[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2392 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 2392
To provide for the regulation of payment stablecoins, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 26, 2025
Mr. Steil (for himself, Mr. Hill of Arkansas, Mr. Torres of New York,
Mr. Emmer, Mr. Huizenga, Mr. Meuser, Mrs. Kim, Mr. Moore of North
Carolina, Mr. Downing, Mr. Haridopolos, Mr. Gottheimer, and Mr.
Liccardo) introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To provide for the regulation of payment stablecoins, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Stablecoin Transparency and
Accountability for a Better Ledger Economy Act of 2025'' or the
``STABLE Act of 2025''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Appropriate federal banking agency.--The term
``appropriate Federal banking agency'' has the meaning given
that term under 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
Comptroller of the Currency.
(5) Corporation.--The term ``Corporation'' means the
Federal Deposit Insurance Corporation.
(6) Credit union terms.--The terms ``Federal credit
union'', ``insured credit union'', and ``State credit union''
have the meanings given those terms, respectively, in section
101 of the Federal Credit Union Act (12 U.S.C. 1752).
(7) Digital asset.--The term ``digital asset'' means any
digital representation of value which is recorded on a
cryptographically-secured distributed ledger.
(8) Distributed ledger.--The term ``distributed ledger''
means technology where data is shared across a network that
creates a public digital ledger of verified transactions or
information among network participants and the data is linked
using cryptography to maintain the integrity of the public
digital ledger and execute other functions.
(9) Federal qualified nonbank payment stablecoin issuer.--
The term ``Federal qualified nonbank payment stablecoin
issuer'' means a subsidiary of a nonbank entity approved by the
primary Federal payment stablecoin regulator, pursuant to
section 5, to issue payment stablecoins.
(10) Institution-affiliated party.--With respect to a
permitted payment stablecoin issuer, the term ``institution-
affiliated party'' means any director, officer, employee, or
person in control of, or agent for, the permitted payment
stablecoin issuer.
(11) Insured depository institution.--The term ``insured
depository institution'' means--
(A) an insured depository institution, as defined
in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813); and
(B) an insured credit union.
(12) Monetary value.--The term ``monetary value''--
(A) means--
(i) a national currency;
(ii) a deposit (as defined in section 3 of
the Federal Deposit Insurance Act (12 U.S.C.
1813)) that is denominated in a national
currency; or
(iii) an account (as defined in section 101
of the Federal Credit Union Act (12 U.S.C.
1752)); and
(B) does not include any agricultural or other
physical commodity (as defined in section 1a of the
Commodity Exchange Act (7 U.S.C. 1a).
(13) National currency.--The term ``national currency''
means 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)), money standing to the credit of an account
with a Federal reserve bank, money issued by a central bank,
and money issued by an intergovernmental organization pursuant
to an agreement by one or more governments.
(14) Nonbank entity.--The term ``nonbank entity'' means a
person that is not an insured depository institution or
subsidiary of an insured depository institution.
(15) Payment stablecoin.--The term ``payment stablecoin''
means a digital asset--
(A) that is or is designed to be used as a means of
payment or settlement;
(B) that is denominated in a national currency;
(C) the issuer of which--
(i) is obligated to convert, redeem, or
repurchase for a fixed amount of monetary
value; or
(ii) represents that the digital asset will
maintain or creates the reasonable expectation
that the digital asset will maintain a stable
value relative to the value of a fixed amount
of monetary value; and
(D) that is not--
(i) a national currency;
(ii) a security issued by--
(I) an investment company
registered under section 8(a) of the
Investment Company Act of 1940 (15
U.S.C. 80a-8(a)); or
(II) a person that would be an
investment company under the Investment
Company Act of 1940 but for paragraphs
(1) and (7) of section 3(c) of that Act
(15 U.S.C. 80a-3(c));
(iii) a deposit (as defined under section 3
of the Federal Deposit Insurance Act (12 U.S.C.
1813)), regardless of the technology used to
record such deposit; or
(iv) an account (as defined in section 101
of the Federal Credit Union Act (12 U.S.C.
1752)), regardless of the technology used to
record such account.
(16) Permitted payment stablecoin issuer.--The term
``permitted payment stablecoin issuer'' means--
(A) a subsidiary of an insured depository
institution that has been approved to issue payment
stablecoins under section 5;
(B) a Federal qualified nonbank payment stablecoin
issuer; or
(C) a State qualified payment stablecoin issuer.
(17) Person.--The term ``person'' means an individual,
partnership, company, corporation, association (incorporated or
unincorporated), trust, estate, cooperative organization, or
other entity.
(18) Primary federal payment stablecoin regulator.--
(A) In general.--The term ``primary Federal payment
stablecoin regulator'' means--
(i) with respect to an insured depository
institution (other than an insured credit
union) or a subsidiary of an insured depository
institution (other than an insured credit
union), the appropriate Federal banking agency
of such insured depository institution;
(ii) with respect to an insured credit
union or a subsidiary of an insured credit
union, the National Credit Union
Administration;
(iii) with respect to a Federal qualified
nonbank payment stablecoin issuer and any
nonbank entity that seeks to have a subsidiary
approved as a Federal qualified nonbank payment
stablecoin issuer, the Comptroller; and
(iv) with respect to any entity chartered
by the Comptroller, the Comptroller.
