Us Congress 2025-2026 Regular Session

Us Congress Senate Bill SB394 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	II
2	2	119THCONGRESS
3	3	1
4	4	STSESSION S. 394
5	5	To provide for the regulation of payment stablecoins, and for other purposes.
6	6	IN THE SENATE OF THE UNITED STATES
7	7	FEBRUARY4, 2025
8	8	Mr. H
9	9	AGERTY(for himself, Mr. SCOTTof South Carolina, Mrs. GILLIBRAND,
10	10	and Ms. L
11	11	UMMIS) introduced the following bill; which was read twice and
12	12	referred to the Committee on Banking, Housing, and Urban Affairs
13	13	A BILL
14	14	To provide for the regulation of payment stablecoins, and
15	15	for other purposes.
16	16	Be it enacted by the Senate and House of Representa-1
17	17	tives of the United States of America in Congress assembled, 2
18	18	SECTION 1. SHORT TITLE. 3
19	19	This Act may be cited as the ‘‘Guiding and Estab-4
20	20	lishing National Innovation for U.S. Stablecoins of 2025’’ 5
21	21	or the ‘‘GENIUS Act of 2025’’. 6
22	22	SEC. 2. DEFINITIONS. 7
23	23	In this Act: 8
24	24	(1) B
25	25	ANK SECRECY ACT.—The term ‘‘Bank Se-9
26	26	crecy Act’’ means— 10
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29	29	•S 394 IS
30	30	(A) section 21 of the Federal Deposit In-1
31	31	surance Act (12 U.S.C. 1829b); 2
32	32	(B) chapter 2 of title I of Public Law 91– 3
33	33	508 (12 U.S.C. 1951 et seq.); and 4
34	34	(C) subchapter II of chapter 53 of title 31, 5
35	35	United States Code. 6
36	36	(2) B
37	37	OARD.—The term ‘‘Board’’ means the 7
38	38	Board of Governors of the Federal Reserve System. 8
39	39	(3) C
40	40	OMPTROLLER.—The term ‘‘Comptroller’’ 9
41	41	means the Comptroller of the Currency. 10
42	42	(4) C
43	43	OMPTROLLER-REGULATED ENTITY .—The 11
44	44	term ‘‘Comptroller-regulated entity’’ means any Fed-12
45	45	eral qualified nonbank payment stablecoin issuer 13
46	46	that is subject to regulation and supervision exclu-14
47	47	sively by the Comptroller, pursuant to section 15
48	48	4(a)(7). 16
49	49	(5) C
50	50	ORPORATION.—The term ‘‘Corporation’’ 17
51	51	means the Federal Deposit Insurance Corporation. 18
52	52	(6) D
53	53	IGITAL ASSET.—The term ‘‘digital asset’’ 19
54	54	means any digital representation of value which is 20
55	55	recorded on a cryptographically-secured distributed 21
56	56	ledger. 22
57	57	(7) D
58	58	ISTRIBUTED LEDGER.—The term ‘‘distrib-23
59	59	uted ledger’’ means technology where data is shared 24
60	60	across a network that creates a public digital ledger 25
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64	64	of verified transactions or information among net-1
65	65	work participants and the data is linked using cryp-2
66	66	tography to maintain the integrity of the public ledg-3
67	67	er and execute other functions. 4
68	68	(8) F
69	69	EDERAL QUALIFIED NONBANK PAYMENT 5
70	70	STABLECOIN ISSUER.—The term ‘‘Federal qualified 6
71	71	nonbank payment stablecoin issuer’’ means a 7
72	72	nonbank entity approved by the primary Federal 8
73	73	payment stablecoin regulator, pursuant to section 5, 9
74	74	to issue payment stablecoins. 10
75	75	(9) I
76	76	NSTITUTION-AFFILIATED PARTY.—With re-11
77	77	spect to a permitted payment stablecoin issuer, the 12
78	78	term ‘‘institution-affiliated party’’ means any direc-13
79	79	tor, officer, employee, or person in control of, or 14
80	80	agent for, the permitted payment stablecoin issuer. 15
81	81	(10) I
82	82	NSURED DEPOSITORY INSTITUTION .—The 16
83	83	term ‘‘insured depository institution’’ means— 17
84	84	(A) an insured depository institution, as 18
85	85	defined in section 3 of the Federal Deposit In-19
86	86	surance Act (12 U.S.C. 1813); and 20
87	87	(B) an insured credit union, as defined in 21
88	88	section 101 of the Federal Credit Union Act 22
89	89	(12 U.S.C. 1752). 23
90	90	(11) M
91	91	ONETARY VALUE.—The term ‘‘monetary 24
92	92	value’’ means a national currency or deposit (as de-25
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96	96	fined under Section 3 of the Federal Deposit Insur-1
97	97	ance Act) denominated in a national currency. 2
98	98	(12) N
99	99	ATIONAL CURRENCY .—The term ‘‘na-3
100	100	tional currency’’ means a Federal Reserve note (as 4
101	101	the term is used in the first undesignated paragraph 5
102	102	of section 16 of the Federal Reserve Act (12 U.S.C. 6
103	103	411)), money issued by a central bank, and money 7
104	104	issued by an intergovernmental organization pursu-8
105	105	ant to an agreement by 1 or more governments. 9
106	106	(13) N
107	107	ONBANK ENTITY.—The term ‘‘nonbank 10
108	108	entity’’ means a person that is not an insured depos-11
109	109	itory institution or subsidiary of an insured deposi-12
110	110	tory institution. 13
111	111	(14) P
112	112	AYMENT STABLECOIN .—The term ‘‘pay-14
113	113	ment stablecoin’’— 15
114	114	(A) means a digital asset— 16
115	115	(i) that is or is designed to be used as 17
116	116	a means of payment or settlement; and 18
117	117	(ii) the issuer of which— 19
118	118	(I) is obligated to convert, re-20
119	119	deem, or repurchase for a fixed 21
120	120	amount of monetary value; and 22
121	121	(II) represents it will maintain or 23
122	122	creates the reasonable expectation 24
123	123	that it will maintain a stable value rel-25
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126	126	•S 394 IS
127	127	ative to the value of a fixed amount of 1
128	128	monetary value; and 2
129	129	(B) that is not— 3
130	130	(i) a national currency; or 4
131	131	(ii) a security issued by an investment 5
132	132	company registered under section 8(a) of 6
133	133	the Investment Company Act of 1940 (15 7
134	134	U.S.C. 80a–8(a)). 8
135	135	(15) P
136	136	ERMITTED PAYMENT STABLECOIN 9
137	137	ISSUER.—The term ‘‘permitted payment stablecoin 10
138	138	issuer’’ means— 11
139	139	(A) a subsidiary of an insured depository 12
140	140	institution that has been approved to issue pay-13
141	141	ment stablecoins under section 5; 14
142	142	(B) a Federal qualified nonbank payment 15
143	143	stablecoin issuer that has been approved to 16
144	144	issue payment stablecoins under section 5; or 17
145	145	(C) a State qualified payment stablecoin 18
146	146	issuer. 19
147	147	(16) P
148	148	ERSON.—The term ‘‘person’’ means an 20
149	149	individual, partnership, company, corporation, asso-21
150	150	ciation (incorporated or unincorporated), trust, es-22
151	151	tate, cooperative organization, or other entity. 23
152	152	(17) P
153	153	RIMARY FEDERAL PAYMENT STABLECOIN 24
154	154	REGULATOR.— 25
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157	157	•S 394 IS
158	158	(A) IN GENERAL.—The term ‘‘primary 1
159	159	Federal payment stablecoin regulator’’ means— 2
160	160	(i) with respect to an insured deposi-3
161	161	tory institution (other than an insured 4
162	162	credit union) or a subsidiary of an insured 5
163	163	depository institution (other than an in-6
164	164	sured credit union), the appropriate Fed-7
165	165	eral banking agency of such insured depos-8
166	166	itory institution (as defined under section 9
167	167	3 of the Federal Deposit Insurance Act 10
168	168	(12 U.S.C. 1813)); 11
169	169	(ii) with respect to an insured credit 12
170	170	union or a subsidiary of an insured credit 13
171	171	union, the National Credit Union Adminis-14
172	172	tration; 15
173	173	(iii) with respect to a Federal quali-16
174	174	fied nonbank payment stablecoin issuer 17
175	175	that is not a national bank, the Comp-18
176	176	troller; and 19
177	177	(iv) with respect to any entity char-20
178	178	tered by the Comptroller, the Comptroller. 21
179	179	(B) P
180	180	RIMARY FEDERAL PAYMENT 22
181	181	STABLECOIN REGULATORS .—The term ‘‘pri-23
182	182	mary Federal payment stablecoin regulators’’ 24
183	183	means the Comptroller, the Board, the Corpora-25
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186	186	•S 394 IS
187	187	tion, and the National Credit Union Adminis-1
188	188	tration. 2
189	189	(18) R
190	190	EGISTERED PUBLIC ACCOUNTING 3
191	191	FIRM.—The term ‘‘registered public accounting 4
192	192	firm’’ has the meaning given that term under section 5
193	193	2 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 6
194	194	7201). 7
195	195	(19) S
196	196	TATE.—The term ‘‘State’’ means each of 8
197	197	the several States, the District of Columbia, and 9
198	198	each territory of the United States. 10
199	199	(20) S
200	200	TATE QUALIFIED PAYMENT STABLECOIN 11
201	201	ISSUER.—The term ‘‘State qualified payment 12
202	202	stablecoin issuer’’ means an entity that— 13
203	203	(A) is legally established and approved to 14
204	204	issue payment stablecoins by a State payment 15
205	205	stablecoin regulator; and 16
206	206	(B) issues a payment stablecoin in compli-17
207	207	ance with the requirements under section 4. 18
208	208	(21) S
209	209	TATE PAYMENT STABLECOIN REGU -19
210	210	LATOR.—The term ‘‘State payment stablecoin regu-20
211	211	lator’’ means a State agency that has primary regu-21
212	212	latory and supervisory authority in such State over 22
213	213	entities that issue payment stablecoins. 23
214	214	(22) S
215	215	TATE REGULATED DEPOSITORY INSTITU -24
216	216	TION.—The term ‘‘State regulated depository insti-25
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219	219	•S 394 IS
220	220	tution’’ has the meaning given the term ‘‘State de-1
221	221	pository institution’’ in section 3(c) of the Federal 2
222	222	Deposit Insurance Act (12 U.S.C. 1813(c)). 3
223	223	(23) S
224	224	UBSIDIARY OF AN INSURED CREDIT 4
225	225	UNION.—With respect to an insured credit union, 5
226	226	the term ‘‘subsidiary of an insured credit union’’ 6
227	227	means— 7
228	228	(A) an organization providing services to 8
229	229	the insured credit union that are associated 9
230	230	with the routine operations of credit unions, as 10
231	231	described under section 107(7)(I) of the Fed-11
232	232	eral Credit Union Act (12 U.S.C. 1757(7)(I)); 12
