Guiding and Establishing National Innovation for U.S. Stablecoins Act or the GENIUS Act
This bill establishes a regulatory framework for payment stablecoins (digital assets which an issuer must redeem for a fixed value).
Under the bill, only permitted issuers may issue a payment stablecoin for use by U.S. persons, subject to certain exceptions and safe harbors. Permitted issuers must be a subsidiary of an insured depository institution, a federal-qualified nonbank payment stablecoin issuer, or a state-qualified payment stablecoin issuer. Permitted issuers must be regulated by the appropriate federal or state regulator. Permitted issuers may choose federal or state regulation; however, state regulation is limited to those with a stablecoin issuance of $10 billion or less.
Permitted issuers must maintain reserves backing the stablecoin on a one-to-one basis using U.S. currency or other similarly liquid assets, as specified. Permitted issuers must also publicly disclose their redemption policy and publish monthly the details of their reserves.
The bill specifies requirements for (1) reusing reserves; (2) providing safekeeping services for stablecoins; and (3) supervisory, examination, and enforcement authority over federal-qualified issuers.
The bill allows foreign issuers of stablecoins to offer, sell, or make available in the United States stablecoins using digital asset service providers, subject to requirements, including a determination by the Department of Treasury that they are subject to comparable foreign regulations.
Under the bill, permitted payment stablecoins are not considered securities under securities law. However, permitted issuers are subject to the Bank Secrecy Act for anti-money laundering and related purposes.
[119th Congress Public Law 27]
[From the U.S. Government Publishing Office]
[[Page 139 STAT. 419]]
Public Law 119-27
119th Congress
An Act
To provide for the regulation of payment stablecoins, and for other
purposes. <<NOTE: July 18, 2025 - [S. 1582]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: Guiding and
Establishing National Innovation for U.S. Stablecoins Act.>>
SECTION 1. <<NOTE: 12 USC 5901 note.>> SHORT TITLE.
This Act may be cited as the ``Guiding and Establishing National
Innovation for U.S. Stablecoins Act'' or the ``GENIUS Act''.
SEC. 2. <<NOTE: 12 USC 5901.>> DEFINITIONS.
In this Act:
(1) Appropriate federal banking agency.--The term
``appropriate Federal banking agency'' has the meaning given
that term in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813).
(2) Bank secrecy act.--The term ``Bank Secrecy Act'' means--
(A) section 21 of the Federal Deposit Insurance Act
(12 U.S.C. 1829b);
(B) chapter 2 of title I of Public Law 91-508 (12
U.S.C. 1951 et seq.); and
(C) subchapter II of chapter 53 of title 31, United
States Code.
(3) Board.--The term ``Board'' means the Board of Governors
of the Federal Reserve System.
(4) Comptroller.--The term ``Comptroller'' means the Office
of the Comptroller of the Currency.
(5) Corporation.--The term ``Corporation'' means the Federal
Deposit Insurance Corporation.
(6) Digital asset.--The term ``digital asset'' means any
digital representation of value that is recorded on a
cryptographically secured distributed ledger.
(7) Digital asset service provider.--The term ``digital
asset service provider''--
(A) means a person that, for compensation or profit,
engages in the business in the United States (including
on behalf of customers or users in the United States)
of--
(i) exchanging digital assets for monetary
value;
(ii) exchanging digital assets for other
digital assets;
(iii) transferring digital assets to a third
party;
(iv) acting as a digital asset custodian; or
(v) participating in financial services
relating to digital asset issuance; and
[[Page 139 STAT. 420]]
(B) does not include--
(i) a distributed ledger protocol;
(ii) developing, operating, or engaging in the
business of developing distributed ledger
protocols or self-custodial software interfaces;
(iii) an immutable and self-custodial software
interface;
(iv) developing, operating, or engaging in the
business of validating transactions or operating a
distributed ledger; or
(v) participating in a liquidity pool or other
similar mechanism for the provisioning of
liquidity for peer-to-peer transactions.
(8) Distributed ledger.--The term ``distributed ledger''
means technology in which data is shared across a network that
creates a public digital ledger of verified transactions or
information among network participants and cryptography is used
to link the data to maintain the integrity of the public ledger
and execute other functions.
(9) Distributed ledger protocol.--The term ``distributed
ledger protocol'' means publicly available and accessible
executable software deployed to a distributed ledger, including
smart contracts or networks of smart contracts.
(10) Federal branch.--The term ``Federal branch'' has the
meaning given that term in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813).
(11) Federal qualified payment stablecoin issuer.--The term
``Federal qualified payment stablecoin issuer'' means--
(A) a nonbank entity, other than a State qualified
payment stablecoin issuer, approved by the Comptroller,
pursuant to section 5, to issue payment stablecoins;
(B) an uninsured national bank--
(i) that is chartered by the Comptroller,
pursuant to title LXII of the Revised Statutes;
and
(ii) that is approved by the Comptroller,
pursuant to section 5, to issue payment
stablecoins; and
(C) a Federal branch that is approved by the
Comptroller, pursuant to section 5, to issue payment
stablecoins.
(12) Foreign payment stablecoin issuer.--The term ``foreign
payment stablecoin issuer'' means an issuer of a payment
stablecoin that is--
(A) organized under the laws of or domiciled in a
foreign country, a territory of the United States,
Puerto Rico, Guam, American Samoa, or the Virgin
Islands; and
(B) not a permitted payment stablecoin issuer.
(13) Institution-affiliated party.--With respect to a
permitted payment stablecoin issuer, the term ``institution-
affiliated party'' means any director, officer, employee, or
controlling stockholder of the permitted payment stablecoin
issuer.
(14) Insured credit union.--The term ``insured credit
union'' has the meaning given that term in section 101 of the
Federal Credit Union Act (12 U.S.C. 1752).
(15) Insured depository institution.--The term ``insured
depository institution'' means--
[[Page 139 STAT. 421]]
(A) an insured depository institution, as defined in
section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813); and
(B) an insured credit union.
(16) Lawful order.--The term ``lawful order'' means any
final and valid writ, process, order, rule, decree, command, or
other requirement issued or promulgated under Federal law,
issued by a court of competent jurisdiction or by an authorized
Federal agency pursuant to its statutory authority, that--
(A) requires a person to seize, freeze, burn, or
prevent the transfer of payment stablecoins issued by
the person;
(B) specifies the payment stablecoins or accounts
subject to blocking with reasonable particularity; and
(C) is subject to judicial or administrative review
or appeal as provided by law.
(17) Monetary value.--The term ``monetary value'' means a
national currency or deposit (as defined in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813)) denominated in a
national currency.
(18) Money.--The term ``money''--
(A) means a medium of exchange currently authorized
or adopted by a domestic or foreign government; and
(B) includes a monetary unit of account established
by an intergovernmental organization or by agreement
between 2 or more countries.
(19) National currency.--The term ``national currency''
means each of the following:
(A) A Federal Reserve note (as the term is used in
the first undesignated paragraph of section 16 of the
Federal Reserve Act (12 U.S.C. 411)).
(B) Money standing to the credit of an account with
a Federal Reserve Bank.
(C) Money issued by a foreign central bank.
(D) Money issued by an intergovernmental
organization pursuant to an agreement by 2 or more
governments.
(20) Nonbank entity.--The term ``nonbank entity'' means a
person that is not a depository institution or subsidiary of a
depository institution.
(21) Offer.--The term ``offer'' means to make available for
purchase, sale, or exchange.
(22) Payment stablecoin.--The term ``payment stablecoin''--
(A) means a digital asset--
(i) that is, or is designed to be, used as a
means of payment or settlement; and
(ii) the issuer of which--
(I) is obligated to convert, redeem,
or repurchase for a fixed amount of
monetary value, not including a digital
asset denominated in a fixed amount of
monetary value; and
(II) represents that such issuer
will maintain, or create the reasonable
expectation that it will maintain, a
stable value relative to the value of a
fixed amount of monetary value; and
(B) does not include a digital asset that--
(i) is a national currency;
[[Page 139 STAT. 422]]
(ii) is a deposit (as defined in section 3 of
the Federal Deposit Insurance Act (12 U.S.C.
1813)), including a deposit recorded using
distributed ledger technology; or
(iii) is a security, as defined in section 2
of the Securities Act of 1933 (15 U.S.C. 77b),
section 3 of the Securities Exchange Act of 1934
(15 U.S.C. 78c), or section 2 of the Investment
Company Act of 1940 (15 U.S.C. 80a-2), except
that, for the avoidance of doubt, no bond, note,
evidence of indebtedness, or investment contract
that was issued by a permitted payment stablecoin
issuer shall qualify as a security solely by
virtue of its satisfying the conditions described
in subparagraph (A), consistent with section 17 of
this Act.
(23) Permitted payment stablecoin issuer.--The term
``permitted payment stablecoin issuer'' means a person formed in
the United States that is--
(A) a subsidiary of an insured depository
institution that has been approved to issue payment
stablecoins under section 5;
(B) a Federal qualified payment stablecoin issuer;
or
(C) a State qualified payment stablecoin issuer.
(24) Person.--The term ``person'' means an individual,
partnership, company, corporation, association, trust, estate,
cooperative organization, or other business entity, incorporated
or unincorporated.
(25) Primary federal payment stablecoin regulator.--The term
``primary Federal payment stablecoin regulator'' means--
(A) with respect to a subsidiary of an insured
depository institution (other than an insured credit
union), the appropriate Federal banking agency of such
insured depository institution;
(B) with respect to an insured credit union or a
subsidiary of an insured credit union, the National
Credit Union Administration;
(C) with respect to a State chartered depository
institution not specified under subparagraph (A), the
Corporation, the Comptroller, or the Board; and
(D) with respect to a Federal qualified payment
stablecoin issuer, the Comptroller.
(26) Registered public accounting firm.--The term
``registered public accounting firm'' has the meaning given that
term under section 2 of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7201).
(27) Stablecoin certification review committee.--The term
``Stablecoin Certification Review Committee'' means the
committee of that name and having the functions as provided in
this Act--
(A) of which--
(i) the Secretary of the Treasury shall serve
as Chair; and
(ii) the Chair of the Board (or the Vice Chair
for Supervision, as delegated by the Chair of the
Board), and the Chair of the Corporation shall
serve as members; and
[[Page 139 STAT. 423]]
(B) which, unless otherwise specified in this Act,
shall act by \2/3\ vote of its members at any meeting
called by the Chair or by unanimous written consent.
(28) State.--The term ``State'' means each of the several
States of the United States, the District of Columbia, and each
territory of the United States.
(29) State chartered depository institution.--The term
``State chartered depository institution'' has the meaning given
the term ``State depository institution'' in section 3(c) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(c)).
(30) State payment stablecoin regulator.--The term ``State
payment stablecoin regulator'' means a State agency that has
primary regulatory and supervisory authority in such State over
entities that issue payment stablecoins.
(31) State qualified payment stablecoin issuer.--The term
``State qualified payment stablecoin issuer'' means an entity
that--
(A) is legally established under the laws of a State
and approved to issue payment stablecoins by a State
payment stablecoin regulator; and
(B) is not an uninsured national bank chartered by
the Comptroller pursuant to title LXII of the Revised
Statutes, a Federal branch, an insured depository
institution, or a subsidiary of such national bank,
Federal branch, or insured depository institution.
(32) Subsidiary.--The term ``subsidiary'' has the meaning
given that term in section 3 of the Federal Deposit Insurance
Act (12 U.S.C. 1813).
(33) Subsidiary of an insured credit union.--With respect to
an insured credit union, the term ``subsidiary of an insured
credit union'' means--
(A) an organization providing services to the
insured credit union that are associated with the
routine operations of credit unions, as described in
section 107(7)(I) of the Federal Credit Union Act (12
U.S.C. 1757(7)(I));
(B) a credit union service organization, as such
term is used under part 712 of title 12, Code of Federal
Regulations, with respect to which the insured credit
union has an ownership interest or to which the insured
credit union has extended a loan; and
(C) a subsidiary of a State chartered insured credit
union authorized under State law.
SEC. 3. <<NOTE: 12 USC 5902.>> ISSUANCE AND TREATMENT OF PAYMENT
STABLECOINS.
(a) Limitation on Issuers.--It shall be unlawful for any person
other than a permitted payment stablecoin issuer to issue a payment
stablecoin in the United States.
(b) Prohibition on Offers or Sales.--
(1) <<NOTE: Effective date.>> In general.--Except as
provided in subsection (c) and section 18, beginning on the date
that is 3 years after the date of enactment of this Act, it
shall be unlawful for a digital asset service provider to offer
or sell a payment stablecoin to a person in the United States,
unless the payment stablecoin is issued by a permitted payment
stablecoin issuer.
(2) <<NOTE: Compliance.>> Foreign payment stablecoin
issuers.--It shall be unlawful for any digital asset service
provider to offer, sell, or otherwise make available in the
United States a payment
[[Page 139 STAT. 424]]
stablecoin issued by a foreign payment stablecoin issuer unless
the foreign payment stablecoin issuer has the technological
capability to comply, and will comply, with the terms of any
lawful order and any reciprocal arrangement pursuant to section
18.
(c) <<NOTE: Determinations.>> Limited Safe Harbors.--
(1) In general.--The Secretary of the Treasury may issue
regulations providing safe harbors from subsection (a) that
are--
(A) consistent with the purposes of the Act;
(B) limited in scope; and
(C) <<NOTE: Applicability.>> apply to a de minimis
volume of transactions, as determined by the Secretary
of the Treasury.
(2) Unusual and exigent circumstances.--
(A) In general.--If the Secretary of the Treasury
determines that unusual and exigent circumstances exist,
the Secretary may provide limited safe harbors from
subsection (a).
(B) Justification.--Prior to issuing a limited safe
harbor under this paragraph, the Secretary of the
Treasury shall submit to the chairs and ranking members
of the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of
the House of Representatives a justification for the
determination of the unusual and exigent circumstances,
which may be contained in a classified annex, as
applicable.
(d) Rulemaking.--Consistent with section 13, the Secretary of the
Treasury shall issue regulations to implement this section, including
regulations to define terms.
(e) Extraterritorial Effect.--This section is intended to have
extraterritorial effect if conduct involves the offer or sale of a
payment stablecoin to a person located in the United States.
(f) Penalty for Violation.--
(1) In general.--Whoever knowingly participates in a
violation of subsection (a) shall be fined not more than
$1,000,000 for each such violation, imprisoned for not more than
5 years, or both.
(2) Referral to attorney general.--If a primary Federal
payment stablecoin regulator has reason to believe that any
person has knowingly violated subsection (a), the primary
Federal payment stablecoin regulator may refer the matter to the
Attorney General.
(g) Treatment.--A payment stablecoin that is not issued by a
permitted payment stablecoin issuer shall not be--
(1) treated as cash or as a cash equivalent for accounting
purposes;
(2) eligible as cash or as a cash equivalent margin and
collateral for futures commission merchants, derivative clearing
organizations, broker-dealers, registered clearing agencies, and
swap dealers; or
(3) acceptable as a settlement asset to facilitate wholesale
payments between banking organizations or by a payment
infrastructure to facilitate exchange and settlement among
banking organizations.