(B) Primary federal payment stablecoin
regulators.--The term ``primary Federal payment
stablecoin regulators'' means the Comptroller, the
Board, the Corporation, and the National Credit Union
Administration.
(19) Registered public accounting firm.--The term
``registered public accounting firm'' has the meaning given
that term under section 2 of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7201).
(20) State.--The term ``State'' means each of the several
States, the District of Columbia, and each territory of the
United States.
(21) State qualified payment stablecoin issuer.--The term
``State qualified payment stablecoin issuer'' means an entity
that--
(A) is approved to issue payment stablecoins by a
State payment stablecoin regulator;
(B) issues a payment stablecoin in compliance with
the laws and regulations of a State regulatory regime
certified under section 4(b); and
(C) is not--
(i) chartered by the Comptroller;
(ii) a Federal credit union; or
(iii) a subsidiary of a State credit union
that--
(I) has at least a partial
ownership interest or loan from a
Federal credit union; or
(II) has at least a partial
ownership interest or loan from a State
credit union that is organized in a
different State than such subsidiary.
(22) State payment stablecoin regulator.--The term ``State
payment stablecoin regulator'' means--
(A) a State agency that has primary regulatory and
supervisory authority in such State over entities that
issue payment stablecoins; and
(B) with respect to a State qualified payment
stablecoin issuer that is a subsidiary of a State-
chartered depository institution (as defined in section
3 of the Federal Deposit Insurance Act (12 U.S.C.
1813)) or a State credit union, the State agency that
has primary regulatory and supervisory authority over
entities that issue payment stablecoins in the State in
which such State-chartered depository institution or
State credit union is chartered.
(23) Subsidiary of an insured credit union.--With respect
to an insured credit union, the term ``subsidiary of an insured
credit union'' means--
(A) an organization providing services to the
insured credit union that are associated with the
routine operations of credit unions, as described under
section 107(7)(I) of the Federal Credit Union Act (12
U.S.C. 1757(7)(I));
(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) any subsidiary of an insured credit union that
is a State credit union.
SEC. 3. LIMITATION ON WHO MAY ISSUE A PAYMENT STABLECOIN.
(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) Limitation on Offering or Selling.--
(1) In general.--After the end of the 2-year period
beginning on the date of enactment of this Act, it shall be
unlawful for any custodial intermediary to offer or sell a
payment stablecoin in the United States unless the payment
stablecoin was issued by a permitted payment stablecoin issuer.
(2) Exceptions for comparable payment stablecoin regimes.--
(A) In general.--Paragraph (1) and subsection (a)
shall not apply to the offer or sale of a payment
stablecoin if--
(i) the payment stablecoin was issued by a
foreign payment stablecoin issuer;
(ii) the foreign payment stablecoin issuer
is subject to regulation by a foreign payment
stablecoin regulator of a nation with a payment
stablecoin regulatory regime that the Secretary
of the Treasury determines under subparagraph
(B) is comparable to the requirements under
this Act; and
(iii) the foreign payment stablecoin issuer
consents to be subject to reporting and
examination requirements, as determined by--
(I) the Comptroller, if the foreign
payment stablecoin issuer is a nonbank;
or
(II) the Board, if the foreign
payment stablecoin issuer is a banking
institution or subsidiary thereof.
(B) Determination.--With respect to a foreign
nation, the Secretary of the Treasury shall determine,
upon request of a foreign payment stablecoin issuer, a
foreign payment stablecoin regulator, or on the
Secretary's own initiative, and in consultation with
the Federal payment stablecoin regulators, whether the
payment stablecoin regulatory regime of such nation is
comparable to the requirements under this Act.
(C) Public notice.--The Secretary shall make the
list of nations for which a determination has been made
under subparagraph (B) available to the public, and
keep such list current.
(D) Rescinding determinations.--
(i) Secretarial action.--The Secretary may,
in consultation with the primary Federal
payment stablecoin regulators, rescind a
determination made under subparagraph (B) with
respect to a foreign nation, if the Secretary
determines that the regulatory regime of such
nation is no longer comparable to the
requirements under this Act.
(ii) Safeharbors.--If the Secretary
rescinds a determination pursuant to clause
(i), a custodial intermediary shall not be in
violation of this subsection by reason of the
offer or sale of a payment stablecoin issued by
such nation's foreign payment stablecoin issuer
until 90 days after the determination is
rescinded.
(3) Penalty.--Any person who violates this subsection shall
be subject to a civil penalty of not more than $100,000 for
each day during which such violation continues.
(c) Rulemaking.--Not later than 12 months after the date of
enactment of this Act, the Secretary shall issue such rules as may be
required to carry out this section.
(d) Rule of Construction.--This section does not apply to
transactions in digital assets for an individual's own lawful purposes
by means of a software or hardware wallet that facilitates such
individual's own custody of digital assets.
SEC. 4. REQUIREMENTS FOR ISSUING PAYMENT STABLECOINS.