233	233	and 13
234	234	(B) a credit union service organization, as 14
235	235	such term is used under part 712 of title 12, 15
236	236	Code of Federal Regulations, with respect to 16
237	237	which the insured credit union has an owner-17
238	238	ship interest or to which the insured credit 18
239	239	union has extended a loan. 19
240	240	SEC. 3. LIMITATION ON WHO MAY ISSUE A PAYMENT 20
241	241	STABLECOIN. 21
242	242	It shall be unlawful for any person other than a per-22
243	243	mitted payment stablecoin issuer to issue a payment 23
244	244	stablecoin in the United States. 24
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248	248	SEC. 4. REQUIREMENTS FOR ISSUING PAYMENT 1
249	249	STABLECOINS. 2
250	250	(a) S
251	251	TANDARDS FOR THE ISSUANCE OFPAYMENT 3
252	252	S
253	253	TABLECOINS.— 4
254	254	(1) I
255	255	N GENERAL .—Permitted payment 5
256	256	stablecoin issuers shall— 6
257	257	(A) maintain reserves backing the issuer’s 7
258	258	payment stablecoins outstanding on an at least 8
259	259	1 to 1 basis, with reserves comprising— 9
260	260	(i) United States coins and currency 10
261	261	(including Federal reserve notes); 11
262	262	(ii) funds held as demand deposits (or 12
263	263	other deposits that may be withdrawn 13
264	264	upon request at any time) at insured de-14
265	265	pository institutions, regulated foreign de-15
266	266	pository institutions, or insured shares at 16
267	267	insured depository institutions, subject to 17
268	268	limitations established by the Corporation 18
269	269	and the National Credit Union Administra-19
270	270	tion, respectively, to address safety and 20
271	271	soundness risks of such insured depository 21
272	272	institutions; 22
273	273	(iii) Treasury bills, notes, or bonds— 23
274	274	(I) with a remaining maturity of 24
275	275	93 days or less; or 25
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279	279	(II) issued with a maturity of 93 1
280	280	days or less; 2
281	281	(iv) repurchase agreements with a ma-3
282	282	turity of 7 days or less that are backed by 4
283	283	Treasury bills with a maturity of 90 days 5
284	284	or less; 6
285	285	(v) reverse repurchase agreements 7
286	286	with a maturity of 7 days or less that are 8
287	287	collateralized by Treasury notes, bills, or 9
288	288	bonds on an overnight basis, subject to 10
289	289	overcollateralization in line with standard 11
290	290	market terms, that are— 12
291	291	(I) tri-party; 13
292	292	(II) centrally cleared through a 14
293	293	clearing house; or 15
294	294	(III) bilateral with a 16
295	295	counterparty that the issuer has de-17
296	296	termined to be adequately credit-18
297	297	worthy even in the event of severe 19
298	298	market stress; 20
299	299	(vi) money market funds, invested 21
300	300	solely in underlying assets described in 22
301	301	clauses (i) through (iv) of subparagraph 23
302	302	(A); or 24
303	303	(vii) Central Bank reserve deposits; 25
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307	307	(B) publicly disclose the issuer’s redemp-1
308	308	tion policy; 2
309	309	(C) establish procedures for timely redemp-3
310	310	tion of outstanding payment stablecoins; and 4
311	311	(D) publish the monthly composition of the 5
312	312	issuer’s reserves on the website of the issuer, 6
313	313	containing— 7
314	314	(i) the total number of outstanding 8
315	315	payment stablecoins issued by the issuer; 9
316	316	and 10
317	317	(ii) the amount and composition of 11
318	318	the reserves described under subparagraph 12
319	319	(A). 13
320	320	(2) P
321	321	ROHIBITION ON REHYPOTHECATION .—Re-14
322	322	serves described under paragraph (1)(A) may not be 15
323	323	pledged, rehypothecated, or reused, except for the 16
324	324	purpose of creating liquidity to meet reasonable ex-17
325	325	pectations of requests to redeem payment 18
326	326	stablecoins, such that reserves in the form of Treas-19
327	327	ury bills may be pledged as collateral for repurchase 20
328	328	agreements with a maturity of 90 days or less, pro-21
329	329	vided that either— 22
330	330	(A) the repurchase agreements are cleared 23
331	331	by a central clearing counterparty that is ap-24
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335	335	proved by the primary Federal or State pay-1
336	336	ment stablecoin regulator; or 2
337	337	(B) the permitted payment stablecoin 3
338	338	issuer receives the prior approval of the primary 4
339	339	Federal or State payment stablecoin regulator. 5
340	340	(3) M
341	341	ONTHLY CERTIFICATION ; EXAMINATION 6
342	342	OF REPORTS BY REGISTERED PUBLIC ACCOUNTING 7
343	343	FIRM.— 8
344	344	(A) I
345	345	N GENERAL.—A permitted payment 9
346	346	stablecoin issuer shall, each month, have the in-10
347	347	formation disclosed in the previous month-end 11
348	348	report required under paragraph (1)(D) exam-12
349	349	ined by a registered public accounting firm. 13
350	350	(B) C
351	351	ERTIFICATION.—Each month, the 14
352	352	Chief Executive Officer and Chief Financial Of-15
353	353	ficer of a permitted payment stablecoin issuer 16
354	354	shall submit a certification as to the accuracy 17
355	355	of the monthly report to— 18
356	356	(i) the primary Federal payment 19
357	357	stablecoin regulator; or 20
358	358	(ii) in the case of a State qualified 21
359	359	payment stablecoin issuer, to the State 22
360	360	payment stablecoin regulator. 23
361	361	(C) C
362	362	RIMINAL PENALTY.—Any person who 24
363	363	submits a certification required under subpara-25
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367	367	graph (B) knowing that such certification is 1
368	368	false shall be subject to the criminal penalties 2
369	369	set forth under section 1350(c) of title 18, 3
370	370	United States Code. 4
371	371	(4) C
372	372	APITAL, LIQUIDITY, AND RISK MANAGE -5
373	373	MENT REQUIREMENTS .— 6
374	374	(A) I
375	375	N GENERAL.—The primary Federal 7
376	376	payment stablecoin regulators shall, jointly, or 8
377	377	in the case of a State qualified payment 9
378	378	stablecoin issuer, the State payment stablecoin 10
379	379	regulator shall, issue— 11
380	380	(i) capital requirements applicable to 12
381	381	permitted payment stablecoin issuers, 13
382	382	which may not exceed what is sufficient to 14
383	383	ensure the permitted payment stablecoin 15
384	384	issuer’s ongoing operations; 16
385	385	(ii) appropriate liquidity and interest 17
386	386	rate risk management standards applicable 18
387	387	to permitted payment stablecoin issuers, 19
388	388	which may not exceed what is sufficient to 20
389	389	ensure the financial integrity of the per-21
390	390	mitted payment stablecoin issuer and the 22
391	391	ability of the issuer to meet the financial 23
392	392	obligations of the issuer, including redemp-24
393	393	tions; and 25
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397	397	(iii) appropriate operational, compli-1
398	398	ance, and information technology risk 2
399	399	management standards, including Bank 3
400	400	Secrecy Act and sanctions compliance, tai-4
401	401	lored to the business model and risk profile 5
402	402	of the permitted payment stablecoin issuer, 6
403	403	consistent with other legal authorities. 7
404	404	(B) R
405	405	ULE OF CONSTRUCTION .—Nothing in 8
406	406	this paragraph shall be construed to limit— 9
407	407	(i) the authority of the primary Fed-10
408	408	eral regulators, in prescribing standards 11
409	409	under this paragraph, to tailor or differen-12
410	410	tiate among issuers on an individual basis 13
411	411	or by category, taking into consideration 14
412	412	their capital structure, riskiness, com-15
413	413	plexity, financial activities (including finan-16
414	414	cial activities of their subsidiaries), size, 17
415	415	and any other risk related factors that the 18
416	416	primary Federal regulator determines ap-19
417	417	propriate; or 20
418	418	(ii) the supervisory, regulatory, or en-21
419	419	forcement authority of an appropriate Fed-22
420	420	eral banking agency to further the safe 23
421	421	and sound operation of an institution 24
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425	425	under the supervision of the appropriate 1
426	426	Federal banking agency. 2
427	427	(C) A
428	428	PPLICABILITY OF EXISTING CAPITAL 3
429	429	STANDARDS.—With respect to the promulgation 4
430	430	of rules under subsection (a)(1)(A), section 171 5
431	431	of the Financial Stability Act of 2010 (12 6
432	432	U.S.C. 5371(a)(1)(A)) shall not apply. 7
433	433	(5) T
434	434	REATMENT UNDER THE BANK SECRECY 8
435	435	ACT.—A permitted payment stablecoin issuer shall 9
436	436	be treated as a financial institution for purposes of 10
437	437	the Bank Secrecy Act. 11
438	438	(6) L
439	439	IMITATION ON STABLECOIN ACTIVITIES .— 12
440	440	(A) I
441	441	N GENERAL.—A permitted payment 13
442	442	stablecoin issuer may only— 14
443	443	(i) issue payment stablecoins; 15
444	444	(ii) redeem payment stablecoins; 16
445	445	(iii) manage related reserves (includ-17
446	446	ing purchasing and holding reserve assets); 18
447	447	(iv) provide custodial or safekeeping 19
448	448	services for payment stablecoins, required 20
449	449	reserves, or private keys of payment 21
450	450	stablecoins; and 22
451	451	(v) undertake other functions that di-23
452	452	rectly support the work of issuing and re-24
453	453	deeming payment stablecoins. 25
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457	457	(B) RULE OF CONSTRUCTION .—Nothing in 1
458	458	subparagraph (A) shall prevent a permitted 2
459	459	stablecoin issuer from engaging in non- 3
460	460	stablecoin activities that are explicitly allowed 4
461	461	by the relevant regulator. 5
462	462	(7) R
463	463	EGULATION BY THE COMPTROLLER .— 6
464	464	(A) I
465	465	N GENERAL.—A Federal qualified 7
466	466	nonbank payment stablecoin issuer shall be reg-8
467	467	ulated and supervised exclusively by the Comp-9
