk profile 5
of the permitted payment stablecoin issuer, 6
consistent with other legal authorities. 7
(B) R
ULE OF CONSTRUCTION .—Nothing in 8
this paragraph shall be construed to limit— 9
(i) the authority of the primary Fed-10
eral regulators, in prescribing standards 11
under this paragraph, to tailor or differen-12
tiate among issuers on an individual basis 13
or by category, taking into consideration 14
their capital structure, riskiness, com-15
plexity, financial activities (including finan-16
cial activities of their subsidiaries), size, 17
and any other risk related factors that the 18
primary Federal regulator determines ap-19
propriate; or 20
(ii) the supervisory, regulatory, or en-21
forcement authority of an appropriate Fed-22
eral banking agency to further the safe 23
and sound operation of an institution 24
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under the supervision of the appropriate 1
Federal banking agency. 2
(C) A
PPLICABILITY OF EXISTING CAPITAL 3
STANDARDS.—With respect to the promulgation 4
of rules under subsection (a)(1)(A), section 171 5
of the Financial Stability Act of 2010 (12 6
U.S.C. 5371(a)(1)(A)) shall not apply. 7
(5) T
REATMENT UNDER THE BANK SECRECY 8
ACT.—A permitted payment stablecoin issuer shall 9
be treated as a financial institution for purposes of 10
the Bank Secrecy Act. 11
(6) L
IMITATION ON STABLECOIN ACTIVITIES .— 12
(A) I
N GENERAL.—A permitted payment 13
stablecoin issuer may only— 14
(i) issue payment stablecoins; 15
(ii) redeem payment stablecoins; 16
(iii) manage related reserves (includ-17
ing purchasing and holding reserve assets); 18
(iv) provide custodial or safekeeping 19
services for payment stablecoins, required 20
reserves, or private keys of payment 21
stablecoins; and 22
(v) undertake other functions that di-23
rectly support the work of issuing and re-24
deeming payment stablecoins. 25
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(B) RULE OF CONSTRUCTION .—Nothing in 1
subparagraph (A) shall prevent a permitted 2
stablecoin issuer from engaging in non- 3
stablecoin activities that are explicitly allowed 4
by the relevant regulator. 5
(7) R
EGULATION BY THE COMPTROLLER .— 6
(A) I
N GENERAL.—A Federal qualified 7
nonbank payment stablecoin issuer shall be reg-8
ulated and supervised exclusively by the Comp-9
troller, which shall have authority, in coordina-10
tion with other relevant regulators, to issue 11
such regulations and orders as necessary to en-12
sure the safety and soundness of the issuers, 13
consistent with the provisions of this Act. 14
(B) C
ONFORMING AMENDMENT .—Section 15
324(b) of the Revised Statutes (12 U.S.C. 1(b)) 16
is amended by adding at the end the following: 17
‘‘(3) R
EGULATION OF FEDERAL QUALIFIED 18
NONBANK PAYMENT STABLECOIN ISSUERS .—The 19
Comptroller of the Currency shall, in coordination 20
with other relevant regulators, issue such regulations 21
and orders as necessary to ensure the safety and 22
soundness of any nonbank entity approved by the 23
Comptroller to issue payment stablecoins.’’. 24
(b) S
TATE-LEVELREGULATORYREGIMES.— 25
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(1) OPTION FOR STATE -LEVEL REGULATORY 1
REGIME.—Notwithstanding the Federal regulatory 2
framework established under subsection (a), a 3
stablecoin issuer with a total market capitalization 4
of not more than $10,000,000,000 may opt for regu-5
lation under a State-level regulatory regime, pro-6
vided that the State-level regulatory regime is sub-7
stantially similar to the Federal regulatory frame-8
work under that subsection. 9
(2) R
EVIEW.—State regulators shall review 10
State-level regulatory regimes according to criteria 11
the State regulators establish for determining wheth-12
er a State-level regulatory regime is substantially 13
similar to the Federal regulatory framework under 14
subsection (a). 15
(3) C
ERTIFICATION.— 16
(A) I
NITIAL CERTIFICATION.—Subject to 17
subparagraph (B), not later than 1 year after 18
the date of enactment of this Act, State regu-19
lators shall submit to the Secretary of the 20
Treasury an initial certification that their 21
State-level regulatory regime meets the criteria 22
for substantial similarity under paragraph (2). 23
(B) F
ORM OF CERTIFICATION.—The initial 24
certification required under subparagraph (A) 25
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shall contain, in a form prescribed by the Sec-1
retary of the Treasury, an attestation that the 2
State-level regulatory regime meets the criteria 3
for substantial similarity under paragraph (2). 4
(C) A
NNUAL RECERTIFICATION .—Not later 5
than a date to be determined by the Secretary 6
each year, the State shall submit to the Sec-7
retary of the Treasury an additional certifi-8
cation that confirms the accuracy of initial cer-9
tification submitted under subparagraph (A). 10
(4) N
OT SUBSTANTIALLY SIMILAR .— 11
(A) I
N GENERAL.—If a State regulator 12
does not submit a certification under paragraph 13
(3), then a payment stablecoin issuer operating 14
under this subsection shall be subject to the 15
Federal regulatory framework as described in 16
subsection (c), notwithstanding the market cap-17
italization threshold therein. 18
(B) T
REASURY REVIEW.—The Secretary of 19
the Treasury may reject a certification under 20
paragraph (3) if the Secretary determines that 21
the State-level regulatory regime is not substan-22
tially similar to the Federal regulatory frame-23
work under subsection (a), and the payment 24
stablecoin issuer shall be subject to the Federal 25
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regulatory framework as described in subsection 1
(c), notwithstanding the market capitalization 2
threshold therein. 3
(C) A
PPELLATE REVIEW .—A payment 4
stablecoin issuer may challenge the determina-5
tion of the State regulator or the Secretary of 6
the Treasury under this paragraph in the 7
United States District Court for the District of 8
Columbia. 9
(5) L
IST.—The Secretary of the Treasury shall 10
publish and maintain in the Federal Register and on 11
the website of the Department of the Treasury a list 12
of States that have submitted initial certifications 13
and recertifications under paragraph (3). 14
(c) T
RANSITION TOFEDERALREGULATION.— 15
(1) D
EPOSITORY INSTITUTION .—A State-regu-16