(a) Standards for the Issuance of Payment Stablecoins.--
(1) In general.--Each permitted payment stablecoin issuer
shall--
(A) maintain reserves backing the issuer's
outstanding payment stablecoins on an at least 1 to 1
basis, with reserves comprising--
(i) United States 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) at insured depository
institutions (including foreign branches and
agencies of insured depository institutions) or
approved foreign depository institutions (as
defined in paragraph (5)(v)) or share drafts
(or other deposits that may be withdrawn upon
request at any time) at insured credit unions,
subject to limitations established by the
Corporation and the National Credit Union
Administration, respectively, to address safety
and soundness risks of such insured depository
institutions;
(iii) Treasury bills, notes, or bonds--
(I) with a remaining maturity of 93
days or less; or
(II) issued with a maturity of 93
days or less;
(iv) repurchase agreements, wherein the
permitted payment stablecoin issuer is acting
as a seller of securities, or reverse
repurchase agreements, wherein the permitted
payment stablecoin issuer is acting as a
purchaser of securities, with an overnight
maturity and that are backed by Treasury bills
with a maturity of 93 days or less that are--
(I) centrally cleared through a
clearing agency registered with the
Securities and Exchange Commission; or
(II) bilateral, settling either
through delivery versus payment or
through a tri-party control account,
with a counterparty that the issuer has
determined to be adequately credit
worthy even in the event of severe
market stress; or
(v) securities issued by an investment
company under section 8(a) of the Investment
Company Act of 1940 that operates as a money
market fund in compliance with Rule 2a-7 under
the Investment Company Act of 1940 (or any
successor rule) and that are invested solely in
the underlying assets described in clauses (i)
through (iv) and (vi);
(B) publicly disclose the issuer's redemption
policy;
(C) establish procedures for timely redemption of
the issuer's outstanding payment stablecoins; and
(D) publish a report on the monthly composition of
the issuer's reserves on the website of the issuer,
containing--
(i) the total number of outstanding payment
stablecoins issued by the issuer; and
(ii) the amount and composition of the
reserves described under subparagraph (A).
(2) Eligibility.--The requirements to maintain reserves
under paragraph (1)(A) may not be construed as expanding or
contracting eligibility to qualify as a depository institution
under section 19(b)(1)(A) of the Federal Reserve Act (12 U.S.C.
461(b)(1)(A)).
(3) Prohibition on rehypothecation.--Reserves described
under paragraph (1)(A) may not be pledged, rehypothecated, or
reused, except for the purpose of satisfying obligations
associated with reserves described under paragraph (1)(A)(iv)
if the permitted payment stablecoin issuer receives the prior
approval of the primary Federal payment stablecoin regulator or
the State payment stablecoin regulator.
(4) 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 an independent
registered public accounting firm.
(B) Certification.--Each month, the Chief Executive
Officer and Chief Financial Officer of a permitted
payment stablecoin issuer shall submit to, as
applicable, the primary Federal payment stablecoin
regulator or, in the case of a State qualified payment
stablecoin issuer, the State payment stablecoin
regulator, a certification that, based on such
officers' knowledge, the previous month-end report
required under paragraph (1)(D)--
(i) does not contain any untrue statement
of material fact or omit to state a material
fact necessary in order to make the statements
made, in light of the circumstances under which
such statements were made, not misleading; and
(ii) fairly presented in all material
respects the information required under
paragraph (1)(D) for the period presented in
such report.
(C) Criminal penalties.--Whoever--
(i) submits a certification set forth in
subparagraph (B) knowing that the report to
which the certification relates does not fairly
present, in all material respects, the
information required to be contained in such
report shall be fined not more than $1,000,000
or imprisoned not more than 10 years, or both;
or
(ii) willfully submits a certification set
forth in subparagraph (B) knowing that the
report to which the certification relates does
not fairly present, in all material respects,
the information required to be contained in
such report shall be fined not more than
$5,000,000, or imprisoned not more than 20
years, or both.
(5) Capital, liquidity, risk management, and other
requirements.--
(A) In general.--The primary Federal payment
stablecoin regulators shall, jointly and in
consultation with the State payment stablecoin
regulators, issue rules to establish--
(i) capital requirements applicable to a
permitted payment stablecoin issuer that--
(I) are tailored to the business
model and risk profile of a permitted
payment stablecoin issuer;
(II) do not exceed requirements
which are sufficient to ensure the
ongoing operations of a permitted
payment stablecoin issuer; and
(III) if such regulators determine
that a capital buffer is necessary to
ensure the ongoing operations of a
permitted payment stablecoin issuer,
may include capital buffers that are
tailored to the business model and risk
profile of a permitted payment
stablecoin issuer;
(ii) requirements implementing liquidity
standards applicable to reserves described in
paragraph (1) for a permitted payment
stablecoin issuer, which may not exceed an
amount that is sufficient to ensure the
financial integrity of a permitted payment
stablecoin issuer and the ability of the issuer
to meet the financial obligations of the
issuer, including redemptions;
(iii) reserve asset diversification and
interest rate risk management standards
applicable to a permitted payment stablecoin
issuer that--
(I) are tailored to the business
model and risk profile of a permitted
payment stablecoin issuer; and
(II) do not exceed standards which
are sufficient to ensure the ongoing
operations of a permitted payment
stablecoin issuer; and
(iv) appropriate operational, compliance,
information technology, and cybersecurity risk
management standards that are tailored to the
business model and risk profile of a permitted
payment stablecoin issuer; and
(v) requirements regarding the approval of
foreign depository institutions that may hold
demand deposits of a permitted payment
stablecoin issuer.
