Stablecoin Transparency of Reserves and Uniform Safe Transactions Act of 2022 or the Stablecoin TRUST Act of 2022
This bill establishes a regulatory framework for payment stablecoins (digital assets which an issuer must directly convert to fiat currency). Specifically, the bill only allows the following entities to issue stablecoins
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 5340 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
2d Session
S. 5340
To provide a regulatory framework and consumer protections for the
issuance of payment stablecoins, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 21, 2022
Mr. Toomey introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To provide a regulatory framework and consumer protections for the
issuance of payment stablecoins, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Stablecoin Transparency of Reserves
and Uniform Safe Transactions Act of 2022'' or the ``Stablecoin TRUST
Act of 2022''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Appropriate federal banking agency.--The term
``appropriate Federal banking agency''--
(A) has the meaning given the term in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813); and
(B) includes the National Credit Union
Administration.
(2) Deposit.--The term ``deposit'' has the meaning given
the term in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813).
(3) Digital asset.--The term ``digital asset'' means any
digital representation of value that is recorded on a
cryptographically secured distributed ledger.
(4) Insured depository institution.--The term ``insured
depository institution'' has the meaning given the term in
section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813).
(5) Level 1 high-quality liquid asset.--The term ``level 1
high-quality liquid asset'' means an asset described in section
249.20(a) of title 12, Code of Federal Regulations.
(6) Money transmitting business.--The term ``money
transmitting business'' has the meaning given the term in
section 5330 of title 31, United States Code.
(7) National limited payment stablecoin issuer.--The term
``national limited payment stablecoin issuer'' means a person
that--
(A) issues payment stablecoins; and
(B) receives a license from, and becomes subject to
the regulatory standards established by, the Office of
the Comptroller of the Currency under section 5244A of
the Revised Statutes, as added by section 6 of this
Act.
(8) Non-depository trust company.--The term ``non-
depository trust company'' means a trust company that does not
receive deposits other than trust funds.
(9) Payment stablecoin.--The term ``payment stablecoin''
means a digital asset that--
(A) is designed to maintain a stable value relative
to a fiat currency or currencies;
(B) is convertible directly to fiat currency by the
issuer;
(C) is designed to be widely used as a medium of
exchange;
(D) is issued by a centralized entity;
(E) does not inherently pay interest to the holder;
and
(F) is recorded on a public distributed ledger.
(10) Payment stablecoin issuer.--The term ``payment
stablecoin issuer'' means a person that issues a payment
stablecoin under section 3(b) of this Act.
(11) Registered public accounting firm.--The term
``registered public accounting firm'' has the meaning given the
term in section 2(a) of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7201(a)).
(12) State banking supervisor.--The term ``State banking
supervisor'' means the commissioner, superintendent, or similar
official of a State who is responsible for the chartering,
regulation, and examination of depository institutions, trust
companies, money transmitting businesses, and similar entities
within the State.
SEC. 3. ISSUANCE OF PAYMENT STABLECOINS.
(a) In General.--Except as provided in subsection (b), it shall be
unlawful for any person to issue a payment stablecoin.
(b) Exceptions.--Subsection (a) shall not apply to--
(1) a money transmitting business, a non-depository trust
company, or any other person that is authorized by a State
banking supervisor to issue payment stablecoins;
(2) a national limited payment stablecoin issuer;
(3) a depository institution, as defined in section
19(b)(1) of the Federal Reserve Act (12 U.S.C 461(b)(1)); or
(4) a national trust bank.
(c) Joint Supervision.--
(1) In general.--If a person is authorized by the
appropriate Federal banking agency and the applicable State
banking supervisor to issue payment stablecoins, the person
shall be jointly supervised by the appropriate Federal banking
agency and the State banking supervisor.
(2) Depository institutions.--A depository institution
described in subsection (b)(3)--
(A) may become a member bank of the Federal Reserve
System or obtain deposit or share insurance; and
(B) shall not be required to satisfy subparagraph
(A) as a condition to operate.
(d) Injunctive Relief.--The Comptroller of the Currency may bring
an action in the appropriate district court of the United States or the
court of any territory of the United States for the enforcement of this
section and such courts shall have jurisdiction and power to order and
require compliance herewith, including through injunctive relief.
(e) Federal Reserve Accounts and Services.--Each Federal Reserve
bank shall, upon application from a national limited payment stablecoin
issuer or a payment stablecoin issuer that only engages in the business
of issuing and redeeming payment stablecoins and engaging in activities
incidental to such issuance or redemption--
(1) establish and maintain an account for the payment
stablecoin issuer; and
(2) provide to the payment stablecoin issuer--
(A) the services listed in section 11A(b) of the
Federal Reserve Act (12 U.S.C. 248a(b)); and
(B) a deposit account in accordance with the first
undesignated paragraph of section 13 of the Federal
Reserve Act (12 U.S.C. 342).