(h) Rules of Construction.--
(1) Exempt transactions.--This section shall not apply to--
[[Page 139 STAT. 425]]
(A) the direct transfer of digital assets between 2
individuals acting on their own behalf and for their own
lawful purposes, without the involvement of an
intermediary;
(B) to any transaction involving the receipt of
digital assets by an individual between an account owned
by the individual in the United States and an account
owned by the individual abroad that are offered by the
same parent company; or
(C) to any transaction by means of a software or
hardware wallet that facilitates an individual's own
custody of digital assets.
(2) Treasury authority.--Nothing in this Act shall alter the
existing authority of the Secretary of the Treasury to block,
restrict, or limit transactions involving payment stablecoins
that reference or are denominated in United States dollars that
are subject to the jurisdiction of the United States.
SEC. 4. <<NOTE: 12 USC 5903.>> REQUIREMENTS FOR ISSUING PAYMENT
STABLECOINS.
(a) Standards for the Issuance of Payment Stablecoins.--
(1) In general.--A permitted payment stablecoin issuer
shall--
(A) maintain identifiable reserves backing the
outstanding payment stablecoins of the permitted payment
stablecoin issuer on an at least 1 to 1 basis, with
reserves comprising--
(i) United States coins and currency
(including Federal Reserve notes) or money
standing to the credit of an account with a
Federal Reserve Bank;
(ii) funds held as demand deposits (or other
deposits that may be withdrawn upon request at any
time) or insured shares at an insured depository
institution (including any foreign branches or
agents, including correspondent banks, of an
insured depository institution), subject to
limitations established by the Corporation and the
National Credit Union Administration, as
applicable, to address safety and soundness risks
of such insured depository institution;
(iii) <<NOTE: Time period.>> Treasury bills,
notes, or bonds--
(I) with a remaining maturity of 93
days or less; or
(II) issued with a maturity of 93
days or less;
(iv) <<NOTE: Time period.>> money received
under repurchase agreements, with the permitted
payment stablecoin issuer acting as a seller of
securities and with an overnight maturity, that
are backed by Treasury bills with a maturity of 93
days or less;
(v) reverse repurchase agreements, with the
permitted payment stablecoin issuer acting as a
purchaser of securities and with an overnight
maturity, that are collateralized by Treasury
notes, bills, or bonds on an overnight basis,
subject to overcollateralization in line with
standard market terms, that are--
(I) tri-party;
(II) centrally cleared through a
clearing agency registered with the
Securities and Exchange Commission; or
[[Page 139 STAT. 426]]
(III) bilateral with a counterparty
that the issuer has determined to be
adequately creditworthy even in the
event of severe market stress;
(vi) securities issued by an investment
company registered under section 8(a) of the
Investment Company Act of 1940 (15 U.S.C. 80a-
8(a)), or other registered Government money market
fund, and that are invested solely in underlying
assets described in clauses (i) through (v);
(vii) any other similarly liquid Federal
Government-issued asset approved by the primary
Federal payment stablecoin regulator, in
consultation with the State payment stablecoin
regulator, if applicable, of the permitted payment
stablecoin issuer; or
(viii) <<NOTE: Compliance.>> any reserve
described in clause (i) through (iii) or clause
(vi) through (vii) in tokenized form, provided
that such reserves comply with all applicable laws
and regulations;
(B) <<NOTE: Public information.>> publicly disclose
the issuer's redemption policy, which shall--
(i) <<NOTE: Procedures.>> establish clear and
conspicuous procedures for timely redemption of
outstanding payment stablecoins, provided that any
discretionary limitations on timely redemptions
can only be imposed by a State qualified payment
stablecoin regulator, the Corporation, the
Comptroller, or the Board, consistent with section
7; and
(ii) <<NOTE: Time period. Notice.>> publicly,
clearly, and conspicuously disclose in plain
language all fees associated with purchasing or
redeeming the payment stablecoins, provided that
such fees can only be changed upon not less than 7
days' prior notice to consumers; and
(C) <<NOTE: Web posting.>> publish the monthly
composition of the issuer's reserves on the website of
the issuer, containing--
(i) the total number of outstanding payment
stablecoins issued by the issuer; and
(ii) the amount and composition of the
reserves described in subparagraph (A), including
the average tenor and geographic location of
custody of each category of reserve instruments.
(2) Prohibition on rehypothecation.--Reserves required under
paragraph (1)(A) may not be pledged, rehypothecated, or reused
by the permitted payment stablecoin issuer, either directly or
indirectly, except for the purpose of--
(A) satisfying margin obligations in connection with
investments in permitted reserves under clauses (iv) and
(v) of paragraph (1)(A);
(B) satisfying obligations associated with the use,
receipt, or provision of standard custodial services; or
(C) <<NOTE: Time period.>> creating liquidity to
meet reasonable expectations of requests to redeem
payment stablecoins, such that reserves in the form of
Treasury bills may be sold as purchased securities for
repurchase agreements with a maturity of 93 days or
less, provided that either--
(i) the repurchase agreements are cleared by a
clearing agency registered with the Securities and
Exchange Commission; or
[[Page 139 STAT. 427]]
(ii) <<NOTE: Advance approval.>> the
permitted payment stablecoin issuer receives the
prior approval of its primary Federal payment
stablecoin regulator or State payment stablecoin
regulator, as applicable.
(3) Monthly certification; examination of reports by
registered public accounting firm.--
(A) In general.--A permitted payment stablecoin
issuer shall, each month, have the information disclosed
in the previous month-end report required under
paragraph (1)(D) examined by a registered public
accounting firm.
(B) Certification.--Each month, the Chief Executive
Officer and Chief Financial Officer of a permitted
payment stablecoin issuer shall submit a certification
as to the accuracy of the monthly report to, as
applicable--
(i) the primary Federal payment stablecoin
regulator of the permitted payment stablecoin
issuer; or
(ii) the State payment stablecoin regulator of
the permitted payment stablecoin issuer.
(C) Criminal penalty.--Any person who submits a
certification required under subparagraph (B) knowing
that such certification is false shall be subject to the
same criminal penalties as those set forth under section
1350(c) of title 18, United States Code.
(4) Capital, liquidity, and risk management requirements.--
(A) In general.--The primary Federal payment
stablecoin regulators shall, or in the case of a State
qualified payment stablecoin issuer, the State payment
stablecoin regulator shall, consistent with section 13,
issue regulations implementing--
(i) capital requirements applicable to
permitted payment stablecoin issuers that--
(I) are tailored to the business
model and risk profile of permitted
payment stablecoin issuers;
(II) do not exceed requirements that
are sufficient to ensure the ongoing
operations of permitted payment
stablecoin issuers; and
(III) <<NOTE: Determination.>> in
the case of the primary Federal payment
stablecoin regulators, if the primary
Federal payment stablecoin regulators
determine that a capital buffer is
necessary to ensure the ongoing
operations of permitted payment
stablecoin issuers, may include capital
buffers that are tailored to the
business model and risk profile of
permitted payment stablecoin issuers;
(ii) the liquidity standard under paragraph
(1)(A);
(iii) reserve asset diversification, including
deposit concentration at banking institutions, and
interest rate risk management standards applicable
to permitted payment stablecoin issuers that--
(I) are tailored to the business
model and risk profile of permitted
payment stablecoin issuers; and
(II) do not exceed standards that
are sufficient to ensure the ongoing
operations of permitted payment
stablecoin issuers; and
[[Page 139 STAT. 428]]
(iv) appropriate operational, compliance, and
information technology risk management principles-
based requirements and standards, including Bank
Secrecy Act and sanctions compliance standards,
that--
(I) are tailored to the business
model and risk profile of permitted
payment stablecoin issuers; and
(II) are consistent with applicable
law.
(B) Rule of construction.--Nothing in this paragraph
shall be construed to limit--
(i) the authority of the primary Federal
payment stablecoin regulators, in prescribing
standards under this paragraph, to tailor or
differentiate among issuers on an individual basis
or by category, taking into consideration the
capital structure, business model risk profile,
complexity, financial activities (including
financial activities of subsidiaries), size, and
any other risk-related factors of permitted
payment stablecoin issuers that a primary Federal
payment stablecoin regulator determines
appropriate, provided that such tailoring or
differentiation occurs without respect to whether
a permitted payment stablecoin issuer is regulated
by a State payment stablecoin regulator; or
(ii) any supervisory, regulatory, or
enforcement authority of a primary Federal payment
stablecoin regulator to further the safe and sound
operation of an institution for which the primary
Federal payment stablecoin regulator is the
appropriate regulator.
(C) Applicability of existing capital standards.--
(i) Definition.--In this subparagraph, the
term ``depository institution holding company''
has the meaning given that term under section
171(a)(3) of the Financial Stability Act of 2010
(12 U.S.C. 5371(a)(3)).
(ii) Applicability of financial stability
act.--With respect to the promulgation of rules
under subparagraph (A) and clauses (iii) and (iv)
of this subparagraph, section 171 of the Financial
Stability Act of 2010 (12 U.S.C. 5371) shall not
apply.
(iii) Rules relating to leverage capital
requirements or risk-based capital requirements.--
Any rule issued by an appropriate Federal banking
agency that imposes, on a consolidated basis, a
leverage capital requirement or risk-based capital
requirement with respect to an insured depository
institution or depository institution holding
company shall provide that, for purposes of such
leverage capital requirement or risk-based capital
requirement, any insured depository institution or
depository institution holding company that
includes, on a consolidated basis, a permitted
payment stablecoin issuer, shall not be required
to hold, with respect to such permitted payment
stablecoin issuer and its assets and operations,
any amount of regulatory capital in excess of the
capital that such permitted payment stablecoin
issuer must maintain under the capital
requirements issued pursuant to subparagraph
(A)(i).
[[Page 139 STAT. 429]]
(iv) <<NOTE: Deadline. Compliance.>>
Modifications.--Not later than the earlier of the
rulemaking deadline under section 13 or the date
on which the Federal payment stablecoin regulators
issue regulations to carry out this section, each
appropriate Federal banking agency shall amend or
otherwise modify any regulation of the appropriate
Federal banking agency described in clause (iii)
so that such regulation, as amended or otherwise
modified, complies with clause (iii) of this
subparagraph.
(5) Treatment under the bank secrecy act and sanctions
laws.--
(A) <<NOTE: Applicability.>> In general.--A
permitted payment stablecoin issuer shall be treated as
a financial institution for purposes of the Bank Secrecy
Act, and as such, shall be subject to all Federal laws
applicable to a financial institution located in the
United States relating to economic sanctions, prevention
of money laundering, customer identification, and due
diligence, including--
(i) <<NOTE: Risk assessments. Designation.>>
maintenance of an effective anti-money laundering
program, which shall include appropriate risk
assessments and designation of an officer to
supervise the program;
(ii) <<NOTE: Records.>> retention of
appropriate records;
(iii) monitoring and reporting of any
suspicious transaction relevant to a possible
violation of law or regulation;
(iv) <<NOTE: Policies. Procedures.>>
technical capabilities, policies, and procedures
to block, freeze, and reject specific or
impermissible transactions that violate Federal or
State laws, rules, or regulations;
(v) <<NOTE: Verification.>> maintenance of an
effective customer identification program,
including identification and verification of
account holders with the permitted payment
stablecoin issuer, high-value transactions, and
appropriate enhanced due diligence; and
(vi) <<NOTE: Verification. Lists.>>
maintenance of an effective economic sanctions
compliance program, including verification of
sanctions lists, consistent with Federal law.
(B) Rulemaking.--The Secretary of the Treasury shall
adopt rules, tailored to the size and complexity of
permitted payment stablecoin issuers, to implement
subparagraph (A).
(C) Reservation of authority.--Nothing in this Act
shall restrict the authority of the Secretary of the
Treasury to implement, administer, and enforce the
provisions of subchapter II of chapter 53 of title 31,
United States Code.
(6) Coordination with permitted payment stablecoin issuers
with respect to blocking of property and technological
capabilities to comply with lawful orders.--
(A) In general.--The Secretary of the Treasury--
(i) shall, to the best of the Secretary's
ability, coordinate with a permitted payment
stablecoin issuer before taking any action to
block and prohibit transactions in property and
interests in property of a foreign person to
ensure that the permitted payment stablecoin
issuer is able to effectively block a payment
[[Page 139 STAT. 430]]
stablecoin of the foreign person upon issuance of
the payment stablecoin; and
(ii) is not required to notify any permitted
payment stablecoin issuer of any intended action
described in clause (i) prior to taking such
action.
(B) Compliance with lawful orders.--A permitted
payment stablecoin issuer may issue payment stablecoins
only if the issuer has the technological capability to
comply, and will comply, with the terms of any lawful
order.
(C) Report required.--Not later than 1 year after
the date of enactment of this Act, the Attorney General
and the Secretary of the Treasury shall submit to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the
House of Representatives a report, which may include a
classified annex if applicable, on the coordination with
permitted payment stablecoin issuers required under
subparagraph (A).
(D) Rule of construction.--Nothing in this paragraph
shall be construed to alter or affect the authority of
State payment stablecoin regulators with respect to the
offer of foreign-issued digital assets that are issued
within a foreign jurisdiction.
(7) Limitation on payment stablecoin activities.--
(A) In general.--A permitted payment stablecoin
issuer may only--
(i) issue payment stablecoins;
(ii) redeem payment stablecoins;
(iii) manage related reserves, including
purchasing, selling, and holding reserve assets or
providing custodial services for reserve assets,
consistent with State and Federal law;
(iv) provide custodial or safekeeping services
for payment stablecoins, required reserves, or
private keys of payment stablecoins, consistent
with this Act; and
(v) undertake other activities that directly
support any of the activities described in clauses
(i) through (iv).
(B) Rule of construction.--Nothing in subparagraph
(A) shall limit a permitted payment stablecoin issuer
from engaging in payment stablecoin activities or
digital asset service provider activities specified by
this Act, and activities incidental thereto, that are
authorized by the primary Federal payment stablecoin
regulator or the State payment stablecoin regulator, as
applicable, consistent with all other Federal and State
laws, provided that the claims of payment stablecoin
holders rank senior to any potential claims of non-
stablecoin creditors with respect to the reserve assets,
consistent with section 11.
(8) Prohibition on tying.--
(A) In general.--A permitted payment stablecoin
issuer may not provide services to a customer on the
condition that the customer obtain an additional paid
product or service from the permitted payment stablecoin
issuer, or any of its subsidiaries, or agree to not
obtain an additional product or service from a
competitor.
[[Page 139 STAT. 431]]
(B) Regulations.--The Board may issue such
regulations as are necessary to carry out this
paragraph, and, in consultation with other relevant
primary Federal payment stablecoin regulators, may by
regulation or order, permit such exceptions to
subparagraph (A) as the Board considers will not be
contrary to the purpose of this Act.
(9) Prohibition on the use of deceptive names.--
(A) In general.--A permitted payment stablecoin
issuer may not--
(i) use any combination of terms relating to
the United States Government, including ``United
States'', ``United States Government'', and
``USG'' in the name of a payment stablecoin; or
(ii) market a payment stablecoin in such a way
that a reasonable person would perceive the
payment stablecoin to be--
(I) legal tender, as described in
section 5103 of title 31, United States
Code;
(II) issued by the United States; or
(III) guaranteed or approved by the
Government of the United States.