(B) Rule of construction.--Nothing in this
paragraph may 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 permitted payment
stablecoin issuers on an individualized basis
or by category, taking into consideration the
capital structure, business model risk profile,
complexity, financial activities, size, and any
other risk related factors of permitted payment
stablecoin issuers that the primary Federal
payment stablecoin regulators determine
appropriate; or
(ii) the supervisory, regulatory, or
enforcement authority of a Federal banking
agency (as defined in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813)) or the
National Credit Union Administration to further
the ability of an institution under the
supervision of the Federal banking agency or
the National Credit Union Administration to
maintain safe and sound operations or comply
with this Act.
(C) Applicability of existing capital standards.--
(i) Applicability of the financial
stability act of 2010.--Section 171 of the
Financial Stability Act of 2010 (12 U.S.C.
5371) shall not apply to requirements issued
under this paragraph.
(ii) Rules relating to leverage capital
requirements or risk-based capital
requirements.--Where an insured depository
institution or depository institution holding
company, as defined under section 171(a)(3) of
the Financial Stability Act of 2010 (12 U.S.C.
5371(a)(3)), includes, on a consolidated basis,
a permitted payment stablecoin issuer, any rule
issued by an appropriate Federal banking agency
that imposes, on a consolidated basis, a
leverage capital requirement or risk-based
capital requirement on such insured depository
institution or depository institution holding
company, shall not require such insured
depository institution or depository
institution holding company to hold, with
respect to the permitted payment stablecoin
issuer and its assets and operations, any
amount of regulatory capital in excess of the
capital that such permitted payment stablecoin
issuer must maintain under the capital
requirements promulgated pursuant to paragraph
(5)(A)(i).
(iii) Rulemaking.--Not later than the date
the primary Federal payment stablecoin
regulators issue regulations to carry out this
section, each Federal banking agency, as
defined in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813), shall amend or
otherwise modify any regulation described in
clause (ii) so that it complies with such
clause (ii).
(6) Treatment under the bank secrecy act.--A permitted
payment stablecoin issuer shall be treated as a financial
institution for purposes of the Bank Secrecy Act.
(7) Limitation on payment stablecoin activities.--A
permitted payment stablecoin issuer may only--
(A) issue payment stablecoins;
(B) redeem payment stablecoins;
(C) manage related reserves (including purchasing,
selling, and holding reserve assets);
(D) provide custodial or safekeeping services for
payment stablecoins and private keys of payment
stablecoins;
(E) provide custodial or safekeeping services for
reserves, consistent with this Act;
(F) undertake other functions that directly support
activities described in subparagraphs (A) through (E);
and
(G) undertake such non-payment stablecoin
activities that are allowed by the primary Federal
payment stablecoin regulator.
(8) Prohibition on yield.--A permitted payment stablecoin
issuer may not pay interest or yield to holders of its payment
stablecoins.
(9) Regulation of federal qualified nonbank payment
stablecoin issuers by the comptroller.--A Federal qualified
nonbank payment stablecoin issuer shall be regulated and
supervised exclusively by the Comptroller.
(b) State-Level Regulatory Regimes.--
(1) In general.--A State qualified payment stablecoin
issuer may only issue payment stablecoins pursuant to the
regulation of a State payment stablecoin regulator of a State
with a regulatory regime for issuing payment stablecoins that
is certified under this subsection as meeting or exceeding the
standards and requirements described in subsection (a).
(2) Certification.--
(A) In general.--Beginning on the date that is 1
year after the date of enactment of this Act or 60 days
after the rulemaking described in subsection (d) is
completed, whichever is earlier, a State payment
stablecoin regulator may submit to the Secretary of the
Treasury a certification that the regulatory regime of
the State for issuing payment stablecoins meets or
exceeds the standards and requirements described in
subsection (a).
(B) Validity of certification.--A certification
under subparagraph (A) shall be valid upon submission
and remain valid unless the Secretary of the Treasury
rejects the certification under paragraph (6).
(3) Form of certification.--A certification described under
paragraph (2)--
(A) shall contain an attestation that the
regulatory regime of the State for issuing payment
stablecoins meets or exceeds the standards and
requirements described in subsection (a); and
(B) may include supporting information, such as a
copy of any State law or regulation implementing such
standards and requirements.
(4) Report and attestation.--
(A) In general.--A State payment stablecoin
regulator with a valid certification under this
subsection that has made subsequent material changes to
its State regulatory regime and wishes to maintain a
valid certification shall submit to the Secretary of
the Treasury an explanation of all such material
changes.
(B) Form of material changes explanation.--With
respect to a State payment stablecoin regulator that
submits an explanation of material changes to the State
regulatory regime under subparagraph (A), the payment
stablecoin regulator shall make such explanation in the
same manner, and containing the same attestation, as
described under paragraph (3) for a certification.