468	468	troller, which shall have authority, in coordina-10
469	469	tion with other relevant regulators, to issue 11
470	470	such regulations and orders as necessary to en-12
471	471	sure the safety and soundness of the issuers, 13
472	472	consistent with the provisions of this Act. 14
473	473	(B) C
474	474	ONFORMING AMENDMENT .—Section 15
475	475	324(b) of the Revised Statutes (12 U.S.C. 1(b)) 16
476	476	is amended by adding at the end the following: 17
477	477	‘‘(3) R
478	478	EGULATION OF FEDERAL QUALIFIED 18
479	479	NONBANK PAYMENT STABLECOIN ISSUERS .—The 19
480	480	Comptroller of the Currency shall, in coordination 20
481	481	with other relevant regulators, issue such regulations 21
482	482	and orders as necessary to ensure the safety and 22
483	483	soundness of any nonbank entity approved by the 23
484	484	Comptroller to issue payment stablecoins.’’. 24
485	485	(b) S
486	486	TATE-LEVELREGULATORYREGIMES.— 25
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489	489	•S 394 IS
490	490	(1) OPTION FOR STATE -LEVEL REGULATORY 1
491	491	REGIME.—Notwithstanding the Federal regulatory 2
492	492	framework established under subsection (a), a 3
493	493	stablecoin issuer with a total market capitalization 4
494	494	of not more than $10,000,000,000 may opt for regu-5
495	495	lation under a State-level regulatory regime, pro-6
496	496	vided that the State-level regulatory regime is sub-7
497	497	stantially similar to the Federal regulatory frame-8
498	498	work under that subsection. 9
499	499	(2) R
500	500	EVIEW.—State regulators shall review 10
501	501	State-level regulatory regimes according to criteria 11
502	502	the State regulators establish for determining wheth-12
503	503	er a State-level regulatory regime is substantially 13
504	504	similar to the Federal regulatory framework under 14
505	505	subsection (a). 15
506	506	(3) C
507	507	ERTIFICATION.— 16
508	508	(A) I
509	509	NITIAL CERTIFICATION.—Subject to 17
510	510	subparagraph (B), not later than 1 year after 18
511	511	the date of enactment of this Act, State regu-19
512	512	lators shall submit to the Secretary of the 20
513	513	Treasury an initial certification that their 21
514	514	State-level regulatory regime meets the criteria 22
515	515	for substantial similarity under paragraph (2). 23
516	516	(B) F
517	517	ORM OF CERTIFICATION.—The initial 24
518	518	certification required under subparagraph (A) 25
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521	521	•S 394 IS
522	522	shall contain, in a form prescribed by the Sec-1
523	523	retary of the Treasury, an attestation that the 2
524	524	State-level regulatory regime meets the criteria 3
525	525	for substantial similarity under paragraph (2). 4
526	526	(C) A
527	527	NNUAL RECERTIFICATION .—Not later 5
528	528	than a date to be determined by the Secretary 6
529	529	each year, the State shall submit to the Sec-7
530	530	retary of the Treasury an additional certifi-8
531	531	cation that confirms the accuracy of initial cer-9
532	532	tification submitted under subparagraph (A). 10
533	533	(4) N
534	534	OT SUBSTANTIALLY SIMILAR .— 11
535	535	(A) I
536	536	N GENERAL.—If a State regulator 12
537	537	does not submit a certification under paragraph 13
538	538	(3), then a payment stablecoin issuer operating 14
539	539	under this subsection shall be subject to the 15
540	540	Federal regulatory framework as described in 16
541	541	subsection (c), notwithstanding the market cap-17
542	542	italization threshold therein. 18
543	543	(B) T
544	544	REASURY REVIEW.—The Secretary of 19
545	545	the Treasury may reject a certification under 20
546	546	paragraph (3) if the Secretary determines that 21
547	547	the State-level regulatory regime is not substan-22
548	548	tially similar to the Federal regulatory frame-23
549	549	work under subsection (a), and the payment 24
550	550	stablecoin issuer shall be subject to the Federal 25
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553	553	•S 394 IS
554	554	regulatory framework as described in subsection 1
555	555	(c), notwithstanding the market capitalization 2
556	556	threshold therein. 3
557	557	(C) A
558	558	PPELLATE REVIEW .—A payment 4
559	559	stablecoin issuer may challenge the determina-5
560	560	tion of the State regulator or the Secretary of 6
561	561	the Treasury under this paragraph in the 7
562	562	United States District Court for the District of 8
563	563	Columbia. 9
564	564	(5) L
565	565	IST.—The Secretary of the Treasury shall 10
566	566	publish and maintain in the Federal Register and on 11
567	567	the website of the Department of the Treasury a list 12
568	568	of States that have submitted initial certifications 13
569	569	and recertifications under paragraph (3). 14
570	570	(c) T
571	571	RANSITION TOFEDERALREGULATION.— 15
572	572	(1) D
573	573	EPOSITORY INSTITUTION .—A State-regu-16
574	574	lated depository institution that has been approved 17
575	575	as a payment stablecoin issuer with a market cap-18
576	576	italization of more than $10,000,000,000 shall— 19
577	577	(A) not later than 360 days after reaching 20
578	578	such market capitalization, transition to regula-21
579	579	tion under the Federal regulatory framework of 22
580	580	the Board; or 23
581	581	(B) beginning on the date of reaching such 24
582	582	market capitalization, cease issuing new 25
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585	585	•S 394 IS
586	586	stablecoins until the State-regulated stablecoin 1
587	587	issuer is under the $10,000,000,000 market 2
588	588	capitalization threshold. 3
589	589	(2) O
590	590	THER INSTITUTIONS.—A State qualified 4
591	591	payment stablecoin issuer not described in para-5
592	592	graph (1) with a market capitalization of more than 6
593	593	$10,000,000,000 shall— 7
594	594	(A) not later than 360 days after reaching 8
595	595	such market capitalization, transition to regula-9
596	596	tion under the regulatory framework of the 10
597	597	Comptroller; or 11
598	598	(B) beginning on the date of reaching such 12
599	599	market capitalization, cease issuing new 13
600	600	stablecoins until the State-regulated stablecoin 14
601	601	issuer is under the $10,000,000,000 market 15
602	602	capitalization threshold. 16
603	603	(3) C
604	604	ONDITIONAL APPROVAL .—Upon filing an 17
605	605	application with the appropriate Federal regulator, a 18
606	606	State qualified payment stablecoin issuer shall be 19
607	607	deemed conditionally approved, pending final ap-20
608	608	proval or denial of the application. 21
609	609	(4) W
610	610	AIVER.—The applicable Federal regulator 22
611	611	may waive the requirement under paragraph (1) or 23
612	612	(2) to permit a State qualified payment stablecoin 24
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615	615	•S 394 IS
616	616	issuer to remain under a State-level regulatory re-1
617	617	gime. 2
618	618	(d) R
619	619	ULEMAKING.— 3
620	620	(1) I
621	621	N GENERAL.—The primary Federal pay-4
622	622	ment stablecoin regulators and State payment 5
623	623	stablecoin regulators may issue such orders and reg-6
624	624	ulations as may be necessary to administer and 7
625	625	carry out the requirements of this section, including 8
626	626	to establish conditions, and to prevent evasions 9
627	627	thereof. 10
628	628	(2) J
629	629	OINT ISSUANCE OF REGULATION .—All reg-11
630	630	ulations issued to carry out this section shall be 12
631	631	issued jointly by the primary Federal payment 13
632	632	stablecoin regulators, if not issued by a State pay-14
633	633	ment stablecoin regulator. 15
634	634	(3) R
635	635	ULEMAKING DEADLINE .—Not later than 16
636	636	the end of the 180-day period beginning on the date 17
637	637	of enactment of this Act, the Federal payment 18
638	638	stablecoin regulators shall issue regulations to carry 19
639	639	out this section. 20
640	640	SEC. 5. APPROVAL OF SUBSIDIARIES OF INSURED DEPOSI-21
641	641	TORY INSTITUTIONS AND FEDERAL QUALI-22
642	642	FIED NONBANK PAYMENT STABLECOIN 23
643	643	ISSUERS. 24
644	644	(a) A
645	645	PPLICATION.— 25
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648	648	•S 394 IS
649	649	(1) IN GENERAL.—The primary Federal pay-1
650	650	ment stablecoin regulator shall receive, review, and 2
651	651	approve applications from any insured depository in-3
652	652	stitution that seeks to issue payment stablecoins 4
653	653	through a subsidiary and any nonbank entity that 5
654	654	seeks to issue payment stablecoins. The primary 6
655	655	Federal payment stablecoin regulator shall establish 7
656	656	a process for the licensing and regulation of these 8
657	657	entities. 9
658	658	(2) A
659	659	UTHORITY TO ISSUE REGULATIONS AND 10
660	660	PROCESS APPLICATIONS.—The primary Federal pay-11
661	661	ment stablecoin regulators shall, before the effective 12
662	662	date described in section 16— 13
663	663	(A) issue regulations to carry out this sec-14
664	664	tion; and 15
665	665	(B) pursuant to the regulations described 16
666	666	in subparagraph (A), accept and process appli-17
667	667	cations under this Act. 18
668	668	(3) M
669	669	ANDATORY APPROVAL PROCESS .—The pri-19
670	670	mary Federal payment stablecoin regulator shall, 20
671	671	upon receipt of a complete application, evaluate and 21
672	672	make a determination on each application based on 22
673	673	the criteria established under this Act. 23
674	674	(b) E
675	675	VALUATION OFAPPLICATIONS.—A complete ap-24
676	676	plication received under subsection (a) shall be evaluated 25
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679	679	•S 394 IS
680	680	by the primary Federal payment stablecoin regulator 1
681	681	using the factors described in subsection (c). 2
682	682	(c) F
683	683	ACTORSTOBECONSIDERED.—The factors de-3
684	684	scribed in this subsection are the ability of the applicant 4
685	685	(or, in the case of an applicant that is an insured deposi-5