(B) Pegged stablecoins.--Abbreviations directly
relating to the currency to which a payment stablecoin
is pegged, such as ``USD'', are not subject to the
prohibitions in subparagraph (A).
(10) Audits and reports.--
(A) Annual financial statement.--
(i) In general.--A permitted payment
stablecoin issuer with more than $50,000,000,000
in consolidated total outstanding issuance, that
is not subject to the reporting requirements under
section 13(a) or 15(d) of the Securities and
Exchange Act of 1934 (15 U.S.C. 78m, 78o(d)),
shall prepare, in accordance with generally
accepted accounting principles, an annual
financial statement, which shall include the
disclosure of any related party transactions, as
defined by such generally accepted accounting
principles.
(ii) Auditor.--A registered public accounting
firm shall perform an audit of the annual
financial statements described in clause (i).
(iii) Standards.--An audit described in clause
(ii) shall be conducted in accordance with all
applicable auditing standards established by the
Public Company Accounting Oversight Board,
including those relating to auditor independence,
internal controls, and related party transactions.
(iv) Rule of construction.--Nothing in this
subparagraph shall be construed to limit, alter,
or expand the jurisdiction of the Public Company
Accounting Oversight Board over permitted payment
stablecoin issuers or registered public accounting
firms.
(B) Public disclosure and submission to federal
regulators.--Each permitted payment stablecoin issuer
required to prepare an audited annual financial
statement under subparagraph (A) shall--
[[Page 139 STAT. 432]]
(i) make such audited financial statements
publicly available on the website of the permitted
payment stablecoin issuer; and
(ii) submit such audited financial statements
annually to their primary Federal payment
stablecoin regulator.
(C) Consultation.--The primary Federal payment
stablecoin regulators may consult with the Public
Company Accounting Oversight Board to determine best
practices for determining audit oversight and to detect
fraud, material misstatements, and other financial
misrepresentations that could mislead permitted payment
stablecoin holders.
(11) Prohibition on interest.--No permitted payment
stablecoin issuer or foreign payment stablecoin issuer shall pay
the holder of any payment stablecoin any form of interest or
yield (whether in cash, tokens, or other consideration) solely
in connection with the holding, use, or retention of such
payment stablecoin.
(12) <<NOTE: Compliance.>> Non-financial services public
companies.--
(A) Definitions.--In this paragraph:
(i) Financial activities.--The term
``financial activities''--
(I) has the meaning given that term
in section 4(k) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1843(k));
and
(II) for the avoidance of doubt,
includes those activities described in
subparagraphs (A) and (B) of section
2(7) and section 4(a)(7)(A) of this Act.
(ii) Public company.--The term ``public
company'' means an issuer that is required to file
reports under section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m(a),
78o(d)).
(B) Prohibition.--
(i) In general.--A public company that is not
predominantly engaged in 1 or more financial
activities, and its wholly or majority owned
subsidiaries or affiliates, may not issue a
payment stablecoin unless the public company
obtains a unanimous vote of the Stablecoin
Certification Review Committee finding that--
(I) it will not pose a material risk
to the safety and soundness of the
United States banking system, the
financial stability of the United
States, or the Deposit Insurance Fund;
(II) <<NOTE: Consent.>> the public
company will comply with data use
limitations providing that, unless the
public company receives consent from the
consumer, nonpublic personal information
obtained from stablecoin transaction
data may not be--
(aa) used to target,
personalize, or rank advertising
or other content;
(bb) sold to any third
party; or
(cc) shared with non-
affiliates; and
(III) the public company and the
affiliates of the public company will
comply with the tying prohibitions under
paragraph (8).
[[Page 139 STAT. 433]]
(ii) Exception.--The prohibition under clause
(i) against the sharing of consumer information
shall not apply to sharing of such information--
(I) to comply with Federal, State,
or local laws, rules, and other
applicable legal requirements;
(II) to comply with a properly
authorized civil, criminal, or
regulatory investigation, subpoena, or
summons by a Federal, State, or local
authority; or
(III) to respond to judicial process
or a government regulatory authority
having jurisdiction over the public
company.
(C) Extension of prohibition.--
(i) In general.--Any company not domiciled in
the United States or its Territories that is not
predominantly engaged in 1 or more financial
activities, may not issue a payment stablecoin
unless the public company obtains a unanimous vote
of the Stablecoin Certification Review Committee
finding that--
(I) it will not pose a material risk
to the safety and soundness of the
United States banking system, the
financial stability of the United
States, or the Deposit Insurance Fund;
(II) <<NOTE: Consent.>> the public
company will comply with data use
limitations providing that, unless the
public company receives consent from the
consumer, nonpublic personal information
obtained from stablecoin transaction
data may not be--
(aa) used to target,
personalize, or rank advertising
or other content;
(bb) sold to any third
party; or
(cc) shared with non-
affiliates; except
(III) the public company and the
affiliates of the public company will
comply with the tying prohibitions under
paragraph (8).
(ii) Exception.--The prohibition under clause
(i) against the sharing of consumer information
shall not apply to sharing of such information--
(I) to comply with Federal, State,
or local laws, rules, and other
applicable legal requirements;
(II) to comply with a properly
authorized civil, criminal, or
regulatory investigation, subpoena, or
summons by a Federal, State, or local
authority; or
(III) to respond to judicial process
or a government regulatory authority
having jurisdiction over the public
company.
(D) <<NOTE: Deadline.>> Rulemaking.--Not later than
1 year after the date of enactment of this Act, the
Stablecoin Certification Review Committee shall issue an
interpretive rule clarifying the application of this
paragraph.
(13) Eligibility.--Nothing in this Act shall be construed as
expanding or contracting legal eligibility to receive services
available from a Federal Reserve bank or to make deposits with a
Federal Reserve bank, in each case pursuant to the Federal
Reserve Act.
[[Page 139 STAT. 434]]
(14) Rule of construction.--Compliance with this section
does not alter or affect any additional requirement of a State
payment stablecoin regulator that may apply relating to the
offering of payment stablecoins.
(b) Regulation by the Comptroller.--
(1) In general.--Notwithstanding section 5136C of the
Revised Statutes (12 U.S.C. 25b), section 6 of the Home Owners'
Loan Act (12 U.S.C. 1465), or any applicable State law relating
to licensing and supervision, a Federal qualified payment
stablecoin issuer approved by the Comptroller pursuant to
section 5 of this Act shall be licensed, regulated, examined,
and supervised exclusively by the Comptroller, which shall have
authority, in coordination with other relevant primary Federal
payment stablecoin regulators and State payment stablecoin
regulators, to issue such regulations and orders as necessary to
ensure financial stability and implement subsection (a).
(2) Conforming amendment.--Section 324(b) of the Revised
Statutes (12 U.S.C. 1(b)) is amended by adding at the end the
following:
``(3) Regulation of federal qualified payment stablecoin
issuers.--The Comptroller of the Currency shall, in coordination
with other relevant regulators and consistent with section 13 of
the GENIUS Act, issue such regulations and orders as necessary
to ensure financial stability and implement section 4(a) of that
Act.''.
(c) State-level Regulatory Regimes.--
(1) Option for state-level regulatory regime.--
Notwithstanding the Federal regulatory framework established
under this Act, a State qualified payment stablecoin issuer with
a consolidated total outstanding issuance of not more than
$10,000,000,000 may opt for regulation under a State-level
regulatory regime, provided that the State-level regulatory
regime is substantially similar to the Federal regulatory
framework under this Act.
(2) <<NOTE: Notice. Determination.>> Principles.--The
Secretary of the Treasury shall, through notice and comment
rulemaking, establish broad-based principles for determining
whether a State-level regulatory regime is substantially similar
to the Federal regulatory framework under this Act.
(3) <<NOTE: Contracts.>> Review.--State payment stablecoin
regulators shall review State-level regulatory regimes according
to the principles established by the Secretary of the Treasury
under paragraph (2) and for the purposes of establishing any
necessary cooperative agreements to implement section 7(f).
(4) <<NOTE: Deadlines.>> Certification.--
(A) Initial certification.--Subject to subparagraph
(B), not later than 1 year after the effective date of
this Act, a State payment stablecoin regulator shall
submit to the Stablecoin Certification Review Committee
an initial certification that the State-level regulatory
regime meets the criteria for substantial similarity
established pursuant to paragraph (2).
(B) <<NOTE: Attestation.>> Form of certification.--
The initial certification required under subparagraph
(A) shall contain, in a form prescribed by the
Stablecoin Certification Review Committee, an
attestation that the State-level regulatory
[[Page 139 STAT. 435]]
regime meets the criteria for substantial similarity
established pursuant to paragraph (2).
(C) Annual recertification.--Not later than a date
to be determined by the Secretary of the Treasury each
year, a State payment stablecoin regulator shall submit
to the Stablecoin Certification Review Committee an
additional certification that confirms the accuracy of
the initial certification submitted under subparagraph
(A).
(5) Certification review.--
(A) <<NOTE: Deadline.>> In general.--Not later than
30 days after the date on which a State payment
stablecoin regulator submits an initial certification or
a recertification under paragraph (4), the Stablecoin
Certification Review Committee shall--
(i) <<NOTE: Approval. Determination.>>
approve such certification if the Committee
unanimously determines that the State-level
regulatory regime meets or exceeds the standards
and requirements described in subsection (a); or
(ii) <<NOTE: Denial.>> deny such
certification and provide the State payment
stablecoin regulator with a written explanation of
the denial, describing the reasoned basis for the
denial with sufficient detail to enable the State
payment stablecoin regulator and State-level
regulatory regime to make any changes necessary to
meet or exceed the standards and requirements
described in subsection (a).
(B) Recertifications.--With respect to any
recertification certification submitted by a State
payment stablecoin regulator under paragraph (4), the
Stablecoin Certification Review Committee shall only
deny the recertification if--
(i) the State-level regulatory regime has
materially changed from the prior certification or
there has been a significant change in
circumstances; and
(ii) the material change in the regime or
significant change in circumstances described in
clause (i) is such that the State-level regulatory
regime will not promote the safe and sound
operation of State qualified payment stablecoin
issuers under its supervision.
(C) Opportunity to cure.--
(i) <<NOTE: Deadline.>> In general.--With
respect to a denial described under subparagraph
(A) or (B), the Stablecoin Certification Review
Committee shall provide the State payment
stablecoin regulator with not less than 180 days
from the date on which the State payment
stablecoin regulator is notified of such denial
to--
(I) make such changes as may be
necessary to ensure the State-level
regulatory regime meets or exceeds the
standards described in subsection (a);
and
(II) resubmit the initial
certification or recertification.
(ii) <<NOTE: Determination. Deadline.>>
Denial.--If, after a State payment stablecoin
regulator resubmits an initial certification or
recertification under clause (i), the Stablecoin
Certification Review Committee again determines
that the initial certification or recertification
shall result in a denial, the Stablecoin
Certification Review Committee shall,
[[Page 139 STAT. 436]]
not later than 30 days after such determination,
provide the State payment stablecoin regulator
with a written explanation for the determination.
(D) Appeal of denial.--A State payment stablecoin
regulator in receipt of a denial under subparagraph
(C)(ii) may appeal the denial to the United States Court
of Appeals for the District of Columbia Circuit.
(E) Right to resubmit.--A State payment stablecoin
regulator in receipt of a denial under this paragraph
shall not be prohibited from resubmitting a new
certification under paragraph (4).
(6) <<NOTE: Federal Register, publication. Web posting.>>
List.--The Secretary of the Treasury shall publish and maintain
in the Federal Register and on the website of the Department of
the Treasury a list of States that have submitted initial
certifications and recertifications under paragraph (4).
(7) Expedited certifications of existing regulatory
regimes.--The <<NOTE: Deadline. Guidance. Timeline.>>
Stablecoin Certification Review Committee shall take all
necessary steps to endeavor that, with respect to a State that,
within 180 days of the date of enactment of this Act, has in
effect a prudential regulatory regime (including regulations and
guidance) for the supervision of digital assets or payment
stablecoins, the certification process under this paragraph with
respect to that regime occurs on an expedited timeline after the
effective date of this Act.
(d) <<NOTE: Deadlines. Effective dates.>> Transition to Federal
Oversight.--
(1) Depository institution.--A State chartered depository
institution that is a State qualified payment stablecoin issuer
with a payment stablecoin with a consolidated total outstanding
issuance of more than $10,000,000,000 shall--
(A) not later than 360 days after the payment
stablecoin reaches such threshold, transition to the
Federal regulatory framework of the primary Federal
payment stablecoin regulator of the State chartered
depository institution, which shall be administered by
the State payment stablecoin regulator of the State
chartered depository institution and the primary Federal
payment stablecoin regulator acting jointly; or
(B) beginning on the date the payment stablecoin
reaches such threshold, cease issuing new payment
stablecoins until the payment stablecoin is under the
$10,000,000,000 consolidated total outstanding issuance
threshold.
(2) Other institutions.--A State qualified payment
stablecoin issuer not described in paragraph (1) with a payment
stablecoin with a consolidated total outstanding issuance of
more than $10,000,000,000 shall--
(A) not later than 360 days after the payment
stablecoin reaches such threshold, transition to the
Federal regulatory framework under subsection (a)
administered by the relevant State payment stablecoin
regulator and the Comptroller, acting in coordination;
or
(B) beginning on the date the payment stablecoin
reaches such threshold, cease issuing new payment
stablecoins until the payment stablecoin is under the
$10,000,000,000 consolidated total outstanding issuance
threshold.
(3) Waiver.--
[[Page 139 STAT. 437]]
(A) In general.--Notwithstanding paragraphs (1) and
(2), the applicable primary Federal payment stablecoin
regulator may permit a State qualified payment
stablecoin issuer with a payment stablecoin with a
consolidated total outstanding issuance of more than
$10,000,000,000 to remain solely supervised by a State
payment stablecoin regulator.
(B) <<NOTE: Determination.>> Criteria for waiver.--
The primary Federal payment stablecoin regulator shall
consider the following exclusive criteria in determining
whether to issue a waiver under this paragraph:
(i) The capital maintained by the State
qualified payment stablecoin issuer.
(ii) The past operations and examination
history of the State qualified payment stablecoin
issuer.
(iii) The experience of the State payment
stablecoin regulator in supervising payment
stablecoin and digital asset activities.
(iv) The supervisory framework, including
regulations and guidance, of the State qualified
payment stablecoin issuer with respect to payment
stablecoins and digital assets.
(C) Rule of construction.--
(i) Federal oversight.--A State qualified
payment stablecoin issuer subject to Federal
oversight under paragraph (1) or (2) of this
subsection that does not receive a waiver under
this paragraph shall continue to be supervised by
the State payment stablecoin regulator of the
State qualified payment stablecoin issuer jointly
with the primary Federal payment stablecoin
regulator. Nothing in this subsection shall
require the State qualified payment stablecoin
issuer to convert to a Federal charter.