(5) Advisory opinions on proposed laws or regulations.--
Upon request of any State payment stablecoin regulator, the
Secretary of the Treasury shall--
(A) review any proposed law or regulation of the
State provided by the State payment stablecoin
regulator; and
(B) not later than 30 days after being provided the
proposed law or regulation, either--
(i) inform the State payment stablecoin
regulator that the proposed law or regulation
is consistent with a State regulatory regime
for issuing payment stablecoins that meets or
exceeds the standards and requirements
described in subsection (a); or
(ii) provide the State payment stablecoin
regulator with a detailed explanation of why
the proposed law or regulation is not
consistent with a State regulatory regime for
issuing payment stablecoins that meets or
exceeds the standards and requirements
described in subsection (a).
(6) Regimes that are not substantially similar.--
(A) In general.--The Secretary of the Treasury may
reject a certification under paragraph (3) or a
certification with respect to which a State payment
stablecoin regulator has submitted an explanation of
material changes under paragraph (4), if the Secretary,
not later than 30 days after the date on which the
initial certification or explanation of material
changes is submitted--
(i) determines that the State regulatory
regime does not meet or exceed the standards
and requirements described in subsection (a);
and
(ii) provides the State payment stablecoin
regulator with a written explanation for the
rejection, describing the reasoned basis for
the rejection with sufficient detail such that
the State can bring the State regulatory regime
into compliance based on the explanation.
(B) Opportunity to cure.--
(i) In general.--With respect to a
rejection described under subparagraph (A), the
Secretary of the Treasury shall provide the
State payment stablecoin regulator with not
less than a 180-day period from the date on
which the State payment stablecoin regulator is
notified of such rejection to--
(I) make such changes as may be
necessary to ensure the regulatory
regime of the State for issuing payment
stablecoins meets or exceeds the
standards and requirements described in
subsection (a); and
(II) resubmit the certification or
explanation of material changes.
(ii) Rejection.--If, after a State payment
stablecoin regulator makes changes described
under clause (i) during the period described in
clause (i), the Secretary of the Treasury
determines that the certification should be
rejected, the Secretary of the Treasury shall,
not later than 30 days after such
determination, provide the State payment
stablecoin regulator with a written explanation
for the determination, describing the reasoned
basis for the determination with sufficient
detail such that the State can bring its regime
into compliance based on the explanation.
(C) Appeal of rejection.--
(i) In general.--A State payment stablecoin
regulator that has had a certification rejected
under this paragraph may, after the cure period
described under subparagraph (B)(i), appeal
such rejection to the United States Court of
Appeals for the District of Columbia Circuit,
which shall, upon a determination that the
regulatory regime of the State for issuing
payment stablecoins meets or exceeds the
standards and requirements described in
subsection (a), reverse such rejection.
(ii) Review by the supreme court.--The
judgment and decree of the Court of Appeals
shall be final, except that the same shall be
subject to review by the Supreme Court upon
certiorari, as provided in section 1254 of
title 28.
(D) Right to resubmit.--A State payment stablecoin
regulator that has had a certification rejected under
this paragraph may resubmit a new certification under
paragraph (2).
(7) Appropriate exemptive relief.--The Secretary of the
Treasury shall issue such rules and orders as are necessary to
provide appropriate exemptive relief and safe harbors for State
qualified payment stablecoin issuers to continue operations
during such periods in which any rules promulgated pursuant to
subsection (a) materially affect a previously certified State
regulatory regime's ability to meet or exceed the standards and
requirements described in subsection (a).
(c) Not Insured by the Federal Government; Misrepresentation of
Insured Status.--
(1) In general.--Payment stablecoins are not backed by the
full faith and credit of the United States, guaranteed by the
United States Government, subject to deposit insurance by the
Corporation, or subject to share insurance by the National
Credit Union Administration.
(2) Misrepresentation of insured status.--It shall be
unlawful to represent that a payment stablecoin is 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.
(3) Disclosure.--Permitted payment stablecoin issuers shall
clearly and prominently disclose on their website that payment
stablecoins issued by such permitted payment stablecoin issuer
are not guaranteed by the United States Government, covered by
deposit insurance by the Federal Deposit Insurance Corporation,
or by share insurance of the National Credit Union
Administration.
(4) Penalties.--Any person who violates this subsection may
be prosecuted to the fullest extent of the law, including, as
applicable, under--
(A) section 18(a)(4) of the Federal Deposit
Insurance Act (relating to the prohibition on false
advertising in connection with deposit insurance, the
misuse of FDIC names, and misrepresentations of insured
status);
(B) section 709 of title 18, United States Code
(relating to false advertising or misuse of names to
indicate a Federal agency);
(C) criminal penalties under title 18, United
States Code, related to fraud; and
(D) other remedies available under the law.
(d) Officers and Directors Convicted of Certain Felonies.--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--
(1) an officer of a payment stablecoin issuer; or
(2) a director of a payment stablecoin issuer.
(e) Rulemaking.--
(1) In general.--The primary Federal payment stablecoin
regulators may issue such orders and regulations as may be
necessary to administer and carry out the requirements of this
section, including to establish conditions, and to prevent
evasions thereof.