686	686	tory institution, the subsidiary of the applicant), based on 6
687	687	the financial condition and resources, to meet the require-7
688	688	ments set forth in section 4. 8
689	689	(d) T
690	690	IMING FORDECISION; GROUNDS FOR DE-9
691	691	NIAL.— 10
692	692	(1) T
693	693	IMING.—The primary Federal payment 11
694	694	stablecoin regulator shall render a decision on an ap-12
695	695	plication no later than 120 days after informing the 13
696	696	applicant that the application is complete. 14
697	697	(2) D
698	698	ENIAL OF APPLICATION.— 15
699	699	(A) G
700	700	ROUNDS FOR DENIAL .—The primary 16
701	701	Federal payment stablecoin regulator shall only 17
702	702	deny a complete application received under sub-18
703	703	section (a) if the regulator determines that the 19
704	704	activities of the applicant would be unsafe or 20
705	705	unsound based on the factors described in sub-21
706	706	section (c). 22
707	707	(B) E
708	708	XPLANATION REQUIRED .—If the pri-23
709	709	mary Federal payment stablecoin regulator de-24
710	710	nies a complete application received under sub-25
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713	713	•S 394 IS
714	714	section (a), not later than 30 days after the 1
715	715	date of such denial, the regulator shall provide 2
716	716	the applicant with written notice explaining the 3
717	717	denial with specificity, including all findings 4
718	718	made by the regulator with respect to all identi-5
719	719	fied material shortcomings in the application, 6
720	720	including actionable recommendations on how 7
721	721	the applicant could address the identified mate-8
722	722	rial shortcomings. 9
723	723	(C) O
724	724	PPORTUNITY FOR HEARING ; FINAL 10
725	725	DETERMINATION.— 11
726	726	(i) I
727	727	N GENERAL.—Not later than 30 12
728	728	days after the date of receipt of any notice 13
729	729	of the denial of an application under this 14
730	730	section, the applicant may request, in writ-15
731	731	ing, an opportunity for a written or oral 16
732	732	hearing before the primary Federal pay-17
733	733	ment stablecoin regulator to appeal the de-18
734	734	nial. 19
735	735	(ii) T
736	736	IMING.—Upon receipt of a timely 20
737	737	request, the primary Federal payment 21
738	738	stablecoin regulator shall notice a time 22
739	739	(not later than 30 days after the date of 23
740	740	receipt of the request) and place at which 24
741	741	the applicant may appear, personally or 25
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744	744	•S 394 IS
745	745	through counsel, to submit written mate-1
746	746	rials or provide oral testimony and oral ar-2
747	747	gument). 3
748	748	(iii) F
749	749	INAL DETERMINATION .—Not 4
750	750	later than 60 days after the date of a hear-5
751	751	ing under this subparagraph, the primary 6
752	752	Federal payment stablecoin regulator shall 7
753	753	notify the applicant of the final determina-8
754	754	tion of the Comptroller, which shall con-9
755	755	tain a statement of the basis for that de-10
756	756	termination, with specific findings. 11
757	757	(iv) N
758	758	OTICE IF NO HEARING .—If an 12
759	759	applicant does not make a timely request 13
760	760	for a hearing under this subparagraph, the 14
761	761	primary Federal payment stablecoin regu-15
762	762	lator shall notify the applicant, not later 16
763	763	than 10 days after the date by which the 17
764	764	applicant may request a hearing under this 18
765	765	subparagraph, in writing, that the denial 19
766	766	of the application is a final determination 20
767	767	of the primary Federal payment stablecoin 21
768	768	regulator. 22
769	769	(3) F
770	770	AILURE TO RENDER A DECISION .—If the 23
771	771	primary Federal payment stablecoin regulator fails 24
772	772	to render a decision on a complete application within 25
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775	775	•S 394 IS
776	776	the time period specified in paragraph (1), the appli-1
777	777	cation shall be deemed approved. 2
778	778	(4) R
779	779	IGHT TO REAPPLY.—The denial of an ap-3
780	780	plication under this section shall not prohibit the ap-4
781	781	plicant from filing a subsequent application. 5
782	782	(e) R
783	783	EPORT ON PENDINGAPPLICATIONS.—The 6
784	784	Comptroller shall annually report to Congress on the ap-7
785	785	plications that have been pending for 6 months or longer 8
786	786	since the date of the initial application filed under sub-9
787	787	section (a) where the applicant has been informed that the 10
788	788	application remains incomplete, including providing docu-11
789	789	mentation on the status of the application and why the 12
790	790	application has not yet been approved. 13
791	791	(f) R
792	792	ULEMAKING.—The Comptroller shall issue rules 14
793	793	necessary for the regulation of the issuance of payment 15
794	794	stablecoins, but may not impose requirements inconsistent 16
795	795	with the requirements specified under section 4. 17
796	796	SEC. 6. SUPERVISION AND ENFORCEMENT WITH RESPECT 18
797	797	TO SUBSIDIARIES OF INSURED DEPOSITORY 19
798	798	INSTITUTIONS AND COMPTROLLER-REGU-20
799	799	LATED ENTITIES. 21
800	800	(a) S
801	801	UPERVISION.— 22
802	802	(1) S
803	803	UBSIDIARY OF AN INSURED DEPOSITORY 23
804	804	INSTITUTION.— 24
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808	808	(A) IN GENERAL.—Each permitted pay-1
809	809	ment stablecoin issuer that is a subsidiary of an 2
810	810	insured depository institution shall be subject to 3
811	811	supervision by the primary Federal payment 4
812	812	stablecoin regulator in the same manner as 5
813	813	such insured depository institution. 6
814	814	(B) G
815	815	RAMM-LEACH-BLILEY ACT.—For 7
816	816	purposes of title V of the Gramm-Leach-Bliley 8
817	817	Act (15 U.S.C. 6801 et seq.) each permitted 9
818	818	payment stablecoin issuer that is a subsidiary 10
819	819	of an insured depository institution shall be 11
820	820	deemed a financial institution. 12
821	821	(2) C
822	822	OMPTROLLER-REGULATED ENTITIES.— 13
823	823	(A) S
824	824	UBMISSION OF REPORTS .—Each 14
825	825	Comptroller-regulated entity shall, upon re-15
826	826	quest, submit reports to the Comptroller as 16
827	827	to— 17
828	828	(i) the financial condition of the 18
829	829	Comptroller-regulated entity, systems for 19
830	830	monitoring and controlling financial and 20
831	831	operating risks; and 21
832	832	(ii) compliance by the Comptroller- 22
833	833	regulated entity (and any subsidiary there-23
834	834	of) with this Act. 24
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838	838	(B) EXAMINATIONS.—The Comptroller 1
839	839	may make examinations of a Comptroller-regu-2
840	840	lated entity and each subsidiary of such entity 3
841	841	in order to inform the Comptroller of— 4
842	842	(i) the nature of the operations and fi-5
843	843	nancial condition of the Comptroller-regu-6
844	844	lated entity; 7
845	845	(ii) the financial, operational, and 8
846	846	other risks within the Comptroller-regu-9
847	847	lated entity that may pose a threat to— 10
848	848	(I) the safety and soundness of 11
849	849	the Comptroller-regulated entity; or 12
850	850	(II) the stability of the financial 13
851	851	system of the United States; and 14
852	852	(iii) the systems of the Comptroller- 15
853	853	regulated entity for monitoring and con-16
854	854	trolling the risks described in clause (ii). 17
855	855	(C) R
856	856	EQUIREMENTS FOR EFFICIENCY .— 18
857	857	(i) U
858	858	SE OF EXISTING REPORTS .—In 19
859	859	supervising and examining a Comptroller- 20
860	860	regulated entity, the Comptroller shall, to 21
861	861	the fullest extent possible, use existing re-22
862	862	ports and other supervisory information. 23
863	863	(ii) A
864	864	VOIDANCE OF DUPLICATION .— 24
865	865	The Comptroller shall, to the fullest extent 25
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869	869	possible, avoid duplication of examination 1
870	870	activities, reporting requirements, and re-2
871	871	quests for information in carrying out this 3
872	872	Act with respect to a Comptroller-regu-4
873	873	lated entity. 5
874	874	(iii) C
875	875	ONSIDERATION OF BURDEN .— 6
876	876	The Comptroller shall, with respect to any 7
877	877	examination or request for the submission 8
878	878	of a report under this paragraph, only re-9
879	879	quest examinations and reports at a ca-10
880	880	dence and in a format that is similar to 11
881	881	those required for similarly situated Comp-12
882	882	troller-regulated entities. 13
883	883	(b) E
884	884	NFORCEMENT.— 14
885	885	(1) S
886	886	USPENSION OR REVOCATION OF REGISTRA -15
887	887	TION.—The primary Federal payment stablecoin 16
888	888	regulator may prohibit a permitted payment 17
889	889	stablecoin issuer from issuing payment stablecoins, if 18
890	890	the primary Federal payment stablecoin regulator 19
891	891	determines that such permitted payment stablecoin 20
892	892	issuer, or an institution-affiliated party of the per-21
893	893	mitted payment stablecoin issuer, is— 22
894	894	(A) materially violating or has materially 23
895	895	violated this Act or any regulation or order 24
896	896	issued under this Act; or 25
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900	900	(B) materially violating or has materially 1
901	901	violated any condition imposed in writing by the 2
902	902	primary Federal payment stablecoin regulator 3
903	903	in connection with a written agreement entered 4
904	904	into between the permitted payment stablecoin 5
905	905	issuer and the primary Federal payment 6
906	906	stablecoin regulator. 7
907	907	(2) C
908	908	EASE-AND-DESIST PROCEEDINGS .—If the 8
909	909	primary Federal payment stablecoin regulator has 9
910	910	reasonable cause to believe that a permitted payment 10
911	911	stablecoin issuer or any institution-affiliated party of 11
912	912	a permitted payment stablecoin issuer is violating, 12