(ii) <<NOTE: Guidance. Time
period. Approval.>> State oversight.--A State
qualified payment stablecoin issuer supervised by
a State payment stablecoin regulator that has
established a prudential regulatory regime
(including regulations and guidance) for the
supervision of digital assets or payment
stablecoins before the 90-day period ending on the
date of enactment of this Act that has been
certified pursuant to subsection (c) and has
approved 1 or more issuers to issue payment
stablecoins under the supervision of such State
payment stablecoin regulator, shall be
presumptively approved for a waiver under this
paragraph, unless the Federal payment stablecoin
regulator finds, by clear and convincing evidence,
that the requirements of subparagraph (B) are not
substantially met with respect to that issuer or
that the issuer poses significant safety and
soundness risks to the financial system of the
United States.
(e) Misrepresentation of Insured Status.--
(1) In general.--Payment stablecoins shall not be backed by
the full faith and credit of the United States, guaranteed by
the United States Government, subject to deposit insurance by
the Federal Deposit Insurance Corporation, or subject to share
insurance by the National Credit Union Administration.
(2) Misrepresentation of insured status.--
[[Page 139 STAT. 438]]
(A) In general.--It shall be unlawful to represent
that payment stablecoins are backed by the full faith
and credit of the United States, guaranteed by the
United States Government, or subject to Federal deposit
insurance or Federal share insurance.
(B) Penalty.--A violation of subparagraph (A) shall
be considered a violation of section 18(a)(4) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(a)(4)) or
section 709 of title 18, United States Code, as
applicable.
(3) Marketing.--
(A) In general.--It shall be unlawful to market a
product in the United States as a payment stablecoin
unless the product is issued pursuant to this Act.
(B) Penalty.--Whoever knowingly and willfully
participates in a violation of subparagraph (A) shall be
fined by the Department of the Treasury not more than
$500,000 for each such violation.
(C) Determination of the number of violations.--For
purposes of determining the number of violations for
which to impose penalties under subparagraph (B),
separate acts of noncompliance are a single violation
when the acts are the result of--
(i) a common or substantially overlapping
originating cause; or
(ii) the same statement or publication.
(D) Referral to secretary of the treasury.--If a
Federal payment stablecoin regulator has reason to
believe that any person has knowingly and willfully
violated subparagraph (A), the Federal payment
stablecoin regulator shall refer the matter to the
Secretary of the Treasury.
(f) Officers or Directors Convicted of Certain Felonies.--
(1) In general.--No individual who has been convicted of a
felony offense involving insider trading, embezzlement,
cybercrime, money laundering, financing of terrorism, or
financial fraud may serve as--
(A) an officer of a payment stablecoin issuer; or
(B) a director of a payment stablecoin issuer.
(2) Penalty.--
(A) In general.--Whoever knowingly participates in a
violation of paragraph (1) shall be fined not more than
$1,000,000 for each such violation, imprisoned for not
more than 5 years, or both.
(B) Referral to attorney general.--If a Federal
payment stablecoin regulator has reason to believe that
any person has knowingly violated paragraph (1), the
Federal payment stablecoin regulator shall refer the
matter to the Attorney General.
(g) Clarification Relating to Federal Savings Association
Reserves.--A Federal savings association established under the Home
Owners' Loan Act (12 U.S.C. 1461 et seq.) that holds a reserve that
satisfies the requirements of section 4(a)(1) shall not be required to
satisfy the qualified thrift lender test under section 10(m) of the Home
Owners' Loan Act (12 U.S.C. 1467a(m)) with respect to such reserve
assets.
(h) Rulemaking.--
[[Page 139 STAT. 439]]
(1) In general.--Consistent with section 13, the primary
Federal payment stablecoin regulators shall, and State payment
stablecoin regulators may, issue such regulations relating to
permitted payment stablecoin issuers as may be necessary to
establish a payment stablecoin regulatory framework necessary to
administer and carry out the requirements of this section,
including to establish conditions, and to prevent evasion
thereof.
(2) Coordinated issuance of regulations.--All regulations
issued to carry out this section shall be issued in coordination
by the primary Federal payment stablecoin regulators, if not
issued by a State payment stablecoin regulator.
(i) Rules of Construction.--Nothing in this Act shall be construed--
(1) as expanding the authority of the Board with respect to
the services the Board can make directly available to the
public; or
(2) to limit or prevent the continued application of
applicable ethics statutes and regulations administered by the
Office of Government Ethics, or the ethics rules of the Senate
and the House of Representatives, including section 208 of title
18, United States Code, and sections 2635.702 and 2635.802 of
title 5, Code of Federal Regulations. For the avoidance of
doubt, existing Office of Government Ethics laws and the ethics
rules of the Senate and the House of Representatives prohibit
any member of Congress or senior executive branch official from
issuing a payment stablecoin during their time in public
service. For the purposes of this paragraph, an employee
described in section 202 of title 18, United States Code, shall
be deemed an executive branch employee for purposes of complying
with section 208 of that title.
SEC. 5. <<NOTE: 12 USC 5904.>> APPROVAL OF SUBSIDIARIES OF
INSURED DEPOSITORY INSTITUTIONS AND FEDERAL
QUALIFIED PAYMENT STABLECOIN ISSUERS.
(a) Application.--
(1) In general.--Each primary Federal payment stablecoin
regulator shall--
(A) <<NOTE: Review.>> receive, review, and consider
for approval applications from any insured depository
institution that seeks to issue payment stablecoins
through a subsidiary and any nonbank entity, Federal
branch, or uninsured national bank that is chartered by
the Comptroller pursuant to title LXII of the Revised
Statutes, and that seeks to issue payment stablecoins as
a Federal qualified payment stablecoin issuer; and
(B) <<NOTE: Process.>> establish a process and
framework for the licensing, regulation, examination,
and supervision of such entities that prioritizes the
safety and soundness of such entities.
(2) Authority to issue regulations and process
applications. <<NOTE: Deadline.>> --The primary Federal payment
stablecoin regulators shall, before the date described in
section 13--
(A) issue regulations consistent with that section
to carry out this section; and
(B) pursuant to the regulations described in
subparagraph (A), accept and process applications
described in paragraph (1).
[[Page 139 STAT. 440]]
(3) <<NOTE: Determination.>> Mandatory approval process.--A
primary Federal payment stablecoin regulator shall, upon receipt
of a substantially complete application received under paragraph
(1), evaluate and make a determination on each application based
on the criteria established under this Act.
(b) Evaluation of Applications.--A substantially complete
application received under subsection (a) shall be evaluated by the
primary Federal payment stablecoin regulator using the factors described
in subsection (c).
(c) Factors to Be Considered.--The factors described in this
subsection are the following:
(1) The ability of the applicant (or, in the case of an
applicant that is an insured depository institution, the
subsidiary of the applicant), based on financial condition and
resources, to meet the requirements set forth under section 4.
(2) Whether an individual who has been convicted of a felony
offense involving insider trading, embezzlement, cybercrime,
money laundering, financing of terrorism, or financial fraud is
serving as an officer or director of the applicant.
(3) The competence, experience, and integrity of the
officers, directors, and principal shareholders of the
applicant, its subsidiaries, and parent company, including--
(A) the record of those officers, directors, and
principal shareholders of compliance with laws and
regulations; and
(B) the ability of those officers, directors, and
principal shareholders to fulfill any commitments to,
and any conditions imposed by, their primary Federal
payment stablecoin regulator in connection with the
application at issue and any prior applications.
(4) Whether the redemption policy of the applicant meets the
standards under section 4(a)(1)(B).
(5) Any other factors established by the primary Federal
payment stablecoin regulator that are necessary to ensure the
safety and soundness of the permitted payment stablecoin issuer.
(d) <<NOTE: Deadlines.>> Timing for Decision; Grounds for Denial.--
(1) Timing for decisions on applications.--
(A) In general.--Not later than 120 days after
receiving a substantially complete application under
subsection (a), a primary Federal payment stablecoin
regulator shall render a decision on the application.
(B) Substantially complete.--
(i) In general.--For purposes of subparagraph
(A), an application shall be considered
substantially complete if the application contains
sufficient information for the primary Federal
payment stablecoin regulator to render a decision
on whether the applicant satisfies the factors
described in subsection (c).
(ii) Notification.--Not later than 30 days
after receiving an application under subsection
(a), a primary Federal payment stablecoin
regulator shall notify the applicant as to whether
the primary Federal payment stablecoin regulator
considers the application to be substantially
complete and, if the application is not
substantially complete, the additional information
[[Page 139 STAT. 441]]
the applicant shall provide in order for the
application to be considered substantially
complete.
(iii) Material change in circumstances.--An
application considered substantially complete
under this subparagraph remains substantially
complete unless there is a material change in
circumstances that requires the primary Federal
payment stablecoin regulator to treat the
application as a new application.
(2) Denial of application.--
(A) Grounds for denial.--
(i) <<NOTE: Determination.>> In general.--A
primary Federal payment stablecoin regulator shall
only deny a substantially complete application
received under subsection (a) if the regulator
determines that the activities of the applicant
would be unsafe or unsound based on the factors
described in subsection (c).
(ii) Issuance on open, public, or
decentralized network not ground for denial.--The
issuance of a payment stablecoin on an open,
public, or decentralized network shall not be a
valid ground for denial of an application received
under subsection (a).
(B) <<NOTE: Notice. Recommenda- tions.>>
Explanation required.--If a primary Federal payment
stablecoin regulator denies a complete application
received under subsection (a), not later than 30 days
after the date of such denial, the regulator shall
provide the applicant with written notice explaining the
denial with specificity, including all findings made by
the regulator with respect to all identified material
shortcomings in the application, including actionable
recommendations on how the applicant could address the
identified material shortcomings.
(C) Opportunity for hearing; final determination.--
(i) In general.--Not later than 30 days after
the date of receipt of any notice of the denial of
an application under this section, the applicant
may request, in writing, an opportunity for a
written or oral hearing before the primary Federal
payment stablecoin regulator to appeal the denial.
(ii) Timing.--Upon receipt of a timely request
under clause (i), the primary Federal payment
stablecoin regulator shall notice a time (not
later than 30 days after the date of receipt of
the request) and place at which the applicant may
appear, personally or through counsel, to submit
written materials or provide oral testimony and
oral argument.
(iii) <<NOTE: Notification. Statement.>>
Final determination.--Not later than 60 days after
the date of a hearing under this subparagraph, the
applicable primary Federal payment stablecoin
regulator shall notify the applicant of a final
determination, which shall contain a statement of
the basis for that determination, with specific
findings.
(iv) Notice if no hearing.--If an applicant
does not make a timely request for a hearing under
this subparagraph, the primary Federal payment
stablecoin regulator shall notify the applicant,
not later than 10 days after the date by which the
applicant may
[[Page 139 STAT. 442]]
request a hearing under this subparagraph, in
writing, that the denial of the application is a
final determination of the primary Federal payment
stablecoin regulator.
(3) Failure to render a decision.--If a primary Federal
payment stablecoin regulator fails to render a decision on a
complete application within the time period specified in
paragraph (1), the application shall be deemed approved.
(4) Right to reapply.--The denial of an application under
this section shall not prohibit the applicant from filing a
subsequent application.
(e) Reports on Pending Applications.--Each primary Federal payment
stablecoin regulator shall--
(1) notify Congress upon beginning to process applications
under this Act; and
(2) annually report to Congress on the applications that
have been pending for 180 days or more since the date the
initial application was filed and for which the applicant has
been informed that the application remains incomplete, including
documentation on the status of such applications and why such
applications have not yet been approved.
(f) <<NOTE: Waiver authority. Time period. Effective date.>> Safe
Harbor for Pending Applications.--The primary Federal payment stablecoin
regulators may waive the application of the requirements of this Act for
a period not to exceed 12 months beginning on the effective date of this
Act, with respect to--
(1) a subsidiary of an insured depository institution, if
the insured depository institution has an application pending
for the subsidiary to become a permitted payment stablecoin
issuer on that effective date; or
(2) a Federal qualified payment stablecoin issuer with a
pending application on that effective date.
(g) Rulemaking.--Consistent with section 13, the primary Federal
payment stablecoin regulators shall issue rules necessary for the
regulation of the issuance of payment stablecoins, but may not impose
requirements in addition to the requirements specified under section 4.
(h) Relation to Other Licensing Requirements.--The provisions of
this section supersede and preempt any State requirement for a charter,
license, or other authorization to do business with respect to a Federal
qualified payment stablecoin issuer or subsidiary of an insured
depository institution or credit union that is approved under this
section to be a permitted payment stablecoin issuer. Nothing in this
subsection shall preempt or supersede the authority of a State to
charter, license, supervise, or regulate an insured depository
institution or credit union chartered in such State or to supervise a
subsidiary of such insured depository institution or credit union that
is approved under this section to be a permitted payment stablecoin
issuer.
(i) Certification Required.--
(1) <<NOTE: Deadline. Time period.>> In general.--Not later
than 180 days after the approval of an application, and on an
annual basis thereafter, each permitted payment stablecoin
issuer shall submit to its primary Federal payment stablecoin
regulator, or in the case of a State qualified payment
stablecoin issuer its State payment
[[Page 139 STAT. 443]]
stablecoin regulator, a certification that the issuer has
implemented anti-money laundering and economic sanctions
compliance programs that are reasonably designed to prevent the
permitted payment stablecoin issuer from facilitating money
laundering, in particular, facilitating money laundering for
cartels and organizations designated as foreign terrorist
organizations under section 219 of the Immigration and
Nationality Act (8 U.S.C. 1189) and the financing of terrorist
activities, consistent with the requirements of this Act.
(2) Availability of certifications.--Federal payment
stablecoin regulators and State payment stablecoin regulators
shall make certifications described in paragraph (1) available
to the Secretary of Treasury upon request.
(3) Penalties.--
(A) Approval revocation.--The primary Federal
payment stablecoin regulator or State payment stablecoin
regulator of a permitted payment stablecoin issuer that
does not submit a certification pursuant to paragraph
(1) may revoke the approval of the payment stablecoin
issuer under this section.
(B) Criminal penalty.--
(i) In general.--Any person that knowingly
submits a certification pursuant to paragraph (1)
that is false shall be subject to the criminal
penalties set forth under section 1001 of title
18, United States Code.
(ii) Referral to attorney general.--If a
Federal payment stablecoin regulator or State
payment stablecoin regulator has reason to believe
that any person has knowingly violated paragraph
(1), the applicable regulator may refer the matter
to the Attorney General or to the attorney general
of the payment stablecoin issuer's host State.
SEC. 6. <<NOTE: 12 USC 5905.>> SUPERVISION AND ENFORCEMENT WITH
RESPECT TO FEDERAL QUALIFIED PAYMENT
STABLECOIN ISSUERS AND SUBSIDIARIES OF INSURED
DEPOSITORY INSTITUTIONS.
(a) Supervision.--
(1) In general.--Each permitted payment stablecoin issuer
that is not a State qualified payment stablecoin issuer with a
payment stablecoin with a consolidated total outstanding
issuance of less than $10,000,000,000 shall be subject to
supervision by the appropriate primary Federal payment
stablecoin regulator.