lated depository institution that has been approved 17
as a payment stablecoin issuer with a market cap-18
italization of more than $10,000,000,000 shall— 19
(A) not later than 360 days after reaching 20
such market capitalization, transition to regula-21
tion under the Federal regulatory framework of 22
the Board; or 23
(B) beginning on the date of reaching such 24
market capitalization, cease issuing new 25
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stablecoins until the State-regulated stablecoin 1
issuer is under the $10,000,000,000 market 2
capitalization threshold. 3
(2) O
THER INSTITUTIONS.—A State qualified 4
payment stablecoin issuer not described in para-5
graph (1) with a market capitalization of more than 6
$10,000,000,000 shall— 7
(A) not later than 360 days after reaching 8
such market capitalization, transition to regula-9
tion under the regulatory framework of the 10
Comptroller; or 11
(B) beginning on the date of reaching such 12
market capitalization, cease issuing new 13
stablecoins until the State-regulated stablecoin 14
issuer is under the $10,000,000,000 market 15
capitalization threshold. 16
(3) C
ONDITIONAL APPROVAL .—Upon filing an 17
application with the appropriate Federal regulator, a 18
State qualified payment stablecoin issuer shall be 19
deemed conditionally approved, pending final ap-20
proval or denial of the application. 21
(4) W
AIVER.—The applicable Federal regulator 22
may waive the requirement under paragraph (1) or 23
(2) to permit a State qualified payment stablecoin 24
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issuer to remain under a State-level regulatory re-1
gime. 2
(d) R
ULEMAKING.— 3
(1) I
N GENERAL.—The primary Federal pay-4
ment stablecoin regulators and State payment 5
stablecoin regulators may issue such orders and reg-6
ulations as may be necessary to administer and 7
carry out the requirements of this section, including 8
to establish conditions, and to prevent evasions 9
thereof. 10
(2) J
OINT ISSUANCE OF REGULATION .—All reg-11
ulations issued to carry out this section shall be 12
issued jointly by the primary Federal payment 13
stablecoin regulators, if not issued by a State pay-14
ment stablecoin regulator. 15
(3) R
ULEMAKING DEADLINE .—Not later than 16
the end of the 180-day period beginning on the date 17
of enactment of this Act, the Federal payment 18
stablecoin regulators shall issue regulations to carry 19
out this section. 20
SEC. 5. APPROVAL OF SUBSIDIARIES OF INSURED DEPOSI-21
TORY INSTITUTIONS AND FEDERAL QUALI-22
FIED NONBANK PAYMENT STABLECOIN 23
ISSUERS. 24
(a) A
PPLICATION.— 25
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•S 394 IS
(1) IN GENERAL.—The primary Federal pay-1
ment stablecoin regulator shall receive, review, and 2
approve applications from any insured depository in-3
stitution that seeks to issue payment stablecoins 4
through a subsidiary and any nonbank entity that 5
seeks to issue payment stablecoins. The primary 6
Federal payment stablecoin regulator shall establish 7
a process for the licensing and regulation of these 8
entities. 9
(2) A
UTHORITY TO ISSUE REGULATIONS AND 10
PROCESS APPLICATIONS.—The primary Federal pay-11
ment stablecoin regulators shall, before the effective 12
date described in section 16— 13
(A) issue regulations to carry out this sec-14
tion; and 15
(B) pursuant to the regulations described 16
in subparagraph (A), accept and process appli-17
cations under this Act. 18
(3) M
ANDATORY APPROVAL PROCESS .—The pri-19
mary Federal payment stablecoin regulator shall, 20
upon receipt of a complete application, evaluate and 21
make a determination on each application based on 22
the criteria established under this Act. 23
(b) E
VALUATION OFAPPLICATIONS.—A complete ap-24
plication received under subsection (a) shall be evaluated 25
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•S 394 IS
by the primary Federal payment stablecoin regulator 1
using the factors described in subsection (c). 2
(c) F
ACTORSTOBECONSIDERED.—The factors de-3
scribed in this subsection are the ability of the applicant 4
(or, in the case of an applicant that is an insured deposi-5
tory institution, the subsidiary of the applicant), based on 6
the financial condition and resources, to meet the require-7
ments set forth in section 4. 8
(d) T
IMING FORDECISION; GROUNDS FOR DE-9
NIAL.— 10
(1) T
IMING.—The primary Federal payment 11
stablecoin regulator shall render a decision on an ap-12
plication no later than 120 days after informing the 13
applicant that the application is complete. 14
(2) D
ENIAL OF APPLICATION.— 15
(A) G
ROUNDS FOR DENIAL .—The primary 16
Federal payment stablecoin regulator shall only 17
deny a complete application received under sub-18
section (a) if the regulator determines that the 19
activities of the applicant would be unsafe or 20
unsound based on the factors described in sub-21
section (c). 22
(B) E
XPLANATION REQUIRED .—If the pri-23
mary Federal payment stablecoin regulator de-24
nies a complete application received under sub-25
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•S 394 IS
section (a), not later than 30 days after the 1
date of such denial, the regulator shall provide 2
the applicant with written notice explaining the 3
denial with specificity, including all findings 4
made by the regulator with respect to all identi-5
fied material shortcomings in the application, 6
including actionable recommendations on how 7
the applicant could address the identified mate-8
rial shortcomings. 9
(C) O
PPORTUNITY FOR HEARING ; FINAL 10
DETERMINATION.— 11
(i) I
N GENERAL.—Not later than 30 12
days after the date of receipt of any notice 13
of the denial of an application under this 14
section, the applicant may request, in writ-15
ing, an opportunity for a written or oral 16
hearing before the primary Federal pay-17
ment stablecoin regulator to appeal the de-18
nial. 19
(ii) T
IMING.—Upon receipt of a timely 20
request, the primary Federal payment 21
stablecoin regulator shall notice a time 22
(not later than 30 days after the date of 23
receipt of the request) and place at which 24
the applicant may appear, personally or 25
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•S 394 IS
through counsel, to submit written mate-1
rials or provide oral testimony and oral ar-2
gument). 3