(2) Joint issuance of regulation.--All regulations issued
to carry out this section by the primary Federal payment
stablecoin regulators shall be issued jointly, after
consultation with State payment stablecoin regulators.
(3) Rulemaking deadline.--Not later than the end of the
180-day period beginning on the date of enactment of this Act,
the Federal payment stablecoin regulators shall issue
regulations to carry out this section.
SEC. 5. APPROVAL OF SUBSIDIARIES OF INSURED DEPOSITORY INSTITUTIONS AND
SUBSIDIARIES OF NONBANK ENTITIES.
(a) In General.--
(1) Application.--
(A) In general.--The primary Federal payment
stablecoin regulator shall receive, review, and
consider for approval applications from any insured
depository institution that seeks to issue payment
stablecoins through a subsidiary and any nonbank entity
that seeks to issue payment stablecoins through a
subsidiary.
(B) Sharing of information.--With respect to
applications submitted by State-chartered insured
depository institutions, the primary Federal payment
stablecoin regulator shall share such applications with
the relevant State bank or State credit union
supervisor.
(C) Completion of application.--
(i) In general.--The primary Federal
payment stablecoin regulator shall consider an
application complete if such application
contains sufficient information for the primary
Federal payment stablecoin regulator to render
a decision on whether the application meets the
requirements set forth in section 4.
(ii) Material change in circumstances.--An
application described under clause (i) that is
considered complete shall remain complete
unless the primary Federal payment stablecoin
regulator determines that a material change in
circumstances requires otherwise.
(2) Evaluation of applications.--A complete application
received under paragraph (1) shall be evaluated by the primary
Federal payment stablecoin regulator based on the ability of
the subsidiary of the applicant to meet the requirements set
forth in section 4.
(3) Timing for decision; grounds for denial.--
(A) Timing.--The primary Federal payment stablecoin
regulator shall--
(i) not later than 30 days after receiving
the application--
(I) inform the applicant whether
the applicant has submitted a complete
application; and
(II) if the application is not
complete, inform the applicant of the
additional information the applicant
must provide in order for the
application to be considered complete;
and
(ii) not later than 120 days after
informing the applicant that the application is
complete, render a decision on an application.
(B) Denial of application.--
(i) Grounds for denial.--
(I) In general.--The primary
Federal payment stablecoin regulator
may only deny a complete application
received under paragraph (1) if the
regulator determines that the
activities of the applicant would be
unsafe or unsound based on the ability
of the subsidiary of the applicant to
meet the requirements set forth in
section 4.
(II) Treatment of certain
issuances.--The issuance of a payment
stablecoin on an open, public, and
decentralized network shall not be a
valid ground for denial of an
application received under paragraph
(1).
(ii) Explanation required.--If the primary
Federal payment stablecoin regulator denies a
complete application received under paragraph
(1), the regulator shall, not later than 30
days after the date of such denial, provide the
applicant with--
(I) written notice explaining the
denial with specificity, including all
findings made by the regulator with
respect to all identified material
shortcomings in the application; and
(II) actionable recommendations on
how the applicant could address the
identified material shortcomings.
(iii) 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 subsection, the applicant
may request, in writing, an opportunity
for a written or oral hearing before
the primary Federal payment stablecoin
regulator to appeal the denial.
(II) Timing.--Upon receipt of a
timely request, the primary Federal
payment stablecoin regulator shall
notice a time (not later than 30 days
after the date of receipt of the
request) and place at which the
applicant may appear, personally or
through counsel, to appeal the denial,
to submit written materials, or to
provide oral testimony and oral
argument.
(III) Final determination.--Not
later than 60 days after the date of a
hearing under this clause, the primary
Federal payment stablecoin regulator
shall notify the applicant of the final
determination of the primary Federal
payment stablecoin regulator with
respect to the appeal, which shall
contain a statement of the basis for
such determination, with specific
findings.
(IV) Notice if no hearing.--If an
applicant does not make a timely
request for a hearing under this
clause, the primary Federal payment
stablecoin regulator shall notify the
applicant, not later than 10 days after
the date by which the applicant may
request a hearing under this clause, in
writing, that the denial of the
application is a final determination of
the primary Federal payment stablecoin
regulator.
(C) Failure to render a decision.--If the primary
Federal payment stablecoin regulator fails to render a
decision on a complete application within the time
period specified in subparagraph (A), the application
shall be deemed approved.
(D) Right to reapply.--The denial of an application
under this subsection shall not prohibit the applicant
from filing a subsequent application.
(4) Report on pending applications.--Each of the primary
Federal payment stablecoin regulators shall annually report to
Congress on--
(A) the number of calendar days each applicant
waited for either an approval or denial of an
application under this subsection;
(B) the number of calendar days each applicant with
an outstanding application has waited for a decision;
and
(C) the number of applications that have been
pending for 6 months or longer since the date of the
initial application filed under paragraph (1) where the
applicant has been informed that the application
remains incomplete, including providing documentation
on the status of the application and why the
application has not yet been approved.
(5) Rulemaking.--
(A) In general.--Not later than 180 days after the
date of enactment of this Act, the primary Federal
payment stablecoin regulators shall, jointly, issue
rules to carry out this section, which may only relate
to the application process under this subsection and
may not implement the requirements set forth in section
4.