(2) Submission of reports.--Each permitted payment
stablecoin issuer described in paragraph (1) shall, upon
request, submit to the appropriate primary Federal payment
stablecoin regulator a report on--
(A) the financial condition of the permitted payment
stablecoin issuer;
(B) the systems of the permitted payment stablecoin
issuer for monitoring and controlling financial and
operating risks;
(C) compliance by the permitted payment stablecoin
issuer (and any subsidiary thereof) with this Act; and
(D) the compliance of the Federal qualified nonbank
payment stablecoin issuer with the requirements of the
[[Page 139 STAT. 444]]
Bank Secrecy Act and with laws authorizing the
imposition of sanctions and implemented by the Secretary
of the Treasury.
(3) <<NOTE: Assessments.>> Examinations.--The appropriate
primary Federal payment stablecoin regulator shall examine a
permitted payment stablecoin issuer described in paragraph (1)
in order to assess--
(A) the nature of the operations and financial
condition of the permitted payment stablecoin issuer;
(B) the financial, operational, technological, and
other risks associated within the permitted payment
stablecoin issuer that may pose a threat to--
(i) the safety and soundness of the permitted
payment stablecoin issuer; or
(ii) the stability of the financial system of
the United States; and
(C) the systems of the permitted payment stablecoin
issuer for monitoring and controlling the risks
described in subparagraph (B).
(4) Requirements for efficiency.--
(A) Use of existing reports.--In supervising and
examining a permitted payment stablecoin issuer under
this subsection, a primary Federal payment stablecoin
regulator shall, to the fullest extent possible, use
existing reports and other supervisory information.
(B) Avoidance of duplication.--A primary Federal
payment stablecoin regulator shall, to the fullest
extent possible, avoid duplication of examination
activities, reporting requirements, and requests for
information in carrying out this subsection with respect
to a permitted payment stablecoin issuer.
(C) Consideration of burden.--A primary Federal
payment stablecoin regulator shall, with respect to any
examination or request for the submission of a report
under this subsection, only request examinations and
reports at a cadence and in a format that is similar to
that required for similarly situated entities regulated
by the primary Federal payment stablecoin regulator.
(b) <<NOTE: Determinations.>> Enforcement.--
(1) Suspension or revocation of registration.--The primary
Federal payment stablecoin regulator of a permitted payment
stablecoin issuer that is not a State qualified payment
stablecoin issuer with a payment stablecoin with a consolidated
total outstanding issuance of less than $10,000,000,000 may
prohibit the permitted payment stablecoin issuer from issuing
payment stablecoins, if the primary Federal payment stablecoin
regulator determines that such permitted payment stablecoin
issuer, or an institution-affiliated party of the permitted
payment stablecoin issuer is willfully or recklessly violating
or has willfully or recklessly violated--
(A) this Act or any regulation or order issued under
this Act; or
(B) any condition imposed in writing by the primary
Federal payment stablecoin regulator in connection with
a written agreement entered into between the permitted
payment stablecoin issuer and the primary Federal
payment stablecoin regulator.
[[Page 139 STAT. 445]]
(2) Cease-and-desist proceedings.--If the primary Federal
payment stablecoin regulator of a permitted payment stablecoin
issuer that is not a State qualified payment stablecoin issuer
with a payment stablecoin with a consolidated total outstanding
issuance of less than $10,000,000,000 has reasonable cause to
believe that the permitted payment stablecoin issuer or any
institution-affiliated party of the permitted payment stablecoin
issuer is violating, has violated, or is attempting to violate
this Act, any regulation or order issued under this Act, or any
written agreement entered into with the primary Federal payment
stablecoin regulator or condition imposed in writing by the
primary Federal payment stablecoin regulator in connection with
any application or other request, the primary Federal payment
stablecoin regulator may, by provisions that are mandatory or
otherwise, order the permitted payment stablecoin issuer or
institution-affiliated party of the permitted payment stablecoin
issuer to--
(A) cease and desist from such violation or
practice; or
(B) take affirmative action to correct the
conditions resulting from any such violation or
practice.
(3) Removal and prohibition authority.--The primary Federal
payment stablecoin regulator of a permitted payment stablecoin
issuer that is not a State qualified payment stablecoin issuer
may remove an institution-affiliated party of the permitted
payment stablecoin issuer from the position or office of that
institution-affiliated party or prohibit further participation
in the affairs of the permitted payment stablecoin issuer or of
all such permitted payment stablecoin issuers by that
institution-affiliated party, if the primary Federal payment
stablecoin regulator determines that--
(A) the institution-affiliated party has knowingly
committed a violation or attempted violation of this Act
or any regulation or order issued under this Act; or
(B) the institution-affiliated party has knowingly
committed a violation of any provision of subchapter II
of chapter 53 of title 31, United States Code.
(4) Procedures.--
(A) <<NOTE: Compliance.>> In general.--If a primary
Federal payment stablecoin regulator identifies a
violation or attempted violation of this Act or makes a
determination under paragraph (1), (2), or (3), the
primary Federal payment stablecoin regulator shall
comply with the procedures set forth in subsections (b)
and (e) of section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818) or subsections (e) and (g) of
section 206 the Federal Credit Union Act (12 U.S.C.
1786(e) and (g)), as applicable.
(B) Judicial review.--A person aggrieved by a final
action under this subsection may obtain judicial review
of such action exclusively as provided in section 8(h)
of the Federal Deposit Insurance Act (12 U.S.C. 1818(h))
or section 206(j) of the Federal Credit Union Act (12
U.S.C. 1786(j)), as applicable.
(C) Injunction.--A primary Federal payment
stablecoin regulator may, at the discretion of the
regulator, follow the procedures provided in section
8(i)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818(i)(1)) or
[[Page 139 STAT. 446]]
section 206(k)(1) of the Federal Credit Union Act (12
U.S.C. 1786(k)(1)), as applicable, for judicial
enforcement of any effective and outstanding notice or
order issued under this subsection.
(D) Temporary cease-and-desist proceedings.--If a
primary Federal payment stablecoin regulator determines
that a violation or attempted violation of this Act or
an action with respect to which a determination was made
under paragraph (1), (2), or (3), or the continuation
thereof, is likely to cause insolvency or significant
dissipation of assets or earnings of a permitted payment
stablecoin issuer, or is likely to weaken the condition
of the permitted payment stablecoin issuer or otherwise
prejudice the interests of the customers of the
permitted payment stablecoin issuer prior to the
completion of the proceedings conducted under this
paragraph, the primary Federal payment stablecoin
regulator may follow the procedures provided in section
8(c) of the Federal Deposit Insurance Act (12 U.S.C.
1818(c)) or section 206(f) of the Federal Credit Union
Act (12 U.S.C. 1786(f)), as applicable, to issue a
temporary cease and desist order.
(5) Civil money penalties.--Unless otherwise specified in
this Act, the civil money penalties for violations of this Act
consist of the following:
(A) Failure to be approved.--Any person that issues
a United States dollar-denominated payment stablecoin in
violation of section 3, and any institution-affiliated
party of such a person who knowingly participates in
issuing such a payment stablecoin, shall be liable for a
civil penalty of not more than $100,000 for each day
during which such payment stablecoins are issued.
(B) First tier.--Except as provided in subparagraph
(A), a permitted payment stablecoin issuer or
institution-affiliated party of such permitted payment
stablecoin issuer that materially violates this Act or
any regulation or order issued under this Act, or that
materially violates any condition imposed in writing by
the appropriate primary Federal payment stablecoin
regulator in connection with a written agreement entered
into between the permitted payment stablecoin issuer and
that primary Federal payment stablecoin regulator, shall
be liable for a civil penalty of not more than $100,000
for each day during which the violation continues.
(C) Second tier.--Except as provided in subparagraph
(A), and in addition to the penalties described in
subparagraph (B), a permitted payment stablecoin issuer
or institution-affiliated party of such permitted
payment stablecoin issuer who knowingly participates in
a violation of any provision of this Act, or any
regulation or order issued under this Act, shall be
liable for a civil penalty of not more than an
additional $100,000 for each day during which the
violation continues.
(D) Procedure.--Any penalty imposed under this
paragraph may be assessed and collected by the
appropriate primary Federal payment stablecoin regulator
pursuant to the procedures set forth in section 8(i)(2)
of the Federal Deposit Insurance Act (12 U.S.C.
1818(i)(2)) or
[[Page 139 STAT. 447]]
section 206(k)(2) of the Federal Credit Union Act (12
U.S.C. 1786(k)(2)), as applicable.
(E) Notice and orders after separation from
service. <<NOTE: Time period.>> --The resignation,
termination of employment or participation, or
separation of an institution-affiliated party (including
a separation caused by the closing of a permitted
payment stablecoin issuer) shall not affect the
jurisdiction and authority of a primary Federal payment
stablecoin regulator to issue any notice or order and
proceed under this subsection against any such party, if
such notice or order is served before the end of the 6-
year period beginning on the date on which such party
ceased to be an institution-affiliated party with
respect to such permitted payment stablecoin issuer.
(6) Non-applicability to a state qualified payment
stablecoin issuer.--Notwithstanding anything in this subsection
to the contrary, this subsection shall not apply to a State
qualified payment stablecoin issuer.
(c) Rule of Construction.--Nothing in this Act may be construed to
modify or otherwise affect any right or remedy under any Federal
consumer financial law, including 12 U.S.C. 5515 and 15 U.S.C. 41 et
seq.
SEC. 7. <<NOTE: 12 USC 5906.>> STATE QUALIFIED PAYMENT STABLECOIN
ISSUERS.
(a) In General.--A State payment stablecoin regulator shall have
supervisory, examination, and enforcement authority over all State
qualified payment stablecoin issuers of such State.
(b) Authority To Enter Into Agreements With the
Board. <<NOTE: Memorandum.>> --A State payment stablecoin regulator may
enter into a memorandum of understanding with the Board, by mutual
agreement, under which the Board may participate in the supervision,
examination, and enforcement of this Act with respect to the State
qualified payment stablecoin issuers of such State.
(c) <<NOTE: Records.>> Sharing of Information.--A State payment
stablecoin regulator and the Board shall share information on an ongoing
basis with respect to a State qualified payment stablecoin issuer of
such State, including a copy of the initial application and any
accompanying documents.
(d) Rulemaking.--A State payment stablecoin regulator may issue
orders and rules under section 4 applicable to State qualified payment
stablecoin issuers to the same extent as the primary Federal payment
stablecoin regulators issue orders and rules under section 4 applicable
to permitted payment stablecoin issuers that are not State qualified
payment stablecoin issuers.
(e) Enforcement Authority in Unusual and Exigent Circumstances.--
(1) Board.--
(A) <<NOTE: Time period. Notice.>> In general.--
Subject to subparagraph (C), under unusual and exigent
circumstances that the Board determines to exist, the
Board may, after not less than 48 hours' prior written
notice to the applicable State payment stablecoin
regulator, take an enforcement action against a State
qualified payment stablecoin issuer or an institution-
affiliated party of such issuer for violations of this
Act during such unusual and exigent circumstances.
(B) Rulemaking.--Consistent with section 13, the
Board shall issue rules to set forth the unusual and
exigent
[[Page 139 STAT. 448]]
circumstances in which the Board may act under this
paragraph.
(C) <<NOTE: Determination.>> Limitations.--If,
after unusual and exigent circumstances are determined
to exist pursuant to subparagraph (A), the Board
determines that there is reasonable cause to believe
that the continuation by a State qualified payment
stablecoin issuer of any activity constitutes a serious
risk to the financial safety, soundness, or stability of
the State qualified payment stablecoin issuer, the Board
may impose such restrictions as the Board determines to
be necessary to address such risk during such unusual
and exigent circumstances, which may include limitations
on redemptions of payment stablecoins, and which shall
be issued in the form of a directive, with the effect of
a cease and desist order that has become final, to the
State qualified payment stablecoin issuer and any of its
affiliates, limiting--
(i) transactions between the State qualified
payment stablecoin issuer, a holding company, and
the subsidiaries or affiliates of either the State
qualified payment stablecoin issuer or the holding
company; and
(ii) any activities of the State qualified
payment stablecoin issuer that might create a
serious risk that the liabilities of a holding
company and the affiliates of the holding company
may be imposed on the State qualified payment
stablecoin issuer.
(D) Review of directive.--
(i) Administrative review.--
(I) In general.--After a directive
described in subparagraph (C) is issued,
the applicable State qualified payment
stablecoin issuer, or any institution-
affiliated party of the State qualified
payment stablecoin issuer subject to the
directive, may object and present to the
Board, in writing, the reasons why the
directive should be modified or
rescinded.
(II) <<NOTE: Deadline.>> Automatic
lapse of directive.--If, after 10 days
after the receipt of a response
described in subclause (I), the Board
does not affirm, modify, or rescind the
directive, the directive shall
automatically lapse.
(ii) Judicial review.--
(I) In general.--If the Board
affirms or modifies a directive pursuant
to clause (i), any affected party may
immediately thereafter petition the
United States district court for the
district in which the main office of the
affected party is located, or in the
United States District Court for the
District of Columbia, to stay, modify,
terminate, or set aside the directive.
(II) Relief for extraordinary
cause.--Upon a showing of extraordinary
cause, an affected party may petition
for relief under subclause (I) without
first pursuing or exhausting the
administrative remedies under clause
(i).
(2) Comptroller.--
[[Page 139 STAT. 449]]
(A) <<NOTE: Deadline. Notice.>> In general.--
Subject to subparagraph (C), under unusual and exigent
circumstances determined to exist by the Comptroller,
the Comptroller shall, after not less than 48 hours'
prior written notice to the applicable State payment
stablecoin regulator, take an enforcement action against
a State qualified payment stablecoin issuer that is a
nonbank entity for violations of this Act.
(B) Rulemaking.--Consistent with section 13, the
Comptroller shall issue rules to set forth the unusual
and exigent circumstances in which the Comptroller may
act under this paragraph.
(C) <<NOTE: Determination.>> Limitations.--If,
after unusual and exigent circumstances are determined
to exist under subparagraph (A), the Comptroller
determines that there is reasonable cause to believe
that the continuation of any activity by a State
qualified payment stablecoin issuer that is a nonbank
entity constitutes a serious risk to the financial
safety, soundness, or stability of the State qualified
payment stablecoin issuer that is a nonbank entity, the
Comptroller shall impose such restrictions as the
Comptroller determines to be necessary to address such
risk during such unusual and exigent circumstances,
which may include limitations on redemption of payment
stablecoins, and which shall be issued in the form of a
directive, with the effect of a cease and desist order
that has become final, to the State qualified payment
stablecoin issuer that is a nonbank entity and any of
its affiliates, limiting--
(i) transactions between the State qualified
payment stablecoin issuer, a holding company, and
the subsidiaries or affiliates of either the State
qualified payment stablecoin issuer or the holding
company; and
(ii) any activities of the State qualified
payment stablecoin issuer that might create a
serious risk that the liabilities of a holding
company and the affiliates of the holding company
may be imposed on the State qualified payment
stablecoin issuer.
(D) Review of directive.--
(i) Administrative review.--
(I) In general.--After a directive
described in subparagraph (C) is issued,
the applicable Federal qualified payment
stablecoin issuer, or any institution-
affiliated party of the Federal
qualified payment stablecoin issuer
subject to the directive, may object and
present to the Comptroller, in writing,
the reasons that the directive should be
modified or rescinded.