(iii) F
INAL DETERMINATION .—Not 4
later than 60 days after the date of a hear-5
ing under this subparagraph, the primary 6
Federal payment stablecoin regulator shall 7
notify the applicant of the final determina-8
tion of the Comptroller, which shall con-9
tain a statement of the basis for that de-10
termination, with specific findings. 11
(iv) N
OTICE IF NO HEARING .—If an 12
applicant does not make a timely request 13
for a hearing under this subparagraph, the 14
primary Federal payment stablecoin regu-15
lator shall notify the applicant, not later 16
than 10 days after the date by which the 17
applicant may request a hearing under this 18
subparagraph, in writing, that the denial 19
of the application is a final determination 20
of the primary Federal payment stablecoin 21
regulator. 22
(3) F
AILURE TO RENDER A DECISION .—If the 23
primary Federal payment stablecoin regulator fails 24
to render a decision on a complete application within 25
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•S 394 IS
the time period specified in paragraph (1), the appli-1
cation shall be deemed approved. 2
(4) R
IGHT TO REAPPLY.—The denial of an ap-3
plication under this section shall not prohibit the ap-4
plicant from filing a subsequent application. 5
(e) R
EPORT ON PENDINGAPPLICATIONS.—The 6
Comptroller shall annually report to Congress on the ap-7
plications that have been pending for 6 months or longer 8
since the date of the initial application filed under sub-9
section (a) where the applicant has been informed that the 10
application remains incomplete, including providing docu-11
mentation on the status of the application and why the 12
application has not yet been approved. 13
(f) R
ULEMAKING.—The Comptroller shall issue rules 14
necessary for the regulation of the issuance of payment 15
stablecoins, but may not impose requirements inconsistent 16
with the requirements specified under section 4. 17
SEC. 6. SUPERVISION AND ENFORCEMENT WITH RESPECT 18
TO SUBSIDIARIES OF INSURED DEPOSITORY 19
INSTITUTIONS AND COMPTROLLER-REGU-20
LATED ENTITIES. 21
(a) S
UPERVISION.— 22
(1) S
UBSIDIARY OF AN INSURED DEPOSITORY 23
INSTITUTION.— 24
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•S 394 IS
(A) IN GENERAL.—Each permitted pay-1
ment stablecoin issuer that is a subsidiary of an 2
insured depository institution shall be subject to 3
supervision by the primary Federal payment 4
stablecoin regulator in the same manner as 5
such insured depository institution. 6
(B) G
RAMM-LEACH-BLILEY ACT.—For 7
purposes of title V of the Gramm-Leach-Bliley 8
Act (15 U.S.C. 6801 et seq.) each permitted 9
payment stablecoin issuer that is a subsidiary 10
of an insured depository institution shall be 11
deemed a financial institution. 12
(2) C
OMPTROLLER-REGULATED ENTITIES.— 13
(A) S
UBMISSION OF REPORTS .—Each 14
Comptroller-regulated entity shall, upon re-15
quest, submit reports to the Comptroller as 16
to— 17
(i) the financial condition of the 18
Comptroller-regulated entity, systems for 19
monitoring and controlling financial and 20
operating risks; and 21
(ii) compliance by the Comptroller- 22
regulated entity (and any subsidiary there-23
of) with this Act. 24
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•S 394 IS
(B) EXAMINATIONS.—The Comptroller 1
may make examinations of a Comptroller-regu-2
lated entity and each subsidiary of such entity 3
in order to inform the Comptroller of— 4
(i) the nature of the operations and fi-5
nancial condition of the Comptroller-regu-6
lated entity; 7
(ii) the financial, operational, and 8
other risks within the Comptroller-regu-9
lated entity that may pose a threat to— 10
(I) the safety and soundness of 11
the Comptroller-regulated entity; or 12
(II) the stability of the financial 13
system of the United States; and 14
(iii) the systems of the Comptroller- 15
regulated entity for monitoring and con-16
trolling the risks described in clause (ii). 17
(C) R
EQUIREMENTS FOR EFFICIENCY .— 18
(i) U
SE OF EXISTING REPORTS .—In 19
supervising and examining a Comptroller- 20
regulated entity, the Comptroller shall, to 21
the fullest extent possible, use existing re-22
ports and other supervisory information. 23
(ii) A
VOIDANCE OF DUPLICATION .— 24
The Comptroller shall, to the fullest extent 25
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•S 394 IS
possible, avoid duplication of examination 1
activities, reporting requirements, and re-2
quests for information in carrying out this 3
Act with respect to a Comptroller-regu-4
lated entity. 5
(iii) C
ONSIDERATION OF BURDEN .— 6
The Comptroller shall, with respect to any 7
examination or request for the submission 8
of a report under this paragraph, only re-9
quest examinations and reports at a ca-10
dence and in a format that is similar to 11
those required for similarly situated Comp-12
troller-regulated entities. 13
(b) E
NFORCEMENT.— 14
(1) S
USPENSION OR REVOCATION OF REGISTRA -15
TION.—The primary Federal payment stablecoin 16
regulator may prohibit a permitted payment 17
stablecoin issuer from issuing payment stablecoins, if 18
the primary Federal payment stablecoin regulator 19
determines that such permitted payment stablecoin 20
issuer, or an institution-affiliated party of the per-21
mitted payment stablecoin issuer, is— 22
(A) materially violating or has materially 23
violated this Act or any regulation or order 24
issued under this Act; or 25
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•S 394 IS
(B) materially violating or has materially 1
violated any condition imposed in writing by the 2
primary Federal payment stablecoin regulator 3
in connection with a written agreement entered 4
into between the permitted payment stablecoin 5
issuer and the primary Federal payment 6
stablecoin regulator. 7
(2) C
EASE-AND-DESIST PROCEEDINGS .—If the 8
primary Federal payment stablecoin regulator has 9
reasonable cause to believe that a permitted payment 10
stablecoin issuer or any institution-affiliated party of 11
a permitted payment stablecoin issuer is violating, 12
has violated, or is attempting to violate this Act, any 13
regulation or order issued under this Act, or any 14
written agreement entered into with the primary 15
Federal payment stablecoin regulator or condition 16
imposed in writing by the primary Federal payment 17