(B) Tailoring of rules.--The joint rulemaking
required under subparagraph (A) shall be tailored so as
to minimize any incremental burden placed on well
capitalized and highly-rated insured depository
institutions.
(b) Effective Date.--
(1) In general.--This section shall take effect on the
earlier of--
(A) 12 months after the date of enactment of this
Act; or
(B) the date that is 120 days after the date on
which the primary Federal payment stablecoin regulators
issue final regulations implementing this section.
(2) Notice to congress.--Each of the primary Federal
payment stablecoin regulators shall notify Congress upon
receiving their first application.
(c) Effect on State Law for Payment Stablecoin Issuers Approved by
Federal Payment Stablecoin Regulators Under This Section.--The
provisions of this section preempt any conflicting State law and
supersede any State licensing requirement for any nonbank entity or
subsidiary of an insured depository institution or credit union that is
approved under this section to be a permitted payment stablecoin
issuer.
SEC. 6. SUPERVISION AND ENFORCEMENT WITH RESPECT TO SUBSIDIARIES OF
INSURED DEPOSITORY INSTITUTIONS AND FEDERAL QUALIFIED
NONBANK PAYMENT STABLECOIN ISSUERS.
(a) Supervision.--
(1) Subsidiary of an insured depository institution.--
(A) In general.--Each permitted payment stablecoin
issuer that is a subsidiary of an insured depository
institution shall be subject to supervision by the
primary Federal payment stablecoin regulator in the
same manner as such insured depository institution.
(B) Gramm-Leach-Bliley act.--For purposes of title
V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et
seq.) each permitted payment stablecoin issuer that is
a subsidiary of an insured depository institution shall
be deemed a financial institution.
(2) Federal qualified nonbank payment stablecoin issuer.--
(A) Submission of reports.--Each Federal qualified
nonbank payment stablecoin issuer shall, upon request,
submit reports to the Comptroller as to--
(i) the financial condition of the Federal
qualified nonbank payment stablecoin issuer;
(ii) the systems of the Federal qualified
nonbank payment stablecoin issuer for
monitoring and controlling financial and
operating risks; and
(iii) compliance with this Act and
regulations issued pursuant to this Act by the
Federal qualified nonbank payment stablecoin
issuer.
(B) Examinations.--The Comptroller may examine a
Federal qualified nonbank payment stablecoin issuer in
order to inform the Comptroller of--
(i) the nature of the operations and
financial condition of the Federal qualified
nonbank payment stablecoin issuer;
(ii) the financial, operational, and other
risks within the Federal qualified nonbank
payment stablecoin issuer that may pose a
threat to--
(I) the safety and soundness of the
Federal qualified nonbank payment
stablecoin issuer; or
(II) the stability of the financial
system of the United States;
(iii) the systems of the Federal qualified
nonbank payment stablecoin issuer for
monitoring and controlling the risks described
in clause (ii);
(iv) the compliance of the Federal
qualified nonbank payment stablecoin issuer
with this Act and regulations issued pursuant
to this Act; and
(v) the compliance of the Federal qualified
nonbank payment stablecoin issuer with the
requirements of the Bank Secrecy Act and laws
authorizing the imposition of sanctions and
implemented by the Secretary of the Treasury.
(C) Requirements for efficiency.--In supervising
and examining a Federal qualified nonbank payment
stablecoin issuer, the Comptroller shall, to the
fullest extent possible, use existing reports and other
supervisory information.
(D) Avoidance of duplication.--The Comptroller
shall, to the fullest extent possible, avoid
duplication of examination activities, reporting
requirements, and requests for information in carrying
out this Act with respect to a Federal qualified
nonbank payment stablecoin issuer.
(E) Gramm-Leach-Bliley act.--For purposes of title
V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et
seq.) each Federal qualified nonbank payment stablecoin
issuer shall be deemed a financial institution.
(b) Enforcement.--
(1) Suspension or revocation of registration.--The primary
Federal payment stablecoin regulator may prohibit a 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--
(A) materially violating or has materially violated
this Act or any regulation or order issued under this
Act, including the issuer's obligations under the
section 4(a)(6); or
(B) materially violating or has materially violated
any condition imposed in writing by the primary Federal
payment stablecoin regulator in connection with a
written agreement entered into between the permitted
payment stablecoin issuer and the primary Federal
payment stablecoin regulator.
(2) Cease-and-desist proceedings.--If the primary Federal
payment stablecoin regulator has reasonable cause to believe
that a permitted payment stablecoin issuer or any institution-
affiliated party of a 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 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 may remove an institution-
affiliated party of a permitted payment stablecoin issuer from
their position or office or prohibit further participation in
the affairs of the permitted payment stablecoin issuer or all
permitted payment stablecoin issuers by such institution-
affiliated party, if the primary Federal payment stablecoin
regulator determines that--
(A) the institution-affiliated party has, directly
or indirectly, 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 committed
a violation of any provision of subchapter II of
chapter 53 of title 31, United States Code.
(4) Procedures.--
(A) In general.--If the 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, as applicable,
in--
(i) subsections (b) and (e) of sections 8
of the Federal Deposit Insurance Act (12 U.S.C.