SEC. 4. DISCLOSURES, REDEMPTION POLICIES, ATTESTATIONS, AND PERMISSIBLE
ASSETS FOR PAYMENT STABLECOIN ISSUERS.
(a) In General.--Any person described in section 3(b) that issues a
payment stablecoin shall--
(1) publicly disclose the assets backing the payment
stablecoin on a monthly basis;
(2) adopt and publicly disclose policies for redeeming the
payment stablecoin, including whether redemption requests will
be met on demand or with a time lag;
(3) undergo quarterly attestations by a registered public
accounting firm and publicly disclose the results; and
(4) attest that the assets backing the payment stablecoin
do not materially diverge from those disclosed.
(b) Filing of Disclosures.--Disclosures described in subsection (a)
shall--
(1) be filed with the Secretary of the Treasury; and
(2) made publicly available on a Department of the Treasury
website on a form which shall include an executive summary not
longer than 1 page in length.
(c) Rulemaking.--The Secretary of the Treasury may promulgate
regulations under section 553 of title 5, United States Code, to
develop a template form for ensuring that the disclosures described in
subsection (a) are complete, clear, and understandable.
(d) Permissible Assets.--Payment stablecoins issued by a payment
stablecoin issuer shall be backed by assets--
(1) with a market value equal to not less than 100 percent
of the par value of the payment stablecoins outstanding; and
(2) that are--
(A) level 1 high-quality liquid assets, denominated
in United States dollars;
(B) United States coins and currency, as described
in section 5103 of title 31, United States Code; and
(C) any deposit with an insured depository
institution.
SEC. 5. EQUAL TREATMENT FOR DEPOSITORY INSTITUTIONS.
(a) National Banking Associations.--Section 5136 of the Revised
Statutes (12 U.S.C. 24) is amended by adding at the end the following:
``Twelfth. To issue payment stablecoins.''.
(b) Segregation.--A depository institution, as defined in section
19(b)(1) of the Federal Reserve Act (12 U.S.C. 461(b)(1))--
(1) may segregate into a separate legal entity the issuance
of payment stablecoins and management of such payment
stablecoin reserve assets from other activities; and
(2) that elects to segregate under paragraph (1), or which
only issues payment stablecoins or manages payment stablecoin
reserve assets--
(A) shall be subject to the same tailored
regulatory standards as a national limited payment
stablecoin issuer for that activity; and
(B) shall remain subject to regulation,
examination, and supervision by the same regulator as
the depository institution.
SEC. 6. NATIONAL LIMITED PAYMENT STABLECOIN ISSUERS.
The Revised Statutes are amended by inserting after section 5244
(12 U.S.C. 43) the following:
``SEC. 5244A. NATIONAL LIMITED PAYMENT STABLECOIN ISSUERS.
``(a) Application.--An entity may submit to the Comptroller of the
Currency an application for a national limited payment stablecoin
issuer license.
``(b) Authority.--A license for a national limited payment
stablecoin issuer shall authorize the national limited payment
stablecoin issuer to issue and redeem payment stablecoins and engage in
any activities incidental to such issuance or redemption, including
making a market in such payment stablecoin and holding and managing the
reserve assets of such payment stablecoins.
``(c) Limitation on Other Activities.--A national limited payment
stablecoin issuer shall not engage in any activities, such as making
loans or other extensions of credit, other than those authorized by
subsection (b).
``(d) Review.--
``(1) In general.--Except as provided in paragraph (2), the
Comptroller of the Currency shall grant applications for
national limited payment stablecoin issuer licenses not later
than 90 days after the date on which the application is
submitted.
``(2) Considerations.--
``(A) In general.--The Comptroller of the Currency
may deny an application for a license under this
subsection only if the Comptroller determines that the
activities of the applicant would be unsafe or unsound
based on the factors described in subparagraph (B).
``(B) Factors.--The factors described in this
subparagraph are as follows:
``(i) The financial condition and business
plan of the applicant.
``(ii) The general character and fitness of
the management of the applicant.
``(iii) The risks presented and the
potential benefits that could be delivered to
consumers.
``(3) Default.--If the Comptroller of the Currency fails to
approve or deny an application before the expiration of the 90-
day period under paragraph (1), the application shall be deemed
to have been approved.
``(4) Response.--If the Comptroller of the Currency denies
an application under this section, the Comptroller shall
respond to the applicant with a detailed written explanation
for such denial.
``(e) Corporate Governance.--A national limited payment stablecoin
issuer may elect, by designating in the bylaws of the issuer, to follow
the corporate governance provisions of--
``(1) the law of the State in which the issuer is
incorporated;
``(2) the law of the State in which the main office of the
issuer is located;
``(3) chapter 1 of title 8 of the Delaware Code; or
``(4) the Model Business Corporation Act.
``(f) Supervision.--A license for a national limited payment
stablecoin issuer shall permit supervision, examination, and regulation
by the Comptroller of the Currency of only the legal entity that issues
payment stablecoins.