stablecoin regulator in connection with any applica-18
tion or other request, the primary Federal payment 19
stablecoin regulator may, by provisions that are 20
mandatory or otherwise, order the permitted pay-21
ment stablecoin issuer or institution-affiliated party 22
of the permitted payment stablecoin issuer to— 23
(A) cease and desist from such violation or 24
practice; or 25
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•S 394 IS
(B) take affirmative action to correct the 1
conditions resulting from any such violation or 2
practice. 3
(3) R
EMOVAL AND PROHIBITION AUTHORITY .— 4
The primary Federal payment stablecoin regulator 5
may remove an institution-affiliated party of a per-6
mitted payment stablecoin issuer from their position 7
or office or prohibit further participation in the af-8
fairs of the permitted payment stablecoin issuer or 9
all permitted payment stablecoin issuers by such in-10
stitution-affiliated party, if the primary Federal pay-11
ment stablecoin regulator determines that— 12
(A) the institution-affiliated party has, di-13
rectly or indirectly, committed a violation or at-14
tempted violation of this Act or any regulation 15
or order issued under this Act; or 16
(B) the institution-affiliated party has 17
committed a violation of any provision of sub-18
chapter II of chapter 53 of title 31, United 19
States Code. 20
(4) P
ROCEDURES.— 21
(A) I
N GENERAL.—If the primary Federal 22
payment stablecoin regulator identifies a viola-23
tion or attempted violation of this Act or makes 24
a determination under paragraph (1), (2), or 25
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•S 394 IS
(3), the primary Federal payment stablecoin 1
regulator shall comply with the procedures set 2
forth in subsections (b) and (e) of sections 8 of 3
the Federal Deposit Insurance Act (12 U.S.C. 4
1818). 5
(B) J
UDICIAL REVIEW.—A person ag-6
grieved by a final action under this subsection 7
may obtain judicial review of such action exclu-8
sively as provided in section 8(h) of the Federal 9
Deposit Insurance Act (12 U.S.C. 1818(h)). 10
(C) I
NJUNCTION.—The primary Federal 11
payment stablecoin regulator may, in the dis-12
cretion of the regulator, follow the procedures 13
provided in section 8(i)(1) of the Federal De-14
posit Insurance Act (12 U.S.C. 1818(i)(1)) for 15
judicial enforcement of any effective and out-16
standing notice or order issued under this sub-17
section. 18
(D) T
EMPORARY CEASE-AND-DESIST PRO-19
CEEDINGS.—If the primary Federal payment 20
stablecoin regulator determines that a violation 21
or attempted violation of this Act or an action 22
with respect to which a determination was made 23
under paragraph (1), (2), or (3), or the con-24
tinuation thereof, is likely to cause insolvency or 25
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•S 394 IS
significant dissipation of assets or earnings of a 1
permitted payment stablecoin issuer, or is likely 2
to weaken the condition of the permitted pay-3
ment stablecoin issuer or otherwise prejudice 4
the interests of the customers of the permitted 5
payment stablecoin issuer prior to the comple-6
tion the proceedings conducted under this para-7
graph, the primary Federal payment stablecoin 8
regulator may follow the procedures provided in 9
section 8(c) of the Federal Deposit Insurance 10
Act (12 U.S.C. 1818(c)) to issue a temporary 11
cease-and-desist order. 12
(5) C
IVIL MONEY PENALTIES.— 13
(A) F
AILURE TO BE APPROVED .—Any per-14
son who issues a United States dollar-denomi-15
nated payment stablecoin and who is not a per-16
mitted payment stablecoin issuer, and any insti-17
tution-affiliated party of such a person who 18
knowingly participates is issuing such a pay-19
ment stablecoin, shall be liable for a civil pen-20
alty of not more than $100,000 for each day 21
during which such payment stablecoins are 22
issued. 23
(B) F
IRST TIER.—Except as provided in 24
subparagraph (A), a permitted payment 25
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•S 394 IS
stablecoin issuer or institution-affiliated party 1
of such permitted payment stablecoin issuer 2
that materially violates this Act or any regula-3
tion or order issued under this Act, or that ma-4
terially violates any condition imposed in writ-5
ing by the primary Federal payment stablecoin 6
regulator in connection with a written agree-7
ment entered into between the permitted pay-8
ment stablecoin issuer and the primary Federal 9
payment stablecoin regulator, shall be liable for 10
a civil penalty of up to $100,000 for each day 11
during which the violation continues. 12
(C) S
ECOND TIER.—Except as provided in 13
subparagraph (A), and in addition to the pen-14
alties described under subparagraph (B), a per-15
mitted payment stablecoin issuer or institution- 16
affiliated party of such permitted payment 17
stablecoin issuer who knowingly participates in 18
a violation of any provision of this Act, or any 19
regulation or order issued thereunder, is liable 20
for a civil penalty of up to an additional 21
$100,000 for each day during which the viola-22
tion continues. 23
(D) P
ROCEDURE.—Any penalty imposed 24
under this paragraph may be assessed and col-25
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•S 394 IS
lected by the primary Federal payment 1
stablecoin regulator pursuant to the procedures 2
set forth in section 8(i)(2) of the Federal De-3
posit Insurance Act (12 U.S.C. 1818(i)(2)). 4
(E) N
OTICE AND ORDERS AFTER SEPARA -5
TION FROM SERVICE.—The resignation, termi-6
nation of employment or participation, or sepa-7
ration of an institution-affiliated party (includ-8
ing a separation caused by the closing of a per-9
mitted payment stablecoin issuer) shall not af-10
fect the jurisdiction and authority of the pri-11
mary Federal payment stablecoin regulator to 12
issue any notice or order and proceed under 13
this subsection against any such party, if such 14
notice or order is served before the end of the 15
6-year period beginning on the date such party 16
ceased to be an institution-affiliated party with 17
respect to such permitted payment stablecoin 18
issuer. 19
(6) N
ON-APPLICABILITY TO A STATE QUALI -20
FIED PAYMENT STABLECOIN ISSUER .—This sub-21
section shall not apply to a State qualified payment 22
stablecoin issuer. 23