(II) <<NOTE: Deadline.>> Automatic
lapse of directive.--If, after 10 days
after the receipt of a response
described in subclause (I), the
Comptroller does not affirm, modify, or
rescind the directive, the directive
shall automatically lapse.
(ii) Judicial review.--
(I) In general.--If the Comptroller
affirms or modifies a directive pursuant
to clause (i), any affected party may
immediately thereafter petition the
United States district court for the
district in which the main office of the
affected party is
[[Page 139 STAT. 450]]
located, or in the United States
District Court for the District of
Columbia, to stay, modify, terminate, or
set aside the directive.
(II) Relief for extraordinary
cause.--Upon a showing of extraordinary
cause, an affected party may petition
for relief under subclause (I) without
first pursuing or exhausting the
administrative remedies under clause
(i).
(f) Effect on State Law.--
(1) <<NOTE: Applicability.>> Host state law.--
Notwithstanding any other provision of law, the laws of a host
State, including laws relating to consumer protection, shall
only apply to the activities conducted in the host State by an
out-of-State State qualified payment stablecoin issuer to the
same extent as such laws apply to the activities conducted in
the host State by an out-of-State Federal qualified payment
stablecoin issuer.
(2) Home state law.--If any host State law is determined not
to apply under paragraph (1), the laws of the home State of the
State qualified payment stablecoin issuer shall govern the
activities of the permitted payment stablecoin issuer conducted
in the host State.
(3) Applicability.--
(A) In general.--This subsection shall only apply to
an out-of-State State qualified payment stablecoin
issuer chartered, licensed, or otherwise authorized to
do business by a State that has a certification in place
pursuant to section 4(c) of this Act.
(B) Exclusion.--The laws applicable to an out-of-
State qualified payment stablecoin issuer under
paragraph (1) exclude host State laws governing the
chartering, licensure, or other authorization to do
business in the host State as a permitted payment
stablecoin issuer pursuant to this Act.
(4) Rule of construction.--Except for State laws relating to
the chartering, licensure, or other authorization to do business
as a permitted payment stablecoin issuer, nothing in this Act
shall preempt State consumer protection laws, including common
law, and the remedies available thereunder.
SEC. 8. <<NOTE: 12 USC 5907.>> ANTI-MONEY LAUNDERING PROTECTIONS.
(a) Payment Stablecoins Issued by a Foreign Payment Stablecoin
Issuer.--
(1) <<NOTE: Compliance.>> In general.--A payment stablecoin
that is issued by a foreign payment stablecoin issuer may not be
publicly offered, sold, or otherwise made available for trading
in the United States by a digital asset service provider unless
the foreign payment stablecoin issuer has the technological
capability to comply and complies with the terms of any lawful
order.
(2) Enforcement.--
(A) Authority.--The Secretary of the Treasury shall
have the authority to designate any foreign issuer that
publicly offers, sells, or otherwise makes available a
payment stablecoin in violation of paragraph (1) as
noncompliant.
(B) <<NOTE: Deadline. Notification.>> Designation
as noncompliant.--Not later than 30 days after the
Department of the Treasury has identified a foreign
payment stablecoin issuer of any payment
[[Page 139 STAT. 451]]
stablecoin trading in the United States that is in
violation of paragraph (1), the Secretary of the
Treasury, in coordination with relevant Federal
agencies, may, pursuant to the authority under
subparagraph (A), designate the foreign payment
stablecoin issuer as noncompliant and notify the foreign
payment stablecoin issuer in writing of the designation.
(3) Appeal.--A determination of noncompliance under this
subsection is subject to judicial review in the United States
Court of Appeals for the District of Columbia Circuit.
(b) <<NOTE: Federal Register,
publication. Determinations. Statements.>> Publication of Designation;
Prohibition on Secondary Trading.--
(1) <<NOTE: Compliance. Deadline.>> In general.--If a
foreign payment stablecoin issuer does not come into compliance
with the lawful order within 30 days from the date of issuance
of the written notice described in subsection (a), except as
provided in subsection (c), the Secretary of the Treasury
shall--
(A) publish the determination of noncompliance in
the Federal Register, including a statement on the
failure of the foreign payment stablecoin issuer to
comply with the lawful order after the written notice;
and
(B) <<NOTE: Notification.>> issue a notification in
the Federal Register prohibiting digital asset service
providers from facilitating secondary trading of payment
stablecoins issued by the foreign payment stablecoin
issuer in the United States.
(2) Effective date of prohibition.--The prohibition on
facilitation of secondary trading described in paragraph (1)
shall become effective on the date that is 30 days after the
date of issue of notification of the prohibition in the Federal
Register.
(3) Expiration of prohibition.--
(A) In general.--The prohibition on facilitation of
secondary trading described in paragraph (1)(B) shall
expire upon the Secretary of the Treasury's
determination that the foreign payment stablecoin issuer
is no longer noncompliant.
(B) <<NOTE: Criteria.>> Rulemaking.--Consistent
with section 13, the Secretary of the Treasury shall
specify the criteria that a noncompliant foreign issuer
must meet for the Secretary of the Treasury to determine
that the foreign payment stablecoin issuer is no longer
noncompliant.
(C) Publication.--Upon a determination under
subparagraph (A), the Secretary of the Treasury shall
publish the determination in the Federal Register,
including a statement detailing how the foreign payment
stablecoin issuer has met the criteria described in
subparagraph (B).
(4) Civil monetary penalties.--The Secretary of the Treasury
may impose a civil monetary penalty as follows:
(A) Digital asset service providers.--Any digital
asset service provider that knowingly violates a
prohibition under paragraph (1)(B) shall be subject to a
civil monetary penalty of not more than $100,000 per
violation per day.
(B) Foreign payment stablecoin issuers.--Any foreign
payment stablecoin issuer that knowingly continues to
publicly offer a payment stablecoin in the United States
after publication of the determination of noncompliance
under paragraph (1)(A) shall be subject to a civil
monetary
[[Page 139 STAT. 452]]
penalty of not more than $1,000,000 per violation per
day, and the Secretary of the Treasury may seek an
injunction in a district court of the United States to
bar the foreign payment stablecoin issuer from engaging
in financial transactions in the United States or with
United States persons.
(C) Determination of the number of violations.--For
purposes of determining the number of violations for
which to impose a penalty under subparagraph (A) or (B),
separate acts of noncompliance are a single violation
when the acts are the result of a common or
substantially overlapping originating cause.
Notwithstanding the foregoing, the Secretary of Treasury
may determine that multiple acts of noncompliance
constitute separate violations if such acts were the
result of gross negligence, a reckless disregard for, or
a pattern of indifference to, money laundering,
financing of terrorism, or sanctions evasion
requirements.
(D) Commencement of civil actions.--The Secretary of
the Treasury may commence a civil action against a
foreign payment stablecoin issuer in a district court of
the United States to--
(i) recover a civil monetary penalty assessed
under subparagraph (A) or (B);
(ii) seek an injunction to bar the foreign
payment stablecoin issuer from engaging in
financial transactions in the United States or
with United States persons; or
(iii) seek an injunction to stop a digital
asset service provider from offering on the
platform of the digital asset service provider
payment stablecoins issued by the foreign payment
stablecoin issuer.
(c) <<NOTE: Determinations.>> Waiver and Licensing Authority
Exemptions.--
(1) In general.--The Secretary of the Treasury may offer a
waiver, general license, or specific license to any United
States person engaging in secondary trading described in
subsection (b)(1)(B) on a case-by-case basis if the Secretary
determines that--
(A) prohibiting secondary trading would adversely
affect the financial system of the United States; or
(B) the foreign payment stablecoin issuer is taking
tangible steps to remedy the failure to comply with the
lawful order that resulted in the noncompliance
determination under subsection (a).
(2) National security waiver.--The Secretary of the
Treasury, in consultation with the Director of National
Intelligence and the Secretary of State, may waive the
application of the secondary trading restrictions under
subsection (b)(1)(B) if the Secretary of the Treasury determines
that the waiver is in the national security interest of the
United States.
(3) Waiver for intelligence and law enforcement
activities.--The head of a department or agency may waive the
application of this section with respect to--
(A) activities subject to the reporting requirements
under title V of the National Security Act of 1947 (50
U.S.C. 3091 et seq.), or any authorized intelligence
activities of the United States; or
[[Page 139 STAT. 453]]
(B) activities necessary to carry out or assist law
enforcement activity of the United States.
(4) Report required.--Not later than 7 days after issuing a
waiver or a license under paragraph (1), (2), or (3), the
Secretary of the Treasury shall submit to the chairs and ranking
members of the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the
House of Representatives, a report, which may include a
classified annex, if applicable, including the text of the
waiver or license, as well as the facts and circumstances
justifying the waiver determination, and provide a briefing on
the report.
(d) Rule of Construction.--Nothing in this Act shall be construed as
altering the existing authority of the Secretary of the Treasury to
block, restrict, or limit transactions involving payment stablecoins
that reference or are denominated in United States dollars that are
subject to the jurisdiction of the United States.
SEC. 9. <<NOTE: 12 USC 5908.>> ANTI-MONEY LAUNDERING INNOVATION.
(a) <<NOTE: Effective date. Time period.>> Public Comment.--
Beginning on the date that is 30 days after the date of enactment of
this Act, and for a period of 60 days thereafter, the Secretary of the
Treasury shall seek public comment to identify innovative or novel
methods, techniques, or strategies that regulated financial institutions
use, or have the potential to use, to detect illicit activity, such as
money laundering, involving digital assets, including comments with
respect to--
(1) application program interfaces;
(2) artificial intelligence;
(3) digital identify verification; and
(4) use of blockchain technology and monitoring.
(b) Treasury Research.--
(1) In general.--Upon completion of the public comment
period described in subsection (a), the Secretary of the
Treasury shall conduct research on the innovative or novel
methods, techniques, or strategies that regulated financial
institutions use, or have the potential to use, to detect
illicit activity, such as money laundering, involving digital
assets that were identified in such public comment period.
(2) <<NOTE: Evaluation.>> Research factors.--With respect
to each innovative or novel method, technique, or strategy
described in paragraph (1), the Financial Crimes Enforcement
Network shall evaluate and consider the following factors
against existing methods, techniques, or strategies:
(A) Improvements in the ability of financial
institutions to detect illicit activity involving
digital assets.
(B) Costs to regulated financial institutions.
(C) The amount and sensitivity of information that
is collected or reviewed.
(D) Privacy risks associated with the information
that is collected or reviewed.
(E) Operational challenges and efficiency
considerations.
(F) Cybersecurity risks.
(G) Effectiveness of methods, techniques, or
strategies at mitigating illicit finance.
(c) Treasury Risk Assessment.--As part of the national strategy for
combating terrorist and other illicit financing required
[[Page 139 STAT. 454]]
under sections 261 and 262 of the Countering America's Adversaries
Through Sanctions Act (Public Law 115-44; 131 Stat. 934), the Secretary
of the Treasury shall consider--
(1) the source of illicit activity, such as money laundering
and sanctions evasion involving digital assets;
(2) the effectiveness of and gaps in existing methods,
techniques, and strategies used by regulated financial
institutions in detecting illicit activity, such as money
laundering, involving digital assets;
(3) the impact of existing regulatory frameworks on the use
and development of innovative methods, techniques, or strategies
by regulated financial institutions; and
(4) any foreign jurisdictions that pose a high risk of
facilitating illicit activity through the use of digital assets
to obtain fiat currency.
(d) <<NOTE: Deadline. Notice.>> FinCEN Guidance or Rulemaking.--Not
later than 3 years after the date of enactment of this Act, the
Financial Crimes Enforcement Network shall issue public guidance and
notice and comment rulemaking, based on the results of the research and
risk assessments required under this section, relating to the following:
(1) The implementation of innovative or novel methods,
techniques, or strategies by regulated financial institutions to
detect illicit activity involving digital assets.
(2) Standards for payment stablecoin issuers to identify and
report illicit activity involving the payment stablecoin of a
permitted payment stablecoin issuer, including, fraud,
cybercrime, money laundering, financing of terrorism, sanctions
evasion, or insider trading.
(3) Standards for payment stablecoin issuers' systems and
practices to monitor transactions on blockchains, digital asset
mixing services, tumblers, or other similar services that mix
payment stablecoins in such a way as to make such transaction or
the identity of the transaction parties less identifiable.
(4) Tailored risk management standards for financial
institutions interacting with decentralized finance protocols.
(e) Recommendations and Report to Congress.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Secretary of the Treasury shall
submit to the chairs and ranking members of the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives
a report on--
(A) legislative and regulatory proposals to allow
regulated financial institutions to develop and
implement novel and innovative methods, techniques, or
strategies to detect illicit activity, such as money
laundering and sanctions evasion, involving digital
assets;
(B) the results of the research and risk assessments
conducted pursuant to this section;
(C) efforts to support the ability of financial
institutions to implement novel and innovative methods,
techniques, or strategies to detect illicit activity,
such as money laundering and sanctions evasion,
involving digital assets;
(D) the extent to which transactions on distributed
ledgers, digital asset mixing services, tumblers, or
other similar services that mix payment stablecoins in
such a
[[Page 139 STAT. 455]]
way as to make such transaction or the identity of the
transaction parties less identifiable may facilitate
illicit activity; and
(E) legislative recommendations relating to the
scope of the term ``digital asset service provider'' and
the application of that term to decentralized finance.
(2) Classified annex.--A report under this section may
include a classified annex, if applicable.
(f) Rule of Construction.--Nothing in this section shall be
construed to limit the existing authority of the Secretary of the
Treasury or the primary Federal payment stablecoin regulators to, prior
to the submission of a report required under this section, use existing
exemptive authorities, the no-action letter process, or rulemaking
authorities in a manner that encourages regulated financial institutions
to adopt novel or innovative methods, techniques, or strategies to
detect illicit activity, such as money laundering, involving digital
assets.
SEC. 10. <<NOTE: 12 USC 5909.>> CUSTODY OF PAYMENT STABLECOIN
RESERVE AND COLLATERAL.
(a) In General.--A person may only engage in the business of
providing custodial or safekeeping services for the payment stablecoin
reserve, the payment stablecoins used as collateral, or the private keys
used to issue permitted payment stablecoins if the person--
(1) is subject to--
(A) supervision or regulation by a primary Federal
payment stablecoin regulator or a primary financial
regulatory agency described under subparagraph (B) or
(C) of section 2(12) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (12 U.S.C. 5301(12));
or
(B) supervision by a State bank supervisor, as
defined under section 3 of the Federal Deposit Insurance
Act (12 U.S.C. 1813), or a State credit union
supervisor, as defined under section 6003 of the Anti-
Money Laundering Act of 2020 (31 U.S.C. 5311 note), and
such State bank supervisor or State credit union
supervisor makes available to the Board such information
as the Board determines necessary and relevant to the
categories of information under subsection (d); and
(2) <<NOTE: Compliance.>> complies with the requirements
under subsection (b), unless such person holds such property in
accordance with similar requirements as required by a primary
Federal payment stablecoin regulator, the Securities and
Exchange Commission, or the Commodity Futures Trading
Commission.