913	913	has violated, or is attempting to violate this Act, any 13
914	914	regulation or order issued under this Act, or any 14
915	915	written agreement entered into with the primary 15
916	916	Federal payment stablecoin regulator or condition 16
917	917	imposed in writing by the primary Federal payment 17
918	918	stablecoin regulator in connection with any applica-18
919	919	tion or other request, the primary Federal payment 19
920	920	stablecoin regulator may, by provisions that are 20
921	921	mandatory or otherwise, order the permitted pay-21
922	922	ment stablecoin issuer or institution-affiliated party 22
923	923	of the permitted payment stablecoin issuer to— 23
924	924	(A) cease and desist from such violation or 24
925	925	practice; or 25
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929	929	(B) take affirmative action to correct the 1
930	930	conditions resulting from any such violation or 2
931	931	practice. 3
932	932	(3) R
933	933	EMOVAL AND PROHIBITION AUTHORITY .— 4
934	934	The primary Federal payment stablecoin regulator 5
935	935	may remove an institution-affiliated party of a per-6
936	936	mitted payment stablecoin issuer from their position 7
937	937	or office or prohibit further participation in the af-8
938	938	fairs of the permitted payment stablecoin issuer or 9
939	939	all permitted payment stablecoin issuers by such in-10
940	940	stitution-affiliated party, if the primary Federal pay-11
941	941	ment stablecoin regulator determines that— 12
942	942	(A) the institution-affiliated party has, di-13
943	943	rectly or indirectly, committed a violation or at-14
944	944	tempted violation of this Act or any regulation 15
945	945	or order issued under this Act; or 16
946	946	(B) the institution-affiliated party has 17
947	947	committed a violation of any provision of sub-18
948	948	chapter II of chapter 53 of title 31, United 19
949	949	States Code. 20
950	950	(4) P
951	951	ROCEDURES.— 21
952	952	(A) I
953	953	N GENERAL.—If the primary Federal 22
954	954	payment stablecoin regulator identifies a viola-23
955	955	tion or attempted violation of this Act or makes 24
956	956	a determination under paragraph (1), (2), or 25
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960	960	(3), the primary Federal payment stablecoin 1
961	961	regulator shall comply with the procedures set 2
962	962	forth in subsections (b) and (e) of sections 8 of 3
963	963	the Federal Deposit Insurance Act (12 U.S.C. 4
964	964	1818). 5
965	965	(B) J
966	966	UDICIAL REVIEW.—A person ag-6
967	967	grieved by a final action under this subsection 7
968	968	may obtain judicial review of such action exclu-8
969	969	sively as provided in section 8(h) of the Federal 9
970	970	Deposit Insurance Act (12 U.S.C. 1818(h)). 10
971	971	(C) I
972	972	NJUNCTION.—The primary Federal 11
973	973	payment stablecoin regulator may, in the dis-12
974	974	cretion of the regulator, follow the procedures 13
975	975	provided in section 8(i)(1) of the Federal De-14
976	976	posit Insurance Act (12 U.S.C. 1818(i)(1)) for 15
977	977	judicial enforcement of any effective and out-16
978	978	standing notice or order issued under this sub-17
979	979	section. 18
980	980	(D) T
981	981	EMPORARY CEASE-AND-DESIST PRO-19
982	982	CEEDINGS.—If the primary Federal payment 20
983	983	stablecoin regulator determines that a violation 21
984	984	or attempted violation of this Act or an action 22
985	985	with respect to which a determination was made 23
986	986	under paragraph (1), (2), or (3), or the con-24
987	987	tinuation thereof, is likely to cause insolvency or 25
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990	990	•S 394 IS
991	991	significant dissipation of assets or earnings of a 1
992	992	permitted payment stablecoin issuer, or is likely 2
993	993	to weaken the condition of the permitted pay-3
994	994	ment stablecoin issuer or otherwise prejudice 4
995	995	the interests of the customers of the permitted 5
996	996	payment stablecoin issuer prior to the comple-6
997	997	tion the proceedings conducted under this para-7
998	998	graph, the primary Federal payment stablecoin 8
999	999	regulator may follow the procedures provided in 9
1000	1000	section 8(c) of the Federal Deposit Insurance 10
1001	1001	Act (12 U.S.C. 1818(c)) to issue a temporary 11
1002	1002	cease-and-desist order. 12
1003	1003	(5) C
1004	1004	IVIL MONEY PENALTIES.— 13
1005	1005	(A) F
1006	1006	AILURE TO BE APPROVED .—Any per-14
1007	1007	son who issues a United States dollar-denomi-15
1008	1008	nated payment stablecoin and who is not a per-16
1009	1009	mitted payment stablecoin issuer, and any insti-17
1010	1010	tution-affiliated party of such a person who 18
1011	1011	knowingly participates is issuing such a pay-19
1012	1012	ment stablecoin, shall be liable for a civil pen-20
1013	1013	alty of not more than $100,000 for each day 21
1014	1014	during which such payment stablecoins are 22
1015	1015	issued. 23
1016	1016	(B) F
1017	1017	IRST TIER.—Except as provided in 24
1018	1018	subparagraph (A), a permitted payment 25
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1021	1021	•S 394 IS
1022	1022	stablecoin issuer or institution-affiliated party 1
1023	1023	of such permitted payment stablecoin issuer 2
1024	1024	that materially violates this Act or any regula-3
1025	1025	tion or order issued under this Act, or that ma-4
1026	1026	terially violates any condition imposed in writ-5
1027	1027	ing by the primary Federal payment stablecoin 6
1028	1028	regulator in connection with a written agree-7
1029	1029	ment entered into between the permitted pay-8
1030	1030	ment stablecoin issuer and the primary Federal 9
1031	1031	payment stablecoin regulator, shall be liable for 10
1032	1032	a civil penalty of up to $100,000 for each day 11
1033	1033	during which the violation continues. 12
1034	1034	(C) S
1035	1035	ECOND TIER.—Except as provided in 13
1036	1036	subparagraph (A), and in addition to the pen-14
1037	1037	alties described under subparagraph (B), a per-15
1038	1038	mitted payment stablecoin issuer or institution- 16
1039	1039	affiliated party of such permitted payment 17
1040	1040	stablecoin issuer who knowingly participates in 18
1041	1041	a violation of any provision of this Act, or any 19
1042	1042	regulation or order issued thereunder, is liable 20
1043	1043	for a civil penalty of up to an additional 21
1044	1044	$100,000 for each day during which the viola-22
1045	1045	tion continues. 23
1046	1046	(D) P
1047	1047	ROCEDURE.—Any penalty imposed 24
1048	1048	under this paragraph may be assessed and col-25
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1051	1051	•S 394 IS
1052	1052	lected by the primary Federal payment 1
1053	1053	stablecoin regulator pursuant to the procedures 2
1054	1054	set forth in section 8(i)(2) of the Federal De-3
1055	1055	posit Insurance Act (12 U.S.C. 1818(i)(2)). 4
1056	1056	(E) N
1057	1057	OTICE AND ORDERS AFTER SEPARA -5
1058	1058	TION FROM SERVICE.—The resignation, termi-6
1059	1059	nation of employment or participation, or sepa-7
1060	1060	ration of an institution-affiliated party (includ-8
1061	1061	ing a separation caused by the closing of a per-9
1062	1062	mitted payment stablecoin issuer) shall not af-10
1063	1063	fect the jurisdiction and authority of the pri-11
1064	1064	mary Federal payment stablecoin regulator to 12
1065	1065	issue any notice or order and proceed under 13
1066	1066	this subsection against any such party, if such 14
1067	1067	notice or order is served before the end of the 15
1068	1068	6-year period beginning on the date such party 16
1069	1069	ceased to be an institution-affiliated party with 17
1070	1070	respect to such permitted payment stablecoin 18
1071	1071	issuer. 19
1072	1072	(6) N
1073	1073	ON-APPLICABILITY TO A STATE QUALI -20
1074	1074	FIED PAYMENT STABLECOIN ISSUER .—This sub-21
1075	1075	section shall not apply to a State qualified payment 22
1076	1076	stablecoin issuer. 23
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1079	1079	•S 394 IS
1080	1080	SEC. 7. STATE QUALIFIED PAYMENT STABLECOIN ISSUERS. 1
1081	1081	(a) I
1082	1082	NGENERAL.—A State payment stablecoin regu-2
1083	1083	lator shall have supervisory, examination, and enforcement 3
1084	1084	authority over a State qualified payment stablecoin issuer 4
1085	1085	of such State. 5
1086	1086	(b) A
1087	1087	UTHORITYTOENTERINTOAGREEMENTS 6
1088	1088	W
1089	1089	ITH THEBOARD.—A State payment stablecoin regu-7
1090	1090	lator may enter into a memorandum of understanding 8
1091	1091	with the Board, by mutual agreement, under which the 9
1092	1092	Board may carry out the supervision, examination, and 10
1093	1093	enforcement authority with respect to the State qualified 11
1094	1094	payment stablecoin issuers of such State. 12
1095	1095	(c) S
1096	1096	HARING OFINFORMATION.—A State payment 13
1097	1097	stablecoin regulator and the Board shall share information 14
1098	1098	on an ongoing basis with respect to a State qualified pay-15
1099	1099	ment stablecoin issuer of such State, including a copy of 16
1100	1100	the initial application and any accompanying documents. 17
1101	1101	(d) R
1102	1102	ULEMAKING.—A State payment stablecoin regu-18
1103	1103	lator may issue orders and rules under section 4 applicable 19
1104	1104	to State qualified payment stablecoin issuers to the same 20
1105	1105	extent as the primary Federal payment stablecoin regu-21
1106	1106	lators issue orders and rules under section 4 applicable 22
1107	1107	to permitted payment stablecoin issuers that are not a 23
1108	1108	State qualified payment stablecoin issuers. 24
1109	1109	(e) E
1110	1110	NFORCEMENT AUTHORITY INEXIGENTCIR-25
1111	1111	CUMSTANCES.— 26
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1114	1114	•S 394 IS
1115	1115	(1) BOARD.— 1
1116	1116	(A) I
1117	1117	N GENERAL.—Subject to subpara-2