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•S 394 IS
SEC. 7. STATE QUALIFIED PAYMENT STABLECOIN ISSUERS. 1
(a) I
NGENERAL.—A State payment stablecoin regu-2
lator shall have supervisory, examination, and enforcement 3
authority over a State qualified payment stablecoin issuer 4
of such State. 5
(b) A
UTHORITYTOENTERINTOAGREEMENTS 6
W
ITH THEBOARD.—A State payment stablecoin regu-7
lator may enter into a memorandum of understanding 8
with the Board, by mutual agreement, under which the 9
Board may carry out the supervision, examination, and 10
enforcement authority with respect to the State qualified 11
payment stablecoin issuers of such State. 12
(c) S
HARING OFINFORMATION.—A State payment 13
stablecoin regulator and the Board shall share information 14
on an ongoing basis with respect to a State qualified pay-15
ment stablecoin issuer of such State, including a copy of 16
the initial application and any accompanying documents. 17
(d) R
ULEMAKING.—A State payment stablecoin regu-18
lator may issue orders and rules under section 4 applicable 19
to State qualified payment stablecoin issuers to the same 20
extent as the primary Federal payment stablecoin regu-21
lators issue orders and rules under section 4 applicable 22
to permitted payment stablecoin issuers that are not a 23
State qualified payment stablecoin issuers. 24
(e) E
NFORCEMENT AUTHORITY INEXIGENTCIR-25
CUMSTANCES.— 26
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•S 394 IS
(1) BOARD.— 1
(A) I
N GENERAL.—Subject to subpara-2
graph (C), in exigent circumstances, the Board 3
may, after not less than 5 days prior written 4
notice to the applicable State payment 5
stablecoin regulator, take an enforcement action 6
against a State qualified payment stablecoin 7
issuer or an institution-affiliated party of such 8
issuer for violations of this Act that are exigent 9
in nature. 10
(B) R
ULEMAKING.—Not later than the end 11
of the 180-day period beginning on the date of 12
enactment of this Act, the Board shall issue 13
rules to set forth those exigent circumstances in 14
which the Board may act under this paragraph. 15
(C) L
IMITATIONS.—If the Board deter-16
mines that there is reasonable cause to believe 17
that the continuation by a State qualified pay-18
ment stablecoin issuer of any activity con-19
stitutes a serious risk to the financial safety, 20
soundness, or stability of the stablecoin issuer, 21
the Board may impose such restrictions as the 22
Board determines to be necessary to address 23
such risk. Such restrictions shall be issued in 24
the form of a directive, with the effect of a 25
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•S 394 IS
cease and desist order that has become final, to 1
the State qualified payment stablecoin issuer 2
and any of its affiliates, limiting— 3
(i) the payment of dividends by the 4
State qualified payment stablecoin issuer; 5
(ii) transactions between the State 6
qualified payment stablecoin issuer, a hold-7
ing company, and the subsidiaries or affili-8
ates of either the State qualified payment 9
stablecoin issuer or the holding company; 10
and 11
(iii) any activities of the State quali-12
fied payment stablecoin issuer that might 13
create a serious risk that the liabilities of 14
a holding company and the affiliates of the 15
holding company may be imposed on the 16
State qualified payment stablecoin issuer. 17
(D) R
EVIEW OF DIRECTIVE.— 18
(i) A
DMINISTRATIVE REVIEW.— 19
(I) I
N GENERAL.—After a direc-20
tive described in subparagraph (C) is 21
issued, the State qualified payment 22
stablecoin issuer, or any affiliate of 23
the State qualified payment stablecoin 24
issuer subject to the directive, may 25
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•S 394 IS
object and present to the Board, in 1
writing, the reasons why the directive 2
should be modified or rescinded. 3
(II) A
UTOMATIC LAPSE OF DI -4
RECTIVE.—If, after 10 days after the 5
receipt of a response described in sub-6
clause (I), the Board does not affirm, 7
modify, or rescind the directive, the 8
directive shall automatically lapse. 9
(ii) J
UDICIAL REVIEW.— 10
(I) I
N GENERAL.—If the Board 11
affirms or modifies a directive pursu-12
ant to clause (i), any affected party 13
may immediately thereafter petition 14
the United States district court for 15
the district in which the main office of 16
the affected party is located or in the 17
United States District Court for the 18
District of Columbia to stay, modify, 19
terminate, or set aside the directive. 20
(II) R
ELIEF FOR EXTRAOR -21
DINARY CAUSE.—Upon a showing of 22
extraordinary cause, an affected party 23
may petition for relief under subclause 24
(I) without first pursuing or exhaust-25
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•S 394 IS
ing the administrative remedies under 1
clause (i). 2
(2) C
OMPTROLLER.— 3
(A) I
N GENERAL.—Subject to subpara-4
graph (C), in exigent circumstances, the Comp-5
troller shall, after not less than 5 days prior 6
written notice to the applicable State payment 7
stablecoin regulator, take an enforcement action 8
against a Comptroller-regulated entity or an in-9
stitution-affiliated party of such entity for viola-10
tions of this Act. 11
(B) R
ULEMAKING.—Not later than the end 12
of the 180-day period beginning on the date of 13
enactment of this Act, the Comptroller shall 14
issue rules to set forth those exigent cir-15
cumstances in which the Comptroller may act 16
under this paragraph. 17
(C) L
IMITATIONS.—If the Comptroller de-18
termines that there is reasonable cause to be-19
lieve that the continuation by a Comptroller- 20
regulated entity of any activity constitutes a se-21
rious risk to the financial safety, soundness, or 22
stability of the stablecoin issuer, the Comp-23
troller shall impose such restrictions as the 24
Comptroller determines to be necessary to ad-25
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•S 394 IS
dress such risk. Such restrictions shall be 1
issued in the form of a directive, with the effect 2
of a cease and desist order that has become 3
final, to the State qualified payment stablecoin 4
issuer and any of its affiliates, limiting— 5
(i) the payment of dividends by the 6
Comptroller-regulated entity; 7
(ii) transactions between the Comp-8
troller-regulated entity, a holding company, 9
and the subsidiaries or affiliates of either 10