(b) Customer Property Requirement.--A person described in subsection
(a) shall, with respect to other property described in that subsection--
(1) treat and deal with the payment stablecoins, private
keys, cash, and other property of a person for whom or on whose
behalf the person described in that subsection receives,
acquires, or holds payment stablecoins, private keys, cash, and
other property (hereinafter referred to in this section as the
``customer'') as belonging to such customer and not as the
property of such person; and
[[Page 139 STAT. 456]]
(2) take such steps as are appropriate to protect the
payment stablecoins, private keys, cash, and other property of a
customer from the claims of creditors of the person.
(c) Commingling Prohibited.--
(1) In general.--Payment stablecoin reserves, payment
stablecoins, cash, and other property of a permitted payment
stablecoin issuer or customer shall be separately accounted for
by a person described in subsection (a) and shall be segregated
from and not be commingled with the assets of the person.
(2) Exceptions.--Notwithstanding paragraph (1) or subsection
(b)--
(A) the payment stablecoin reserves, payment
stablecoins, cash, and other property of a permitted
payment stablecoin issuer or customer may, for
convenience, be commingled and deposited in an omnibus
account holding the payment stablecoin reserves, payment
stablecoins, cash, and other property of more than 1
permitted payment stablecoin issuer or customer at a
State chartered depository institution, an insured
depository institution, national bank, or trust company,
and any payment stablecoin reserves in the form of cash
held in the form of a deposit liability at a depository
institution shall not be subject to any requirement
relating to the separation of such cash from the
property of the applicable depository institution;
(B) such share of the payment stablecoin reserves,
payment stablecoins, cash, and other property of the
permitted payment stablecoin issuer or customer that
shall be necessary to transfer, adjust, or settle a
transaction or transfer of assets may be withdrawn and
applied to such purposes, including the payment of
commissions, taxes, storage, and other charges lawfully
accruing in connection with the provision of services by
a person described in subsection (a);
(C) in accordance with such terms and conditions as
a primary Federal payment stablecoin regulator may
prescribe by rule, regulation, or order, any payment
stablecoin reserves, payment stablecoins, cash, and
other property described in this subsection may be
commingled and deposited in permitted payment stablecoin
issuer or customer accounts with payment stablecoin
reserves, payment stablecoins, cash, and other property
received by the person and required by the primary
Federal payment stablecoin regulator to be separately
accounted for, treated as, and dealt with as belonging
to such permitted payment stablecoin issuers or
customers; or
(D) an insured depository institution that provides
custodial or safekeeping services for payment stablecoin
reserves shall be permitted to hold payment stablecoin
reserves in the form of cash on deposit provided such
treatment is consistent with Federal law.
(3) <<NOTE: Claims.>> Customer priority.--With respect to
payment stablecoins held by a person described in subsection (a)
for a customer, with or without the segregation required under
paragraph (1), the claims of the customer against such person
with respect to such payment stablecoins shall have priority
[[Page 139 STAT. 457]]
over the claims of any person other than the claims of another
customer with respect to payment stablecoins held by such person
described in subsection (a), unless the customer expressly
consents to the priority of such other claim.
(d) Regulatory Information.--A person described under subsection (a)
shall submit to the applicable primary Federal payment stablecoin
regulator information concerning the person's business operations and
processes to protect customer assets, in such form and manner as the
primary regulator shall determine.
(e) Exclusion.--The requirements of this section shall not apply to
any person solely on the basis that such person engages in the business
of providing hardware or software to facilitate a customer's own custody
or safekeeping of the customer's payment stablecoins or private keys.
SEC. 11. TREATMENT OF PAYMENT STABLECOIN ISSUERS IN INSOLVENCY
PROCEEDINGS.
(a) <<NOTE: Claims. 12 USC 5910.>> In General.--Subject to section
507(e) of title 11, United States Code, as added by subsection (d), in
any insolvency proceeding of a permitted payment stablecoin issuer under
Federal or State law, including any proceeding under that title and any
insolvency proceeding administered by a State payment stablecoin
regulator with respect to a permitted payment stablecoin issuer--
(1) the claim of a person holding payment stablecoins issued
by the permitted payment stablecoin issuer shall have priority,
on a ratable basis with the claims of other persons holding such
payment stablecoins, over the claims of the permitted payment
stablecoin issuer and any other holder of claims against the
permitted payment stablecoin issuer, with respect to required
payment stablecoin reserves;
(2) notwithstanding any other provision of law, including
the definition of ``claim'' under section 101(5) of title 11,
United States Code, any person holding a payment stablecoin
issued by the permitted payment stablecoin issuer shall be
deemed to hold a claim; and
(3) the priority under paragraph (1) shall not apply to
claims other than those arising directly from the holding of
payment stablecoins.
(b) Definitions.--Section 101 of title 11, United States Code, is
amended by adding after paragraph (40B) the following:
``(40C) The terms `payment stablecoin' and `permitted
payment stablecoin issuer' have the meanings given those terms
in section 2 of the GENIUS Act.''.
(c) Automatic Stay.--Section 362 of title 11, United States Code, is
amended--
(1) in subsection (a)--
(A) in paragraph (7), by striking ``and'';
(B) in paragraph (8), by striking the period and
inserting ``; and''; and
(C) by adding at the end the following:
``(9) the redemption of payment stablecoins issued by the
permitted payment stablecoin issuer, from payment stablecoin
reserves required to be maintained under section 4 of the GENIUS
Act.''; and
(2) in subsection (d)--
(A) in paragraph (3)(B)(ii), by striking ``or'' at
the end;
[[Page 139 STAT. 458]]
(B) in paragraph (4)(B), by striking the period at
the end and inserting ``; or''; and
(C) by inserting after paragraph (4) the following:
``(5) <<NOTE: Courts. Distributions. Deadline.>> with
respect to the redemption of payment stablecoins held by a
person, if the court finds, subject to the motion and
attestation of the permitted payment stablecoin issuer, which
shall be filed on the petition date or as soon as practicable
thereafter, there are payment stablecoin reserves available for
distribution on a ratable basis to similarly situated payment
stablecoin holders, provided that the court shall use best
efforts to enter a final order to begin distributions under this
paragraph not later than 14 days after the date of the required
hearing.''.
(d) Priority in Bankruptcy Proceedings.--Section 507 of title 11,
United States Code, is amended--
(1) in subsection (a), in the matter preceding paragraph
(1), by striking ``The following'' and inserting ``Subject to
subsection (e), the following''; and
(2) by adding at the end the following:
``(e) <<NOTE: Claims.>> Notwithstanding subsection (a), if a
payment stablecoin holder is not able to redeem all outstanding payment
stablecoin claims from required payment stablecoin reserves maintained
by the permitted payment stablecoin issuer, any such remaining claim
arising from a person's holding of a payment stablecoin issued by the
permitted payment stablecoin issuer shall be a claim against the estate
and shall have first priority over any other claim, including over any
expenses and claims that have priority under that subsection, to the
extent compliance with section 4 of the GENIUS Act would have required
additional reserves to be maintained by the permitted payment stablecoin
issuer for payment stablecoin holders.''.
(e) Payment Stablecoin Reserves.--Section 541(b) of title 11, United
States Code, is amended--
(1) in paragraph (9), in the matter following subparagraph
(B), by striking ``or'' at the end;
(2) in paragraph (10)(C), by striking the period and
inserting ``; or''; and
(3) by inserting after paragraph (10) the following:
``(11) <<NOTE: Applicability.>> required payment stablecoin
reserves under section 4 of the GENIUS Act, provided that
notwithstanding the exclusion of such reserves from the property
of the estate, section 362 of this title shall apply to such
reserves.''.
(f) Intervention.--Section 1109 of title 11, United States Code, is
amended by adding at the end the following:
``(c) The Comptroller of the Currency or State payment stablecoin
regulator (as defined in section 2 of the GENIUS Act) shall raise, and
shall appear and be heard on, any issue, including the protection of
customers, in a case under this chapter in which the debtor is a
permitted payment stablecoin issuer.''.
(g) <<NOTE: 12 USC 5911.>> Application of Existing Insolvency
Law.--In accordance with otherwise applicable law, an insolvency
proceeding with respect to a permitted payment stablecoin issuer shall
occur as follows:
(1) A depository institution (as defined in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813)) shall be
resolved by the Federal Deposit Insurance Corporation,
[[Page 139 STAT. 459]]
National Credit Union Administration, or State payment
stablecoin regulator, as applicable.
(2) A subsidiary of a depository institution (as defined in
section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813))
or a nonbank entity may be considered a debtor under title 11,
United States Code.
(h) Study by Primary Federal Payment Stablecoin Regulators.--
(1) Study required.--The primary Federal payment stablecoin
regulators shall perform a study of the potential insolvency
proceedings of permitted payment stablecoin issuers, including
an examination of--
(A) existing gaps in the bankruptcy laws and rules
for permitted payment stablecoin issuers;
(B) the ability of payment stablecoin holders to be
paid out in full in the event a permitted payment
stablecoin issuer is insolvent; and
(C) the utility of orderly insolvency administration
regimes and whether any additional authorities are
needed to implement such regimes.
(2) Report.--Not later than 3 years after the date of
enactment of this Act, the primary Federal payment stablecoin
regulators shall submit to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives a report that contains
all findings of the study under paragraph (1), including any
legislative recommendations.
SEC. 12. <<NOTE: 12 USC 5912.>> INTEROPERABILITY STANDARDS.
The <<NOTE: Assessment.>> primary Federal payment stablecoin
regulators, in consultation with the National Institute of Standards and
Technology, other relevant standard-setting organizations, and State
bank and credit union regulators, shall assess and, if necessary, may,
pursuant to section 553 of title 5, United States Code, and in a manner
consistent with the National Technology Transfer and Advancement Act of
1995 (Public Law 104-113), prescribe standards for permitted payment
stablecoin issuers to promote compatibility and interoperability with--
(1) other permitted payment stablecoin issuers; and
(2) the broader digital finance ecosystem, including
accepted communications protocols and blockchains, permissioned
or public.
SEC. 13. <<NOTE: 12 USC 5913.>> RULEMAKING.
(a) <<NOTE: Deadline. Notice.>> In General.--Not later than 1 year
after the date of enactment of this Act, each primary Federal payment
stablecoin regulator, the Secretary of the Treasury, and each State
payment stablecoin regulator shall promulgate regulations to carry out
this Act through appropriate notice and comment rulemaking.
(b) Coordination.--Federal payment stablecoin regulators, the
Secretary of the Treasury, and State payment stablecoin regulators
should coordinate, as appropriate, on the issuance of any regulations to
implement this Act.
(c) Report Required.--Not later than 180 days after the effective
date of this Act, each Federal banking agency shall submit to the
Committee on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House
[[Page 139 STAT. 460]]
of Representatives a report that confirms and describes the regulations
promulgated to carry out this Act.
SEC. 14. STUDY ON NON-PAYMENT STABLECOINS.
(a) Study by Treasury.--
(1) Study.--The Secretary of the Treasury, in consultation
with the Board, the Comptroller, the Corporation, the Securities
and Exchange Commission, and the Commodity Futures Trading
Commission shall carry out a study of non-payment stablecoins,
including endogenously collateralized payment stablecoins.
(2) Report.--Not later than 365 days after the date of the
enactment of this Act, the Secretary of the Treasury shall
provide to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the
House of Representatives a report that contains all findings
made in carrying out the study under paragraph (1), including an
analysis of--
(A) the categories of non-payment stablecoins,
including the benefits and risks of technological design
features;
(B) the participants in non-payment stablecoin
arrangements;
(C) utilization and potential utilization of non-
payment stablecoins;
(D) the nature of reserve compositions;
(E) types of algorithms being employed;
(F) governance structure, including aspects of
decentralization;
(G) the nature of public promotion and advertising;
and
(H) the clarity and availability of consumer notices
disclosures.
(3) Classified annex.--A report under this section may
include a classified annex, if applicable.
(b) Endogenously Collateralized Payment Stablecoin Defined.--In this
section, the term ``endogenously collateralized payment stablecoin''
means any digital asset--
(1) the originator of which has represented will be
converted, redeemed, or repurchased for a fixed amount of
monetary value; and
(2) that relies solely on the value of another digital asset
created or maintained by the same originator to maintain the
fixed price.
SEC. 15. <<NOTE: 12 USC 5914.>> REPORTS.
(a) Annual Reporting Requirement.--Beginning on the date that is 1
year after the date of enactment of this Act, and annually thereafter,
the primary Federal payment stablecoin regulators, in consultation with
State payment stablecoin regulators, as necessary, shall submit to the
Committee on Banking, Housing, and Urban Affairs of the Senate, the
Committee on Financial Services of the House of Representatives, and the
Director of the Office of Financial Research a report, which may include
a classified annex, if applicable, on the status of the payment
stablecoin industry, including--
(1) a summary of trends in payment stablecoin activities;
[[Page 139 STAT. 461]]
(2) a summary of the number of applications for approval as
a permitted payment stablecoin issuer under section 5, including
aggregate approvals and rejections of applications; and
(3) a description of the potential financial stability risks
posed to the safety and soundness of the broader financial
system by payment stablecoin activities.
(b) FSOC Report.--The Financial Stability Oversight Council shall
incorporate the findings in the report under subsection (a) into the
annual report of the Council required under section 112(a)(2)(N) of the
Financial Stability Act of 2010 (12 U.S.C. 5322(a)(2)(N)).
SEC. 16. <<NOTE: 12 USC 5915.>> AUTHORITY OF BANKING
INSTITUTIONS.
(a) Rule of Construction.--Nothing in this Act may be construed to
limit the authority of a depository institution, Federal credit union,
State credit union, national bank, or trust company to engage in
activities permissible pursuant to applicable State and Federal law,
including--
(1) accepting or receiving deposits or shares (in the case
of a credit union), and issuing digital assets that represent
those deposits or shares;
(2) utilizing a distributed ledger for the books and records
of the entity and to effect intrabank transfers; and
(3) providing custodial services for payment stablecoins,
private keys of payment stablecoins, or reserves backing payment
stablecoins.
(b) Regulatory Review.--Entities regulated by the primary Federal
payment stablecoin regulators are authorized to engage in the payment
stablecoin activities and investments contemplated by this Act,
including acting as a principal or agent with respect to any payment
stablecoin and payment of fees to facilitate customer
transactions. <<NOTE: Guidance.>> The primary Federal payment
stablecoin regulators shall review all existing guidance and
regulations, and if necessary, amend or promulgate new regulations and
guidance, to clarify that regulated entities are authorized to engage in
such activities and investments.
(c) Treatment of Custody Activities.--The appropriate Federal
banking agency, the National Credit Union Administration (in the case of
a credit union), and the Securities and Exchange Commission may not
require a depository institution, national bank, Federal credit union,
State credit union, or trust company, or any affiliate thereof--
(1) to include digital assets held in custody that are not
owned by the entity as a liability on the financial statement or
balance sheet of the entity, including payment stablecoin
custody or safekeeping activities; or
(2) to hold in custody or safekeeping regulatory capital
against digital assets and reserves backing such assets
described in section 4(a)(1)(A), except as necessary to mitigate
against operational risks inherent in custody or safekeeping
services, as determined by--
(A) the appropriate Federal banking agency;
(B) the National Credit Union Administration (in the
case of a credit union);
(C) a State bank supervisor; or
(D) a State credit union supervisor.