1118	1118	graph (C), in exigent circumstances, the Board 3
1119	1119	may, after not less than 5 days prior written 4
1120	1120	notice to the applicable State payment 5
1121	1121	stablecoin regulator, take an enforcement action 6
1122	1122	against a State qualified payment stablecoin 7
1123	1123	issuer or an institution-affiliated party of such 8
1124	1124	issuer for violations of this Act that are exigent 9
1125	1125	in nature. 10
1126	1126	(B) R
1127	1127	ULEMAKING.—Not later than the end 11
1128	1128	of the 180-day period beginning on the date of 12
1129	1129	enactment of this Act, the Board shall issue 13
1130	1130	rules to set forth those exigent circumstances in 14
1131	1131	which the Board may act under this paragraph. 15
1132	1132	(C) L
1133	1133	IMITATIONS.—If the Board deter-16
1134	1134	mines that there is reasonable cause to believe 17
1135	1135	that the continuation by a State qualified pay-18
1136	1136	ment stablecoin issuer of any activity con-19
1137	1137	stitutes a serious risk to the financial safety, 20
1138	1138	soundness, or stability of the stablecoin issuer, 21
1139	1139	the Board may impose such restrictions as the 22
1140	1140	Board determines to be necessary to address 23
1141	1141	such risk. Such restrictions shall be issued in 24
1142	1142	the form of a directive, with the effect of a 25
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1145	1145	•S 394 IS
1146	1146	cease and desist order that has become final, to 1
1147	1147	the State qualified payment stablecoin issuer 2
1148	1148	and any of its affiliates, limiting— 3
1149	1149	(i) the payment of dividends by the 4
1150	1150	State qualified payment stablecoin issuer; 5
1151	1151	(ii) transactions between the State 6
1152	1152	qualified payment stablecoin issuer, a hold-7
1153	1153	ing company, and the subsidiaries or affili-8
1154	1154	ates of either the State qualified payment 9
1155	1155	stablecoin issuer or the holding company; 10
1156	1156	and 11
1157	1157	(iii) any activities of the State quali-12
1158	1158	fied payment stablecoin issuer that might 13
1159	1159	create a serious risk that the liabilities of 14
1160	1160	a holding company and the affiliates of the 15
1161	1161	holding company may be imposed on the 16
1162	1162	State qualified payment stablecoin issuer. 17
1163	1163	(D) R
1164	1164	EVIEW OF DIRECTIVE.— 18
1165	1165	(i) A
1166	1166	DMINISTRATIVE REVIEW.— 19
1167	1167	(I) I
1168	1168	N GENERAL.—After a direc-20
1169	1169	tive described in subparagraph (C) is 21
1170	1170	issued, the State qualified payment 22
1171	1171	stablecoin issuer, or any affiliate of 23
1172	1172	the State qualified payment stablecoin 24
1173	1173	issuer subject to the directive, may 25
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1176	1176	•S 394 IS
1177	1177	object and present to the Board, in 1
1178	1178	writing, the reasons why the directive 2
1179	1179	should be modified or rescinded. 3
1180	1180	(II) A
1181	1181	UTOMATIC LAPSE OF DI -4
1182	1182	RECTIVE.—If, after 10 days after the 5
1183	1183	receipt of a response described in sub-6
1184	1184	clause (I), the Board does not affirm, 7
1185	1185	modify, or rescind the directive, the 8
1186	1186	directive shall automatically lapse. 9
1187	1187	(ii) J
1188	1188	UDICIAL REVIEW.— 10
1189	1189	(I) I
1190	1190	N GENERAL.—If the Board 11
1191	1191	affirms or modifies a directive pursu-12
1192	1192	ant to clause (i), any affected party 13
1193	1193	may immediately thereafter petition 14
1194	1194	the United States district court for 15
1195	1195	the district in which the main office of 16
1196	1196	the affected party is located or in the 17
1197	1197	United States District Court for the 18
1198	1198	District of Columbia to stay, modify, 19
1199	1199	terminate, or set aside the directive. 20
1200	1200	(II) R
1201	1201	ELIEF FOR EXTRAOR -21
1202	1202	DINARY CAUSE.—Upon a showing of 22
1203	1203	extraordinary cause, an affected party 23
1204	1204	may petition for relief under subclause 24
1205	1205	(I) without first pursuing or exhaust-25
1206	1206	VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394
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1208	1208	•S 394 IS
1209	1209	ing the administrative remedies under 1
1210	1210	clause (i). 2
1211	1211	(2) C
1212	1212	OMPTROLLER.— 3
1213	1213	(A) I
1214	1214	N GENERAL.—Subject to subpara-4
1215	1215	graph (C), in exigent circumstances, the Comp-5
1216	1216	troller shall, after not less than 5 days prior 6
1217	1217	written notice to the applicable State payment 7
1218	1218	stablecoin regulator, take an enforcement action 8
1219	1219	against a Comptroller-regulated entity or an in-9
1220	1220	stitution-affiliated party of such entity for viola-10
1221	1221	tions of this Act. 11
1222	1222	(B) R
1223	1223	ULEMAKING.—Not later than the end 12
1224	1224	of the 180-day period beginning on the date of 13
1225	1225	enactment of this Act, the Comptroller shall 14
1226	1226	issue rules to set forth those exigent cir-15
1227	1227	cumstances in which the Comptroller may act 16
1228	1228	under this paragraph. 17
1229	1229	(C) L
1230	1230	IMITATIONS.—If the Comptroller de-18
1231	1231	termines that there is reasonable cause to be-19
1232	1232	lieve that the continuation by a Comptroller- 20
1233	1233	regulated entity of any activity constitutes a se-21
1234	1234	rious risk to the financial safety, soundness, or 22
1235	1235	stability of the stablecoin issuer, the Comp-23
1236	1236	troller shall impose such restrictions as the 24
1237	1237	Comptroller determines to be necessary to ad-25
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1240	1240	•S 394 IS
1241	1241	dress such risk. Such restrictions shall be 1
1242	1242	issued in the form of a directive, with the effect 2
1243	1243	of a cease and desist order that has become 3
1244	1244	final, to the State qualified payment stablecoin 4
1245	1245	issuer and any of its affiliates, limiting— 5
1246	1246	(i) the payment of dividends by the 6
1247	1247	Comptroller-regulated entity; 7
1248	1248	(ii) transactions between the Comp-8
1249	1249	troller-regulated entity, a holding company, 9
1250	1250	and the subsidiaries or affiliates of either 10
1251	1251	the Comptroller-regulated entity or the 11
1252	1252	holding company; and 12
1253	1253	(iii) any activities of the Comptroller- 13
1254	1254	regulated entity that might create a seri-14
1255	1255	ous risk that the liabilities of a holding 15
1256	1256	company and the affiliates of the holding 16
1257	1257	company may be imposed on the Comp-17
1258	1258	troller-regulated entity. 18
1259	1259	(D) R
1260	1260	EVIEW OF DIRECTIVE.— 19
1261	1261	(i) A
1262	1262	DMINISTRATIVE REVIEW.— 20
1263	1263	(I) I
1264	1264	N GENERAL.—After a direc-21
1265	1265	tive described in subparagraph (C) is 22
1266	1266	issued, the Comptroller-regulated enti-23
1267	1267	ty, or any affiliate of the Comptroller- 24
1268	1268	regulated entity subject to the direc-25
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1271	1271	•S 394 IS
1272	1272	tive, may object and present to the 1
1273	1273	Comptroller, in writing, the reasons 2
1274	1274	why the directive should be modified 3
1275	1275	or rescinded. 4
1276	1276	(II) A
1277	1277	UTOMATIC LAPSE OF DI -5
1278	1278	RECTIVE.—If, after 10 days after the 6
1279	1279	receipt of a response described in sub-7
1280	1280	clause (I), the Comptroller does not 8
1281	1281	affirm, modify, or rescind the direc-9
1282	1282	tive, the directive shall automatically 10
1283	1283	lapse. 11
1284	1284	(ii) J
1285	1285	UDICIAL REVIEW.— 12
1286	1286	(I) I
1287	1287	N GENERAL.—If the Comp-13
1288	1288	troller affirms or modifies a directive 14
1289	1289	pursuant to clause (i), any affected 15
1290	1290	party may immediately thereafter pe-16
1291	1291	tition the United States district court 17
1292	1292	for the district in which the main of-18
1293	1293	fice of the affected party is located or 19
1294	1294	in the United States District Court 20
1295	1295	for the District of Columbia to stay, 21
1296	1296	modify, terminate, or set aside the di-22
1297	1297	rective. 23
1298	1298	(II) R
1299	1299	ELIEF FOR EXTRAOR -24
1300	1300	DINARY CAUSE.—Upon a showing of 25
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1302	1302	ssavage on LAPJG3WLY3PROD with BILLS 43
1303	1303	•S 394 IS
1304	1304	extraordinary cause, an affected party 1
1305	1305	may petition for relief under subclause 2
1306	1306	(I) without first pursuing or exhaust-3
1307	1307	ing the administrative remedies under 4
1308	1308	clause (i). 5
1309	1309	(f) G
1310	1310	RAMM-LEACH-BLILEYACT.—For purposes of 6
1311	1311	title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 7
1312	1312	et seq.) a State qualified payment stablecoin issuer is 8
1313	1313	deemed a financial institution. 9
1314	1314	(g) E
1315	1315	FFECT ONSTATELAW.— 10
1316	1316	(1) H
1317	1317	OST STATE LAW.—The consumer protec-11
1318	1318	tion laws that generally apply to the operation of a 12
1319	1319	payment stablecoin issuer of the Host State apply to 13
1320	1320	the activities conducted in the Host State by an out- 14
1321	1321	of-State State qualified payment stablecoin issuer to 15
1322	1322	the same extent as those requirements apply to the 16
1323	1323	activities conducted in the Host State by an out-of- 17
1324	1324	State Federal qualified nonbank payment stablecoin 18
1325	1325	issuer. 19
1326	1326	(2) H
1327	1327	OME STATE LAW.—If any Host State law 20
1328	1328	is determined not to apply under paragraph (1), the 21
1329	1329	laws of the Home State of the payment stablecoin 22
1330	1330	issuer shall govern the activities of the payment 23
1331	1331	stablecoin issuer conducted in the Host State. 24
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1334	1334	•S 394 IS
1335	1335	SEC. 8. CUSTOMER PROTECTION. 1
1336	1336	(a) I
1337	1337	NGENERAL.—A person may only engage in the 2