the Comptroller-regulated entity or the 11
holding company; and 12
(iii) any activities of the Comptroller- 13
regulated entity that might create a seri-14
ous risk that the liabilities of a holding 15
company and the affiliates of the holding 16
company may be imposed on the Comp-17
troller-regulated entity. 18
(D) R
EVIEW OF DIRECTIVE.— 19
(i) A
DMINISTRATIVE REVIEW.— 20
(I) I
N GENERAL.—After a direc-21
tive described in subparagraph (C) is 22
issued, the Comptroller-regulated enti-23
ty, or any affiliate of the Comptroller- 24
regulated entity subject to the direc-25
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•S 394 IS
tive, may object and present to the 1
Comptroller, in writing, the reasons 2
why the directive should be modified 3
or rescinded. 4
(II) A
UTOMATIC LAPSE OF DI -5
RECTIVE.—If, after 10 days after the 6
receipt of a response described in sub-7
clause (I), the Comptroller does not 8
affirm, modify, or rescind the direc-9
tive, the directive shall automatically 10
lapse. 11
(ii) J
UDICIAL REVIEW.— 12
(I) I
N GENERAL.—If the Comp-13
troller affirms or modifies a directive 14
pursuant to clause (i), any affected 15
party may immediately thereafter pe-16
tition the United States district court 17
for the district in which the main of-18
fice of the affected party is located or 19
in the United States District Court 20
for the District of Columbia to stay, 21
modify, terminate, or set aside the di-22
rective. 23
(II) R
ELIEF FOR EXTRAOR -24
DINARY CAUSE.—Upon a showing of 25
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extraordinary cause, an affected party 1
may petition for relief under subclause 2
(I) without first pursuing or exhaust-3
ing the administrative remedies under 4
clause (i). 5
(f) G
RAMM-LEACH-BLILEYACT.—For purposes of 6
title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 7
et seq.) a State qualified payment stablecoin issuer is 8
deemed a financial institution. 9
(g) E
FFECT ONSTATELAW.— 10
(1) H
OST STATE LAW.—The consumer protec-11
tion laws that generally apply to the operation of a 12
payment stablecoin issuer of the Host State apply to 13
the activities conducted in the Host State by an out- 14
of-State State qualified payment stablecoin issuer to 15
the same extent as those requirements apply to the 16
activities conducted in the Host State by an out-of- 17
State Federal qualified nonbank payment stablecoin 18
issuer. 19
(2) H
OME STATE LAW.—If any Host State law 20
is determined not to apply under paragraph (1), the 21
laws of the Home State of the payment stablecoin 22
issuer shall govern the activities of the payment 23
stablecoin issuer conducted in the Host State. 24
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SEC. 8. CUSTOMER PROTECTION. 1
(a) I
NGENERAL.—A person may only engage in the 2
business of providing custodial or safekeeping services for 3
permitted payment stablecoins or private keys of per-4
mitted payment stablecoins, if the person— 5
(1) is subject to— 6
(A) supervision or regulation by a primary 7
Federal payment stablecoin regulator or a pri-8
mary financial regulatory agency described 9
under subparagraph (B) or (C) of section 2(12) 10
of the Dodd-Frank Wall Street Reform and 11
Consumer Protection Act (12 U.S.C. 12
5301(12)); or 13
(B) supervision by a State bank super-14
visor, as defined under section 3 of the Federal 15
Deposit Insurance Act (12 U.S.C. 1813) or a 16
State credit union supervisor, as defined under 17
section 6003 of the Anti-Money Laundering Act 18
of 2020, and such state bank supervisor or 19
state credit union supervisor makes available to 20
the Board such information as the Board deter-21
mines necessary and relevant to the categories 22
of information under subsection (d); and 23
(2) complies with the segregation requirements 24
under subsection (b), unless such person complies 25
with similar requirements as required by a primary 26
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Federal payment stablecoin regulator, the Securities 1
and Exchange Commission, or the Commodity Fu-2
tures Trading Commission. 3
(b) S
EGREGATION REQUIREMENT.—A person de-4
scribed in subsection (a) shall— 5
(1) treat and deal with the payment stablecoins, 6
private keys, cash, and other property of a person 7
for whom or on whose behalf the person receives, ac-8
quires, or holds payment stablecoins, private keys, 9
cash, and other property (hereinafter in this section 10
referred to as the ‘‘customer’’) as belonging to such 11
customer; and 12
(2) take such steps as are appropriate to pro-13
tect the payment stablecoins, private keys, cash, and 14
other property of a customer from the claims of 15
creditors of the person. 16
(c) C
OMMINGLINGPROHIBITED.— 17
(1) I
N GENERAL.—Payment stablecoins, cash, 18
and other property of a customer shall be separately 19
accounted for by a person described in subsection 20
(a) and shall not be commingled with the funds of 21
the person. 22
(2) E
XCEPTION.—Notwithstanding paragraph 23
(1)— 24
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(A) the payment stablecoins, cash, and 1
other property of a customer may, for conven-2
ience, be commingled and deposited in an omni-3
bus account holding the payment stablecoins, 4
cash, and other property of more than 1 cus-5
tomer at an insured depository institution or 6
trust company; 7
(B) such share of the payment stablecoins, 8
cash, and other property of the customer that 9
shall be necessary to transfer, adjust, or settle 10
a transaction or transfer of assets may be with-11
drawn and applied to such purposes, including 12
the payment of commissions, taxes, storage, 13
and other charges lawfully accruing in connec-14
tion with the provision of services by a person 15
described in subsection (a); and 16
(C) in accordance with such terms and 17
conditions as the Board may prescribe by rule, 18
regulation, or order, any customer payment 19
stablecoin, cash, and other property described 20
in this subsection may be commingled and de-21
posited in customer accounts with payment 22
stablecoins, cash, and other property received 23
by the person and required by the Board to be 24
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separately accounted for, treated, and dealt 1
with as belonging to customers. 2