[[Page 139 STAT. 462]]
(d) State-chartered Depository Institutions.--
(1) In general.--A depository institution chartered under
the banking laws of a State, that has a subsidiary that is a
permitted payment stablecoin issuer, may engage in the business
of money transmission or provide custodial services through the
permitted payment stablecoin issuer in any State if such State-
chartered depository institution is--
(A) required by the laws or regulations of the home
State to establish and maintain adequate liquidity, and
such liquidity is regularly reassessed by the home State
banking supervisor to take into account any changes in
the financial condition and risk profile of the
institution, including any uninsured deposits maintained
by such institution; and
(B) required by the laws or regulations of the home
State to establish and maintain adequate capital, and
such capital is regularly reassessed by the home State
banking supervisor to take into account any changes in
the financial condition and risk profile of the
institution, including any uninsured deposits maintained
by such institution.
(2) <<NOTE: Applicability.>> Rule of construction.--Nothing
in this section shall limit, or be construed to limit, the
authority of a host State bank regulator, to perform
examinations of a depository institution's subsidiary permitted
payment stablecoin issuer or activities conducted through the
permitted payment stablecoin issuer to ensure compliance with
host State consumer protection laws that the host State bank
regulator has specific jurisdiction to enforce, which shall
apply to such institution consistent with section 7(f).
(e) Definitions.--In this section:
(1) Home state.--The term ``home State'' means the State by
which the depository institution is chartered.
(2) Host state.--The term ``host State'' means a State in
which a depository institution establishes a branch, solicits
customers, or otherwise engages in business activities, other
than the home State.
SEC. 17. AMENDMENTS TO CLARIFY THAT PAYMENT STABLECOINS ARE NOT
SECURITIES OR COMMODITIES AND PERMITTED
PAYMENT STABLECOIN ISSUERS ARE NOT
INVESTMENT COMPANIES.
(a) Investment Advisers Act of 1940.--Section 202(a)(18) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(18)) is amended by
adding at the end the following: ``The term `security' does not include
a payment stablecoin issued by a permitted payment stablecoin issuer, as
such terms are defined in section 2 of the GENIUS Act.''.
(b) Investment Company Act of 1940.--The Investment Company Act of
1940 (15 U.S.C. 80a-1 et seq.) is amended
(1) in section 2(a)(36) of the Act (15 U.S.C. 80a-2(a)(36)),
by adding at the end the following: ``The term `security' does
not include a payment stablecoin issued by a permitted payment
stablecoin issuer, as such terms are defined in section 2 of the
GENIUS Act.''; and
(2) in section 3(c)(3) of the Act (15 U.S.C. 80a-3(c)(3)),
by inserting ``any permitted payment stablecoin issuer, as such
[[Page 139 STAT. 463]]
term is defined in section 2 of the GENIUS Act;'' after
``therefor;''.
(c) Securities Act of 1933.--Section 2(a)(1) of the Securities Act
of 1933 (15 U.S.C. 77b(a)(1)) is amended by adding at the end the
following: ``The term `security' does not include a payment stablecoin
issued by a permitted payment stablecoin issuer, as such terms are
defined in section 2 of the GENIUS Act.''.
(d) Securities Exchange Act of 1934.--Section 3(a)(10) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended by
adding at the end the following: ``The term `security' does not include
a payment stablecoin issued by a permitted payment stablecoin issuer, as
such terms are defined in section 2 of the GENIUS Act.''.
(e) Securities Investor Protection Act of 1970.--Section 16(14) of
the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll(14)) is
amended by adding at the end the following: ``The term `security' does
not include a payment stablecoin issued by a permitted payment
stablecoin issuer, as such terms are defined in section 2 of the GENIUS
Act.''.
(f) Commodity Exchange Act.--Section 1a(9) of the Commodity Exchange
Act (7 U.S.C. 1a(9)) is amended by adding at the end the following:
``The term `commodity' does not include a payment stablecoin issued by a
permitted payment stablecoin issuer, as such terms are defined in
section 2 of the GENIUS Act.''.
SEC. 18. <<NOTE: Determinations. 12 USC 5916.>> EXCEPTION FOR
FOREIGN PAYMENT STABLECOIN ISSUERS AND
RECIPROCITY FOR PAYMENT STABLECOINS ISSUED
IN OVERSEAS JURISDICTIONS.
(a) In General.--The prohibitions under section 3 shall not apply to
a foreign payment stablecoin issuer if all of the following apply:
(1) The foreign payment stablecoin issuer is subject to
regulation and supervision by a foreign payment stablecoin
regulator of a foreign country, a territory of the United
States, Puerto Rico, Guam, American Samoa, or the Virgin Islands
that has a regulatory and supervisory regime with respect to
payment stablecoins that the Secretary of the Treasury
determines, pursuant to subsection (b), is comparable to the
regulatory and supervisory regime established under this Act,
including, in particular, the requirements under section 4(a).
(2) The foreign payment stablecoin issuer is registered with
the Comptroller pursuant to subsection (c).
(3) The foreign payment stablecoin issuer holds reserves in
a United States financial institution sufficient to meet
liquidity demands of United States customers, unless otherwise
permitted under a reciprocal arrangement established pursuant to
subsection (d).
(4) The foreign country in which the foreign payment
stablecoin issuer is domiciled and regulated is not subject to
comprehensive economic sanctions by the United States or in a
jurisdiction that the Secretary of the Treasury has determined
to be a jurisdiction of primary money laundering concern.
(b) Treasury Determination.--
[[Page 139 STAT. 464]]
(1) In general.--The Secretary of the Treasury may make a
determination as to whether a foreign country has a regulatory
and supervisory regime that is comparable to the requirements
established under this Act, including the requirements under
section 4(a). <<NOTE: Recommenda-tion.>> The Secretary of the
Treasury may make such a determination only upon a
recommendation from each other member of the Stablecoin
Certification Review Committee. Prior <<NOTE: Federal Register,
publication.>> to such determination taking effect, the
Secretary of the Treasury shall publish in the Federal Register
a justification for such determination, including how the
foreign country's regulatory and supervisory regime is
comparable to the requirements established under this Act,
including the requirements under section 4(a).
(2) Request.--A foreign payment stablecoin issuer or a
foreign payment stablecoin regulator may request from the
Secretary of the Treasury a determination under paragraph (1).
(3) <<NOTE: Deadline.>> Timing for determination.--If a
foreign payment stablecoin issuer or foreign payment stablecoin
regulator requests a determination under paragraph (2), the
Secretary of the Treasury shall render a decision on the
determination not later than 210 days after the receipt of a
substantially complete determination request.
(4) Rescission of determination.--
(A) In general.--The Secretary of the Treasury may,
in consultation with the Federal payment stablecoin
regulators, rescind a determination made under paragraph
(1), if the Secretary determines that the regulatory
regime of such foreign country is no longer comparable
to the requirements established under this
Act. <<NOTE: Federal Register, publication.>> Prior to
such rescission taking effect, the Secretary of the
Treasury shall publish in the Federal Register a
justification for the rescission.
(B) <<NOTE: Deadline.>> Limited safe harbor.--If
the Secretary of the Treasury rescinds a determination
pursuant to subparagraph (A), a digital asset service
provider shall have 90 days before the offer or sale of
a payment stablecoin issued by the foreign payment
stablecoin issuer that is the subject of the rescinded
determination shall be in violation of section 3.
(5) <<NOTE: List.>> Public notice.--The Secretary of the
Treasury shall keep and make publicly available a current list
of foreign countries for which a determination under paragraph
(1) has been made.
(6) <<NOTE: Deadline.>> Rulemaking.--Not later than 1 year
after the date of enactment of this Act, the Secretary of the
Treasury shall issue such rules as may be required to carry out
this section.
(c) Registration and Ongoing Monitoring.--
(1) Registration.--
(A) In general.--A foreign payment stablecoin issuer
may offer or sell payment stablecoins using a digital
asset service provider if the foreign payment stablecoin
issuer is registered with the Comptroller.
(B) <<NOTE: Effective date. Notification.>>
Registration approval.--A registration of a foreign
payment stablecoin issuer filed in accordance with this
section shall be deemed approved on the date that is 30
days after the date the Comptroller receives the
[[Page 139 STAT. 465]]
registration, unless the Comptroller notifies the
foreign payment stablecoin issuer in writing that such
registration has been rejected.
(C) Standards for rejection.--In determining whether
to reject a foreign payment stablecoin issuer's
registration, the Comptroller shall consider
(i) the final determination of the Secretary
of the Treasury under this section;
(ii) the financial and managerial resources of
the United States operations of the foreign
payment stablecoin issuer;
(iii) whether the foreign payment stablecoin
issuer will provide adequate information to the
Comptroller as the Comptroller determines is
necessary to determine compliance with this Act;
(iv) whether the foreign payment stablecoin
presents a risk to the financial stability of the
United States; and
(v) whether the foreign payment stablecoin
issuer presents illicit finance risks to the
United States.
(D) <<NOTE: Deadline. Notification.>> Procedure for
appeal.--If the Comptroller rejects a registration, not
later than 30 days after the date of receipt of such
rejection, the foreign payment stablecoin issuer may
appeal the rejection by notifying the Comptroller of the
request to appeal.
(E) Rulemaking.--Pursuant to section 13 of this Act,
the Comptroller shall issue rules relating to the
standards for approval of registration requests and the
process for appealing denials of such registration
requests.
(F) <<NOTE: List.>> Public notice.--The Comptroller
shall keep and make publicly available a current list of
foreign payment stablecoin issuer registrations that
have been approved.
(2) Ongoing monitoring.--A foreign payment stablecoin issuer
shall
(A) be subject to reporting, supervision, and
examination requirements as determined by the
Comptroller; and
(B) <<NOTE: Consent.>> consent to United States
jurisdiction relating to the enforcement of this Act.
(3) Lack of compliance.--
(A) <<NOTE: Rescission.>> Comptroller action.--The
Comptroller may, in consultation with the Secretary of
the Treasury, rescind approval of a registration of a
foreign payment stablecoin issuer under this subsection
if the Comptroller determines that the foreign payment
stablecoin issuer is not in compliance with the
requirements of this Act, including for maintaining
insufficient reserves or posing an illicit finance risk
or financial stability risk. <<NOTE: Federal Register,
publication.>> Prior to such rescission taking effect,
the Comptroller shall publish in the Federal Register a
justification for the rescission.
(B) <<NOTE: Revocation.>> Secretary action.--The
Secretary of the Treasury, in consultation with the
Comptroller, may revoke a registration of a foreign
payment stablecoin issuer under this subsection if the
Secretary determines that reasonable grounds exist for
concluding that the foreign payment stablecoin issuer
presents economic sanctions evasion, money laundering,
or other illicit finance risks, or, as applicable,
violations, or facilitation thereof.
[[Page 139 STAT. 466]]
(d) <<NOTE: Deadlines.>> Reciprocity.--
(1) <<NOTE: Contracts.>> In general.--The Secretary of the
Treasury may create and implement reciprocal arrangements or
other bilateral agreements between the United States and
jurisdictions with payment stablecoin regulatory regimes that
are comparable to the requirements established under this Act.
The Secretary of the Treasury shall consider whether the
jurisdiction's requirements for payment stablecoin issuers
include
(A) similar requirements to those under section
4(a);
(B) adequate anti-money laundering and counter-
financing of terrorism program and sanction compliance
standards; and
(C) adequate supervisory and enforcement capacity to
facilitate international transactions and
interoperability with United States dollar-denominated
payment stablecoins issued overseas.
(2) <<NOTE: Federal Register, publication.>> Publication.--
Not later than 90 days prior to the entry into force of any
arrangement or agreement under paragraph (1), the Secretary of
the Treasury shall publish the arrangement or agreement in the
Federal Register.
(3) Completion.--The Secretary of the Treasury should
complete the arrangements under this subsection not later than
the date that is 2 years after the date of enactment of this
Act.
SEC. 19. DISCLOSURE RELATING TO PAYMENT STABLECOINS.
Section 13104(a)(3) of title 5, United States Code, is amended, in
the first sentence, by striking ``, or any deposits'' and inserting ``,
any payment stablecoins issued by a permitted payment stablecoin issuer
aggregating $5,000 or less held, or any deposits''.
SEC. 20. <<NOTE: 12 USC 5901 note.>> EFFECTIVE DATE.
This Act, and the amendments made by this Act, shall take effect on
the earlier of
(1) the date that is 18 months after the date of enactment
of this Act; or
(2) the date that is 120 days after the date on which the
primary Federal payment stablecoin regulators issue any final
regulations implementing this Act.
Approved July 18, 2025.
LEGISLATIVE HISTORY--S. 1582:
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CONGRESSIONAL RECORD, Vol. 171 (2025):
May 21, June 2, 9, 11, 12, 17, considered and passed Senate.
July 17, considered and passed House.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2025):
July 18, Presidential remarks.
<all>
Message on Senate action sent to the House.
Received in the House.
Held at the desk.
Rules Committee Resolution H. Res. 580 Reported to House. Rule provides for consideration of H.R. 4016, H.R. 3633, H.R. 1919 and S. 1582. The resolution provides for consideration of H.R. 4016 and H.R. 3633 under a structured rule, and H.R. 1919 and S. 1582 under a closed rule, with one hour of general debate on each bill. The resolution provides for a motion to recommit on H.R. 4016, H.R. 3633, and H.R. 1919, and a motion to commit on S. 1582.
Rule H. Res. 580 passed House.
Considered under the provisions of rule H. Res. 580. (consideration: CR H3405-3427)
Rule provides for consideration of H.R. 4016, H.R. 3633, H.R. 1919 and S. 1582. The resolution provides for consideration of H.R. 4016 and H.R. 3633 under a structured rule, and H.R. 1919 and S. 1582 under a closed rule, with one hour of general debate on each bill. The resolution provides for a motion to recommit on H.R. 4016, H.R. 3633, and H.R. 1919, and a motion to commit on S. 1582.
DEBATE - The House proceeded with one hour of debate on S. 1582.
The previous question was ordered pursuant to the rule.
POSTPONED PROCEEDINGS - At the conclusion of debate on S. 1582, the Chair put the question on passage of the bill and by voice vote, announced that the ayes had prevailed. Ms. Waters demanded the yeas and nays and the Chair postponed further proceedings until a time to be announced.
Enacted as Public Law 119-27
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Considered as unfinished business. (consideration: CR H3449-3450)
Passed/agreed to in House: On passage Passed by the Yeas and Nays: 308 - 122 (Roll no. 200).
Roll Call #200 (House)On passage Passed by the Yeas and Nays: 308 - 122 (Roll no. 200). (text: CR H3405-3418)
Roll Call #200 (House)Motion to reconsider laid on the table Agreed to without objection.
Presented to President.
Presented to President.
Signed by President.
Signed by President.
Became Public Law No: 119-27.
Became Public Law No: 119-27.