1338	1338	business of providing custodial or safekeeping services for 3
1339	1339	permitted payment stablecoins or private keys of per-4
1340	1340	mitted payment stablecoins, if the person— 5
1341	1341	(1) is subject to— 6
1342	1342	(A) supervision or regulation by a primary 7
1343	1343	Federal payment stablecoin regulator or a pri-8
1344	1344	mary financial regulatory agency described 9
1345	1345	under subparagraph (B) or (C) of section 2(12) 10
1346	1346	of the Dodd-Frank Wall Street Reform and 11
1347	1347	Consumer Protection Act (12 U.S.C. 12
1348	1348	5301(12)); or 13
1349	1349	(B) supervision by a State bank super-14
1350	1350	visor, as defined under section 3 of the Federal 15
1351	1351	Deposit Insurance Act (12 U.S.C. 1813) or a 16
1352	1352	State credit union supervisor, as defined under 17
1353	1353	section 6003 of the Anti-Money Laundering Act 18
1354	1354	of 2020, and such state bank supervisor or 19
1355	1355	state credit union supervisor makes available to 20
1356	1356	the Board such information as the Board deter-21
1357	1357	mines necessary and relevant to the categories 22
1358	1358	of information under subsection (d); and 23
1359	1359	(2) complies with the segregation requirements 24
1360	1360	under subsection (b), unless such person complies 25
1361	1361	with similar requirements as required by a primary 26
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1364	1364	•S 394 IS
1365	1365	Federal payment stablecoin regulator, the Securities 1
1366	1366	and Exchange Commission, or the Commodity Fu-2
1367	1367	tures Trading Commission. 3
1368	1368	(b) S
1369	1369	EGREGATION REQUIREMENT.—A person de-4
1370	1370	scribed in subsection (a) shall— 5
1371	1371	(1) treat and deal with the payment stablecoins, 6
1372	1372	private keys, cash, and other property of a person 7
1373	1373	for whom or on whose behalf the person receives, ac-8
1374	1374	quires, or holds payment stablecoins, private keys, 9
1375	1375	cash, and other property (hereinafter in this section 10
1376	1376	referred to as the ‘‘customer’’) as belonging to such 11
1377	1377	customer; and 12
1378	1378	(2) take such steps as are appropriate to pro-13
1379	1379	tect the payment stablecoins, private keys, cash, and 14
1380	1380	other property of a customer from the claims of 15
1381	1381	creditors of the person. 16
1382	1382	(c) C
1383	1383	OMMINGLINGPROHIBITED.— 17
1384	1384	(1) I
1385	1385	N GENERAL.—Payment stablecoins, cash, 18
1386	1386	and other property of a customer shall be separately 19
1387	1387	accounted for by a person described in subsection 20
1388	1388	(a) and shall not be commingled with the funds of 21
1389	1389	the person. 22
1390	1390	(2) E
1391	1391	XCEPTION.—Notwithstanding paragraph 23
1392	1392	(1)— 24
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1395	1395	•S 394 IS
1396	1396	(A) the payment stablecoins, cash, and 1
1397	1397	other property of a customer may, for conven-2
1398	1398	ience, be commingled and deposited in an omni-3
1399	1399	bus account holding the payment stablecoins, 4
1400	1400	cash, and other property of more than 1 cus-5
1401	1401	tomer at an insured depository institution or 6
1402	1402	trust company; 7
1403	1403	(B) such share of the payment stablecoins, 8
1404	1404	cash, and other property of the customer that 9
1405	1405	shall be necessary to transfer, adjust, or settle 10
1406	1406	a transaction or transfer of assets may be with-11
1407	1407	drawn and applied to such purposes, including 12
1408	1408	the payment of commissions, taxes, storage, 13
1409	1409	and other charges lawfully accruing in connec-14
1410	1410	tion with the provision of services by a person 15
1411	1411	described in subsection (a); and 16
1412	1412	(C) in accordance with such terms and 17
1413	1413	conditions as the Board may prescribe by rule, 18
1414	1414	regulation, or order, any customer payment 19
1415	1415	stablecoin, cash, and other property described 20
1416	1416	in this subsection may be commingled and de-21
1417	1417	posited in customer accounts with payment 22
1418	1418	stablecoins, cash, and other property received 23
1419	1419	by the person and required by the Board to be 24
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1423	1423	separately accounted for, treated, and dealt 1
1424	1424	with as belonging to customers. 2
1425	1425	(d) R
1426	1426	EGULATORY INFORMATION.—A person de-3
1427	1427	scribed under subsection (a) shall submit to the applicable 4
1428	1428	primary regulator information concerning the person’s 5
1429	1429	business operations and processes to protect customer as-6
1430	1430	sets, in such form and manner as the primary regulator 7
1431	1431	shall determine. 8
1432	1432	(e) E
1433	1433	XCLUSION.—The requirements of this section 9
1434	1434	shall not apply to any person solely on the basis that such 10
1435	1435	person engages in the business of providing hardware or 11
1436	1436	software to facilitate a customer’s own custody or safe-12
1437	1437	keeping of the customer’s payment stablecoins or private 13
1438	1438	keys. 14
1439	1439	SEC. 9. TREATMENT OF INSOLVENT PAYMENT STABLECOIN 15
1440	1440	ISSUERS. 16
1441	1441	(a) I
1442	1442	NGENERAL.—In any insolvency proceeding, in-17
1443	1443	cluding any proceeding under title 11, United States Code, 18
1444	1444	or any insolvency proceeding by a primary Federal pay-19
1445	1445	ment stablecoin regulator or a State banking supervisor 20
1446	1446	with respect to a payment stablecoin issuer, the claim of 21
1447	1447	a person holding payment stablecoins issued by the pay-22
1448	1448	ment stablecoin issuer shall have priority over all other 23
1449	1449	claims against the payment stablecoin issuer. 24
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1453	1453	(b) PRIORITY INBANKRUPTCYPROCEEDINGS.—Sec-1
1454	1454	tion 507 of title 11, United States Code, is amended— 2
1455	1455	(1) in subsection (a), by striking ‘‘The fol-3
1456	1456	lowing’’ and inserting ‘‘Subject to subsection (e), the 4
1457	1457	following’’; and 5
1458	1458	(2) by adding at the end the following: 6
1459	1459	‘‘(e) Notwithstanding subsection (a), any claim of a 7
1460	1460	person holding payment stablecoins, as defined in section 8
1461	1461	2 of the Guiding and Establishing National Innovation for 9
1462	1462	U.S. Stablecoins of 2025, issued by a debtor shall have 10
1463	1463	first priority over any other claim against the debtor under 11
1464	1464	this title.’’. 12
1465	1465	(c) D
1466	1466	EBTOR.—A payment stablecoin issuer that is 13
1467	1467	not a depository institution (as defined in section 3 of the 14
1468	1468	Federal Deposit Insurance Act (12 U.S.C. 1813)) may be 15
1469	1469	considered a debtor under title 11, United States Code. 16
1470	1470	SEC. 10. INTEROPERABILITY STANDARDS. 17
1471	1471	The primary Federal payment stablecoin regulators, 18
1472	1472	in consultation with the National Institute of Standards 19
1473	1473	and Technology, other relevant standard setting organiza-20
1474	1474	tions, and State governments, shall assess and, if nec-21
1475	1475	essary, may, pursuant to section 553 of title 5 and in a 22
1476	1476	manner consistent with the National Technology Transfer 23
1477	1477	and Advancement Act of 1995 (Public Law 104–113), 24
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1481	1481	prescribe standards for payment stablecoin issuers to pro-1
1482	1482	mote compatibility and interoperability. 2
1483	1483	SEC. 11. STUDY ON ENDOGENOUSLY COLLATERALIZED 3
1484	1484	STABLECOINS. 4
1485	1485	(a) S
1486	1486	TUDY BYTREASURY.— 5
1487	1487	(1) S
1488	1488	TUDY.—The Secretary of the Treasury, in 6
1489	1489	consultation with the Board, the Comptroller, the 7
1490	1490	Corporation, and the Securities and Exchange Com-8
1491	1491	mission, shall carry out a study of endogenously 9
1492	1492	collateralized stablecoins. 10
1493	1493	(2) R
1494	1494	EPORT.—Not later than 365 days after 11
1495	1495	the date of the enactment of this Act, the Secretary 12
1496	1496	shall provide to the Committee on Financial Services 13
1497	1497	of the House of Representatives and the Committee 14
1498	1498	on Banking, Housing, and Urban Affairs of the Sen-15
1499	1499	ate a report that contains all findings made in car-16
1500	1500	rying out the study under paragraph (1), including 17
1501	1501	an analysis of— 18
1502	1502	(A) the categories of non-payment 19
1503	1503	stablecoins, including the benefits and risks of 20
1504	1504	technological design features; 21
1505	1505	(B) the participants in non-payment 22
1506	1506	stablecoin arrangements; 23
1507	1507	(C) utilization and potential utilization of 24
1508	1508	non-payment stablecoins; 25
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1512	1512	(D) nature of reserve compositions; 1
1513	1513	(E) types of algorithms being employed; 2
1514	1514	(F) governance structure, including aspects 3
1515	1515	of decentralization; 4
1516	1516	(G) nature of public promotion and adver-5
1517	1517	tising; and 6
1518	1518	(H) clarity and availability of consumer 7
1519	1519	notices disclosures. 8
1520	1520	(b) E
1521	1521	NDOGENOUSLY COLLATERALIZED STABLECOIN 9
1522	1522	D
1523	1523	EFINED.—In this section, the term ‘‘endogenously 10
1524	1524	collateralized stablecoin’’ means any digital asset— 11
1525	1525	(1) in which its originator has represented will 12
1526	1526	be converted, redeemed, or repurchased for a fixed 13
1527	1527	amount of monetary value; and 14
1528	1528	(2) that relies solely on the value of another 15
1529	1529	digital asset created or maintained by the same 16
1530	1530	originator to maintain the fixed price. 17
1531	1531	SEC. 12. REPORTS. 18
1532	1532	(a) R
1533	1533	ULEMAKINGSTATUS.—Not later than 6 months 19
1534	1534	after the date of enactment of this Act, the primary Fed-20
1535	1535	eral payment stablecoin regulators shall provide a status 21