``(g) Regulations.--The Office of the Comptroller of the Currency
may establish only the following regulations, in accordance with
section 553 of title 5, United States Code, for national limited
payment stablecoin issuers:
``(1) Capital requirements which shall not exceed 6 months
of operating expenses.
``(2) Liquidity requirements.
``(3) Governance and risk-management requirements tailored
to the business model and risk profile of national limited
payment stablecoin issuers.
``(h) Enforcement.--If the Comptroller of the Currency determines
that a national limited payment stablecoin issuer has violated the
requirements of this subsection or any other applicable law (including
regulations), the Comptroller of the Currency may issue a temporary
order requiring the national limited payment stablecoin issuers to--
``(1) cease and desist from any such violation; and
``(2) take affirmative action to prevent or remedy such
violation.''.
SEC. 7. EXEMPTION FROM SECURITIES REQUIREMENTS.
(a) Securities.--
(1) Securities act of 1933.--Section 2(a)(1) of the
Securities Act of 1933 (15 U.S.C. 77b(a)(1)) is amended by
adding at the end the following: ``The term `security' does not
include a payment stablecoin, as that term is defined in
section 2 of the Stablecoin TRUST Act of 2022.''.
(2) Securities exchange act of 1934.--Section 3(a)(10) of
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is
amended by adding before the period at the end the following:
``, and shall also not include a payment stablecoin, as that
term is defined in section 2 of the Stablecoin TRUST Act of
2022''.
(3) Investment company act of 1940.--Section 2(a)(36) of
the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(36)) is
amended by adding at the end the following: ``The term
`security' does not include a payment stablecoin, as that term
is defined in section 2 of the Stablecoin TRUST Act of 2022.''.
(4) Investment advisers act of 1940.--Section 202(a)(18) of
the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(18)) is
amended by adding at the end the following: ``The term
`security' does not include a payment stablecoin, as that term
is defined in section 2 of the Stablecoin TRUST Act of 2022.''.
(b) Investment Company.--Section 3(c) of the Investment Company Act
of 1940 (15 U.S.C. 80a-3(c)) is amended by adding at the end the
following:
``(15) Any payment stablecoin issuer, as that term is
defined in section 2 of the Stablecoin TRUST Act of 2022.''.
(c) Investment Adviser.--Section 202(a)(11) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b-2(a)(11)) is amended--
(1) by striking ``;; (G)'' and inserting ``; (G)'';
(2) by striking ``or (H)'' and inserting ``(H)''; and
(3) by inserting ``; or (I) any payment stablecoin issuer,
defined in section 2 of the Stablecoin TRUST Act of 2022''
before the period at the end.
SEC. 8. PRIVACY PROTECTIONS FOR DIGITAL ASSETS AND PAYMENT STABLECOIN
USERS.
(a) Exemption From Reporting Requirements.--The Secretary of the
Treasury may not collect or mandate the collection of nonpublic
information about digital asset transactions unless the information
is--
(1) particularly described in a search warrant granted by a
judge upon a finding of probable cause that 1 or more of the
participants to the transaction committed or is committing a
crime; or
(2) voluntarily provided by a customer of a financial
institution, business, or other third party and held for a
legitimate business purpose by that financial institution,
business, or third party.
(b) Applicability of Other Laws.--A national limited payment
stablecoin issuer shall be subject to title V of the Gramm-Leach-Bliley
Act (15 U.S.C. 6801 et seq.).
(c) Rule of Construction.--Nothing in this section may be construed
to limit--
(1) any duty to report taxable income;
(2) any duty to disclose foreign account ownership; or
(3) the ability of the Internal Revenue Service to conduct
investigations pursuant to a warrant or other regular legal
process.
SEC. 9. TREATMENT OF INSOLVENT PAYMENT STABLECOIN ISSUERS.
In any insolvency proceeding, including any proceeding under title
11, United States Code, or any insolvency proceeding by an appropriate
Federal banking agency or a State banking supervisor with respect to a
payment stablecoin issuer, a claim of a person holding payment
stablecoins issued by the payment stablecoin issuer shall have priority
over all other claims against the payment stablecoin issuer.
SEC. 10. RULES OF CONSTRUCTION.
(a) Applicability to Other Instruments.--Nothing in sections 2
through 6 may be construed as restricting activities involving
instruments other than payment stablecoins.
(b) Relation to State and Federal Authority.--Nothing in this Act
may be construed as--
(1) preventing a State banking supervisor from imposing
additional or stricter regulatory standards on a person
licensed by the State banking supervisor to issue payment
stablecoins;
(2) superseding any requirement of State law relating to
money transmitting businesses operating in that State, other
than for payment stablecoin issuers; or
(3) limiting the authority of an insured depository
institution to engage in activities permissible pursuant to
applicable State and Federal law, including accepting or
receiving deposits and issuing digital assets that represent
deposits.
<all>
Introduced in Senate
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
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