(d) R
EGULATORY INFORMATION.—A person de-3
scribed under subsection (a) shall submit to the applicable 4
primary regulator information concerning the person’s 5
business operations and processes to protect customer as-6
sets, in such form and manner as the primary regulator 7
shall determine. 8
(e) E
XCLUSION.—The requirements of this section 9
shall not apply to any person solely on the basis that such 10
person engages in the business of providing hardware or 11
software to facilitate a customer’s own custody or safe-12
keeping of the customer’s payment stablecoins or private 13
keys. 14
SEC. 9. TREATMENT OF INSOLVENT PAYMENT STABLECOIN 15
ISSUERS. 16
(a) I
NGENERAL.—In any insolvency proceeding, in-17
cluding any proceeding under title 11, United States Code, 18
or any insolvency proceeding by a primary Federal pay-19
ment stablecoin regulator or a State banking supervisor 20
with respect to a payment stablecoin issuer, the claim of 21
a person holding payment stablecoins issued by the pay-22
ment stablecoin issuer shall have priority over all other 23
claims against the payment stablecoin issuer. 24
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(b) PRIORITY INBANKRUPTCYPROCEEDINGS.—Sec-1
tion 507 of title 11, United States Code, is amended— 2
(1) in subsection (a), by striking ‘‘The fol-3
lowing’’ and inserting ‘‘Subject to subsection (e), the 4
following’’; and 5
(2) by adding at the end the following: 6
‘‘(e) Notwithstanding subsection (a), any claim of a 7
person holding payment stablecoins, as defined in section 8
2 of the Guiding and Establishing National Innovation for 9
U.S. Stablecoins of 2025, issued by a debtor shall have 10
first priority over any other claim against the debtor under 11
this title.’’. 12
(c) D
EBTOR.—A payment stablecoin issuer that is 13
not a depository institution (as defined in section 3 of the 14
Federal Deposit Insurance Act (12 U.S.C. 1813)) may be 15
considered a debtor under title 11, United States Code. 16
SEC. 10. INTEROPERABILITY STANDARDS. 17
The primary Federal payment stablecoin regulators, 18
in consultation with the National Institute of Standards 19
and Technology, other relevant standard setting organiza-20
tions, and State governments, shall assess and, if nec-21
essary, may, pursuant to section 553 of title 5 and in a 22
manner consistent with the National Technology Transfer 23
and Advancement Act of 1995 (Public Law 104–113), 24
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prescribe standards for payment stablecoin issuers to pro-1
mote compatibility and interoperability. 2
SEC. 11. STUDY ON ENDOGENOUSLY COLLATERALIZED 3
STABLECOINS. 4
(a) S
TUDY BYTREASURY.— 5
(1) S
TUDY.—The Secretary of the Treasury, in 6
consultation with the Board, the Comptroller, the 7
Corporation, and the Securities and Exchange Com-8
mission, shall carry out a study of endogenously 9
collateralized stablecoins. 10
(2) R
EPORT.—Not later than 365 days after 11
the date of the enactment of this Act, the Secretary 12
shall provide to the Committee on Financial Services 13
of the House of Representatives and the Committee 14
on Banking, Housing, and Urban Affairs of the Sen-15
ate a report that contains all findings made in car-16
rying out the study under paragraph (1), including 17
an analysis of— 18
(A) the categories of non-payment 19
stablecoins, including the benefits and risks of 20
technological design features; 21
(B) the participants in non-payment 22
stablecoin arrangements; 23
(C) utilization and potential utilization of 24
non-payment stablecoins; 25
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(D) nature of reserve compositions; 1
(E) types of algorithms being employed; 2
(F) governance structure, including aspects 3
of decentralization; 4
(G) nature of public promotion and adver-5
tising; and 6
(H) clarity and availability of consumer 7
notices disclosures. 8
(b) E
NDOGENOUSLY COLLATERALIZED STABLECOIN 9
D
EFINED.—In this section, the term ‘‘endogenously 10
collateralized stablecoin’’ means any digital asset— 11
(1) in which its originator has represented will 12
be converted, redeemed, or repurchased for a fixed 13
amount of monetary value; and 14
(2) that relies solely on the value of another 15
digital asset created or maintained by the same 16
originator to maintain the fixed price. 17
SEC. 12. REPORTS. 18
(a) R
ULEMAKINGSTATUS.—Not later than 6 months 19
after the date of enactment of this Act, the primary Fed-20
eral payment stablecoin regulators shall provide a status 21
update on the development of the rulemaking under this 22
Act to the Committee on Financial Services of the House 23
of Representatives and the Committee on Banking, Hous-24
ing, and Urban Affairs of the Senate. 25
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(b) ANNUALREPORTINGREQUIREMENT.—Begin-1
ning on the date that is 1 year after the date of enactment 2
of this Act, and annually thereafter, the Board and Comp-3
troller shall submit to the Committee on Banking, Hous-4
ing, and Urban Affairs of the Senate, the Committee on 5
Financial Services of the House of Representatives, and 6
the Director of the Office of Financial Research a report 7
on the status of the payment stablecoin industry, includ-8
ing— 9
(1) an overview of trends in payment stablecoin 10
activities; 11
(2) a summary of the number of applications 12
for permitted payment stablecoin issuer under sec-13
tion 5, including aggregate approvals and rejections 14
of applications; and 15
(3) a description of the potential financial sta-16
bility risks posed to the safety and soundness of the 17
broader financial system by payment stablecoin ac-18
tivities. 19
(c) FSOC R
EPORT.—The Financial Stability Over-20
sight Council shall incorporate the findings in the report 21
under subsection (b) into the annual report of the Council 22
required under section 112(a)(2)(N) of the Dodd-Frank 23
Wall Street Reform and Consumer Protection Act (12 24
U.S.C. 5322). 25
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SEC. 13. AUTHORITY OF BANKING INSTITUTIONS. 1
(a) R
ULE OFCONSTRUCTION.—Nothing in this Act 2
may be construed to limit the authority of a depository 3
institution, Federal credit union, State credit union, or 4
trust company to engage in activities permissible pursuant 5
to applicable State and Federal law, including— 6