1536	1536	update on the development of the rulemaking under this 22
1537	1537	Act to the Committee on Financial Services of the House 23
1538	1538	of Representatives and the Committee on Banking, Hous-24
1539	1539	ing, and Urban Affairs of the Senate. 25
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1543	1543	(b) ANNUALREPORTINGREQUIREMENT.—Begin-1
1544	1544	ning on the date that is 1 year after the date of enactment 2
1545	1545	of this Act, and annually thereafter, the Board and Comp-3
1546	1546	troller shall submit to the Committee on Banking, Hous-4
1547	1547	ing, and Urban Affairs of the Senate, the Committee on 5
1548	1548	Financial Services of the House of Representatives, and 6
1549	1549	the Director of the Office of Financial Research a report 7
1550	1550	on the status of the payment stablecoin industry, includ-8
1551	1551	ing— 9
1552	1552	(1) an overview of trends in payment stablecoin 10
1553	1553	activities; 11
1554	1554	(2) a summary of the number of applications 12
1555	1555	for permitted payment stablecoin issuer under sec-13
1556	1556	tion 5, including aggregate approvals and rejections 14
1557	1557	of applications; and 15
1558	1558	(3) a description of the potential financial sta-16
1559	1559	bility risks posed to the safety and soundness of the 17
1560	1560	broader financial system by payment stablecoin ac-18
1561	1561	tivities. 19
1562	1562	(c) FSOC R
1563	1563	EPORT.—The Financial Stability Over-20
1564	1564	sight Council shall incorporate the findings in the report 21
1565	1565	under subsection (b) into the annual report of the Council 22
1566	1566	required under section 112(a)(2)(N) of the Dodd-Frank 23
1567	1567	Wall Street Reform and Consumer Protection Act (12 24
1568	1568	U.S.C. 5322). 25
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1572	1572	SEC. 13. AUTHORITY OF BANKING INSTITUTIONS. 1
1573	1573	(a) R
1574	1574	ULE OFCONSTRUCTION.—Nothing in this Act 2
1575	1575	may be construed to limit the authority of a depository 3
1576	1576	institution, Federal credit union, State credit union, or 4
1577	1577	trust company to engage in activities permissible pursuant 5
1578	1578	to applicable State and Federal law, including— 6
1579	1579	(1) accepting or receiving deposits and issuing 7
1580	1580	digital assets that represent deposits; 8
1581	1581	(2) utilizing a distributed ledger for the books 9
1582	1582	and records of the entity and to affect intrabank 10
1583	1583	transfers; and 11
1584	1584	(3) providing custodial services for payment 12
1585	1585	stablecoins, private keys of payment stablecoins, or 13
1586	1586	reserves backing payment stablecoins. 14
1587	1587	(b) T
1588	1588	REATMENT OFCUSTODYACTIVITIES.—The ap-15
1589	1589	propriate Federal banking agency (as defined under sec-16
1590	1590	tion 3 of the Federal Deposit Insurance Act (12 U.S.C. 17
1591	1591	1813)), the National Credit Union Administration (in the 18
1592	1592	case of a credit union), and the Securities and Exchange 19
1593	1593	Commission may not require a depository institution, na-20
1594	1594	tional bank, Federal credit union, State credit union, or 21
1595	1595	trust company, or any affiliate thereof— 22
1596	1596	(1) to include assets held in custody as a liabil-23
1597	1597	ity on any financial statement or balance sheet, in-24
1598	1598	cluding payment stablecoin custody or safekeeping 25
1599	1599	activities; 26
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1603	1603	(2) to hold additional regulatory capital against 1
1604	1604	assets in custody or safekeeping, except as necessary 2
1605	1605	to mitigate against operational risks inherent with 3
1606	1606	the custody or safekeeping services, as determined 4
1607	1607	by— 5
1608	1608	(A) the appropriate Federal banking agen-6
1609	1609	cy; 7
1610	1610	(B) the National Credit Union Administra-8
1611	1611	tion (in the case of a credit union); 9
1612	1612	(C) a State bank supervisor (as defined 10
1613	1613	under section 3 of the Federal Deposit Insur-11
1614	1614	ance Act (12 U.S.C. 1813)); or 12
1615	1615	(D) a State credit union supervisor (as de-13
1616	1616	fined under section 6003 of the Anti-Money 14
1617	1617	Laundering Act of 2020); 15
1618	1618	(3) to recognize a liability for any obligations 16
1619	1619	related to activities or services performed for digital 17
1620	1620	assets that the entity does not own if that liability 18
1621	1621	would exceed the expense recognized in the income 19
1622	1622	statement as a result of the corresponding obliga-20
1623	1623	tion. 21
1624	1624	(c) D
1625	1625	EFINITIONS.—In this section: 22
1626	1626	(1) D
1627	1627	EPOSITORY INSTITUTION.—The term ‘‘de-23
1628	1628	pository institution’’ has the meaning given that 24
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1632	1632	term under section 3 of the Federal Deposit Insur-1
1633	1633	ance Act (12 U.S.C. 1813). 2
1634	1634	(2) C
1635	1635	REDIT UNION TERMS .—The terms ‘‘Fed-3
1636	1636	eral credit union’’ and ‘‘State credit union’’ have the 4
1637	1637	meaning given those terms, respectively, under sec-5
1638	1638	tion 101 of the Federal Credit Union Act. 6
1639	1639	SEC. 14. AMENDMENTS TO CLARIFY THAT PAYMENT 7
1640	1640	STABLECOINS ARE NOT SECURITIES OR COM-8
1641	1641	MODITIES. 9
1642	1642	(a) I
1643	1643	NVESTMENTADVISERSACT OF1940.—Section 10
1644	1644	202(a)(18) of the Investment Advisers Act of 1940 (15 11
1645	1645	U.S.C. 80b–2(a)(18)) is amended by adding at the end 12
1646	1646	the following: ‘‘The term ‘security’ does not include a pay-13
1647	1647	ment stablecoin issued by a permitted payment stablecoin 14
1648	1648	issuer, as such terms are defined, respectively, in section 15
1649	1649	2 of the Clarity for Payment Stablecoins Act of 2023.’’. 16
1650	1650	(b) I
1651	1651	NVESTMENTCOMPANYACT OF1940.—Section 17
1652	1652	2(a)(36) of the Investment Company Act of 1940 (15 18
1653	1653	U.S.C. 80a–2(a)(36)) is amended by adding at the end 19
1654	1654	the following: ‘‘The term ‘security’ does not include a pay-20
1655	1655	ment stablecoin issued by a permitted payment stablecoin 21
1656	1656	issuer, as such terms are defined, respectively, in section 22
1657	1657	2 of the Clarity for Payment Stablecoins Act of 2023.’’. 23
1658	1658	(c) S
1659	1659	ECURITIESACT OF1933.—Section 2(a)(1) of 24
1660	1660	the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) is 25
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1664	1664	amended by adding at the end the following: ‘‘The term 1
1665	1665	‘security’ does not include a payment stablecoin issued by 2
1666	1666	a permitted payment stablecoin issuer, as such terms are 3
1667	1667	defined, respectively, in section 2 of the Clarity for Pay-4
1668	1668	ment Stablecoins Act of 2023.’’. 5
1669	1669	(d) S
1670	1670	ECURITIESEXCHANGEACT OF1934.—Section 6
1671	1671	3(a)(10) of the Securities Exchange Act of 1934 (15 7
1672	1672	U.S.C. 78c(a)(10)) is amended by adding at the end the 8
1673	1673	following: ‘‘The term ‘security’ does not include a payment 9
1674	1674	stablecoin issued by a permitted payment stablecoin 10
1675	1675	issuer, as such terms are defined, respectively, in section 11
1676	1676	2 of the Clarity for Payment Stablecoins Act of 2023.’’. 12
1677	1677	(e) S
1678	1678	ECURITIESINVESTORPROTECTIONACT OF 13
1679	1679	1970.—Section 16(14) of the Securities Investor Protec-14
1680	1680	tion Act of 1970 (15 U.S.C. 78lll(14)) is amended by add-15
1681	1681	ing at the end the following: ‘‘The term ‘security’ does 16
1682	1682	not include a payment stablecoin issued by a permitted 17
1683	1683	payment stablecoin issuer, as such terms are defined, re-18
1684	1684	spectively, in section 2 of the Clarity for Payment 19
1685	1685	Stablecoins Act of 2023.’’. 20
1686	1686	SEC. 15. RECIPROCITY FOR STABLECOINS ISSUED IN OVER-21
1687	1687	SEAS JURISDICTIONS. 22
1688	1688	The Federal Reserve, in collaboration with the Sec-23
1689	1689	retary of the Treasury, shall create and implement recip-24
1690	1690	rocal arrangements or other bilateral agreements between 25
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1694	1694	the United States and jurisdictions with substantially 1
1695	1695	similar payment stablecoin regulatory regimes to facilitate 2
1696	1696	international transactions and interoperability with United 3
1697	1697	States dollar-denominated stablecoins issued overseas. 4
1698	1698	SEC. 16. EFFECTIVE DATE. 5
1699	1699	(a) I
1700	1700	NGENERAL.—This Act shall take effect on the 6
1701	1701	earlier of— 7
1702	1702	(1) 18 months after the date of enactment of 8
1703	1703	this Act; or 9
1704	1704	(2) the date that is 120 days after the date on 10
1705	1705	which the primary Federal payment stablecoin regu-11
1706	1706	lators issue any final regulations implementing this 12
1707	1707	Act. 13
1708	1708	(b) N
1709	1709	OTICE TOCONGRESS.—The primary Federal 14
1710	1710	payment stablecoin regulators shall notify Congress upon 15
1711	1711	beginning to process applications under this Act. 16
1712	1712	(c) S
1713	1713	AFEHARBOR FORPENDINGAPPLICATIONS.— 17
1714	1714	The primary Federal payment stablecoin regulators may 18
1715	1715	waive the application of the requirements of this Act for 19
1716	1716	a period not to exceed 12 months beginning on the effec-20
1717	1717	tive date described under subsection (a), with respect to— 21
1718	1718	(1) a subsidiary of an insured depository insti-22
1719	1719	tution, if the insured depository institution has an 23
1720	1720	application pending for the subsidiary to become a 24
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1724	1724	permitted payment stablecoin issuer on that effective 1
1725	1725	date; or 2
1726	1726	(2) a nonbank entity with an application pend-3
1727	1727	ing to become a Comptroller-regulated entity on that 4
1728	1728	effective date. 5
1729	1729	Æ
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