(1) accepting or receiving deposits and issuing 7
digital assets that represent deposits; 8
(2) utilizing a distributed ledger for the books 9
and records of the entity and to affect intrabank 10
transfers; and 11
(3) providing custodial services for payment 12
stablecoins, private keys of payment stablecoins, or 13
reserves backing payment stablecoins. 14
(b) T
REATMENT OFCUSTODYACTIVITIES.—The ap-15
propriate Federal banking agency (as defined under sec-16
tion 3 of the Federal Deposit Insurance Act (12 U.S.C. 17
1813)), the National Credit Union Administration (in the 18
case of a credit union), and the Securities and Exchange 19
Commission may not require a depository institution, na-20
tional bank, Federal credit union, State credit union, or 21
trust company, or any affiliate thereof— 22
(1) to include assets held in custody as a liabil-23
ity on any financial statement or balance sheet, in-24
cluding payment stablecoin custody or safekeeping 25
activities; 26
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(2) to hold additional regulatory capital against 1
assets in custody or safekeeping, except as necessary 2
to mitigate against operational risks inherent with 3
the custody or safekeeping services, as determined 4
by— 5
(A) the appropriate Federal banking agen-6
cy; 7
(B) the National Credit Union Administra-8
tion (in the case of a credit union); 9
(C) a State bank supervisor (as defined 10
under section 3 of the Federal Deposit Insur-11
ance Act (12 U.S.C. 1813)); or 12
(D) a State credit union supervisor (as de-13
fined under section 6003 of the Anti-Money 14
Laundering Act of 2020); 15
(3) to recognize a liability for any obligations 16
related to activities or services performed for digital 17
assets that the entity does not own if that liability 18
would exceed the expense recognized in the income 19
statement as a result of the corresponding obliga-20
tion. 21
(c) D
EFINITIONS.—In this section: 22
(1) D
EPOSITORY INSTITUTION.—The term ‘‘de-23
pository institution’’ has the meaning given that 24
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term under section 3 of the Federal Deposit Insur-1
ance Act (12 U.S.C. 1813). 2
(2) C
REDIT UNION TERMS .—The terms ‘‘Fed-3
eral credit union’’ and ‘‘State credit union’’ have the 4
meaning given those terms, respectively, under sec-5
tion 101 of the Federal Credit Union Act. 6
SEC. 14. AMENDMENTS TO CLARIFY THAT PAYMENT 7
STABLECOINS ARE NOT SECURITIES OR COM-8
MODITIES. 9
(a) I
NVESTMENTADVISERSACT OF1940.—Section 10
202(a)(18) of the Investment Advisers Act of 1940 (15 11
U.S.C. 80b–2(a)(18)) is amended by adding at the end 12
the following: ‘‘The term ‘security’ does not include a pay-13
ment stablecoin issued by a permitted payment stablecoin 14
issuer, as such terms are defined, respectively, in section 15
2 of the Clarity for Payment Stablecoins Act of 2023.’’. 16
(b) I
NVESTMENTCOMPANYACT OF1940.—Section 17
2(a)(36) of the Investment Company Act of 1940 (15 18
U.S.C. 80a–2(a)(36)) is amended by adding at the end 19
the following: ‘‘The term ‘security’ does not include a pay-20
ment stablecoin issued by a permitted payment stablecoin 21
issuer, as such terms are defined, respectively, in section 22
2 of the Clarity for Payment Stablecoins Act of 2023.’’. 23
(c) S
ECURITIESACT OF1933.—Section 2(a)(1) of 24
the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) is 25
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amended by adding at the end the following: ‘‘The term 1
‘security’ does not include a payment stablecoin issued by 2
a permitted payment stablecoin issuer, as such terms are 3
defined, respectively, in section 2 of the Clarity for Pay-4
ment Stablecoins Act of 2023.’’. 5
(d) S
ECURITIESEXCHANGEACT OF1934.—Section 6
3(a)(10) of the Securities Exchange Act of 1934 (15 7
U.S.C. 78c(a)(10)) is amended by adding at the end the 8
following: ‘‘The term ‘security’ does not include a payment 9
stablecoin issued by a permitted payment stablecoin 10
issuer, as such terms are defined, respectively, in section 11
2 of the Clarity for Payment Stablecoins Act of 2023.’’. 12
(e) S
ECURITIESINVESTORPROTECTIONACT OF 13
1970.—Section 16(14) of the Securities Investor Protec-14
tion Act of 1970 (15 U.S.C. 78lll(14)) is amended by add-15
ing at the end the following: ‘‘The term ‘security’ does 16
not include a payment stablecoin issued by a permitted 17
payment stablecoin issuer, as such terms are defined, re-18
spectively, in section 2 of the Clarity for Payment 19
Stablecoins Act of 2023.’’. 20
SEC. 15. RECIPROCITY FOR STABLECOINS ISSUED IN OVER-21
SEAS JURISDICTIONS. 22
The Federal Reserve, in collaboration with the Sec-23
retary of the Treasury, shall create and implement recip-24
rocal arrangements or other bilateral agreements between 25
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the United States and jurisdictions with substantially 1
similar payment stablecoin regulatory regimes to facilitate 2
international transactions and interoperability with United 3
States dollar-denominated stablecoins issued overseas. 4
SEC. 16. EFFECTIVE DATE. 5
(a) I
NGENERAL.—This Act shall take effect on the 6
earlier of— 7
(1) 18 months after the date of enactment of 8
this Act; or 9
(2) the date that is 120 days after the date on 10
which the primary Federal payment stablecoin regu-11
lators issue any final regulations implementing this 12
Act. 13
(b) N
OTICE TOCONGRESS.—The primary Federal 14
payment stablecoin regulators shall notify Congress upon 15
beginning to process applications under this Act. 16
(c) S
AFEHARBOR FORPENDINGAPPLICATIONS.— 17
The primary Federal payment stablecoin regulators may 18
waive the application of the requirements of this Act for 19
a period not to exceed 12 months beginning on the effec-20
tive date described under subsection (a), with respect to— 21
(1) a subsidiary of an insured depository insti-22
tution, if the insured depository institution has an 23
application pending for the subsidiary to become a 24
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permitted payment stablecoin issuer on that effective 1
date; or 2
(2) a nonbank entity with an application pend-3
ing to become a Comptroller-regulated entity on that 4
effective date. 5
Æ
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