1818); or
(ii) subsections (e) and (g) of section 206
of the Federal Credit Union Act (12 U.S.C.
1786).
(B) Judicial review.--A person aggrieved by a final
action under this subsection may obtain judicial review
of such action exclusively as provided, as applicable,
in--
(i) section 8(h) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(h)); or
(ii) section 206(j) of the Federal Credit
Union Act (12 U.S.C. 1786(j)).
(C) Injunction.--The primary Federal payment
stablecoin regulator may, in the discretion of the
regulator, follow the procedures for judicial
enforcement of any effective and outstanding notice or
order issued under this subsection provided, as
applicable, in--
(i) section 8(i)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(i)(1)); or
(ii) section 206(k)(1) of the Federal
Credit Union Act (12 U.S.C. 1786(k)(1)).
(D) Temporary cease-and-desist proceedings.--If the
primary Federal payment stablecoin regulator determines
that a violation or attempted violation of this Act or
an action with respect to which a determination was
made under paragraph (1), (2), or (3), or the
continuation thereof, is likely to cause insolvency or
significant dissipation of assets or earnings of a
permitted payment stablecoin issuer, or is likely to
weaken the condition of the permitted payment
stablecoin issuer or otherwise prejudice the interests
of the customers of the permitted payment stablecoin
issuer prior to the completion of the proceedings
conducted under this paragraph, the primary Federal
payment stablecoin regulator may follow the procedures
provided, as applicable, in--
(i) section 8(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(c)) to issue a
temporary cease-and-desist order; or
(ii) section 206(f) of the Federal Credit
Union Act (12 U.S.C. 1786(f)) to issue a
temporary cease-and-desist order.
(5) Civil money penalties.--
(A) Failure to be approved.--Any person who issues
a payment stablecoin and who is not a permitted payment
stablecoin issuer, 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 outstanding.
(B) First tier.--Except as provided in subparagraph
(A), a permitted payment stablecoin issuer or
institution-affiliated party of such permitted payment
stablecoin issuer that materially violates this Act or
any regulation or order issued under this Act, or that
materially violates any condition imposed in writing by
the primary Federal payment stablecoin regulator in
connection with a written agreement entered into
between the permitted payment stablecoin issuer and the
primary Federal payment stablecoin regulator, shall be
liable for a civil penalty of up to $100,000 for each
day during which the violation continues.
(C) Second tier.--Except as provided in
subparagraph (A), and in addition to the penalties
described under subparagraph (B), a permitted payment
stablecoin issuer or institution-affiliated party of
such permitted payment stablecoin issuer who knowingly
participates in a violation of any provision of this
Act, or any regulation or order issued thereunder, is
liable for a civil penalty of up to an additional
$100,000 for each day during which the violation
continues.
(D) Procedure.--Any penalty imposed under this
paragraph may be assessed and collected by the primary
Federal payment stablecoin regulator pursuant to the
procedures set forth, as applicable, in--
(i) section 8(i)(2) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(i)(2)); or
(ii) section 206(k)(2) of the Federal
Credit Union Act (12 U.S.C. 1786(k)(2)).
(E) Notice and orders after separation from
service.--The resignation, termination of employment or
participation, or separation of an institution-
affiliated party (including a separation caused by the
closing of a permitted payment stablecoin issuer) shall
not affect the jurisdiction and authority of the
primary Federal payment stablecoin regulator to issue
any notice or order and proceed under this subsection
against any such party, if such notice or order is
served before the end of the 6-year period beginning on
the date such party ceased to be an institution-
affiliated party with respect to such permitted payment
stablecoin issuer.
(6) Non-applicability to a state qualified payment
stablecoin issuer.--This subsection shall not apply to a State
qualified payment stablecoin issuer, except as described in
section 7(e).
(c) Sharing of Information.--A State payment stablecoin regulator
and the primary Federal payment stablecoin regulator shall share
information on an ongoing basis with respect to a permitted payment
stablecoin issuer that is a subsidiary of a State-chartered insured
depository institution.
SEC. 7. STATE QUALIFIED PAYMENT STABLECOIN ISSUERS.
(a) In General.--With respect to a State, a State payment
stablecoin regulator shall have supervisory, examination, and
enforcement authority over a State qualified payment stablecoin issuer
of such State.
(b) Authority To Enter Into Agreements.--
(1) In general.--A State payment stablecoin regulator may
enter into a memorandum of understanding with the primary
Federal banking agency and Comptroller setting out the manner
in which the primary Federal banking agency and Comptroller may
participate in the supervision, examination, and enforcement
authority with respect to the State qualified payment
stablecoin issuers of such State.
(2) Rule of construction.--Nothing in this subsection or a
memorandum entered into under this subsection may be construed
to limit the authority of the primary Federal banking agency or
Comptroller under subsection (e) or any other provision of law.
(c) Sharing of Information.--
(1) In general.--A State payment stablecoin regulator and,
as applicable, the Comptroller, the Board, the Corporation, or
the National Credit Union Administration shall share
information on an ongoing basis with respect to each State
qualified payment stablecoin issuer of such State, including a
copy of all initial applications and any accompanying
documents.
(2) Privileges not affected by sharing of information.--The
sharing of information under paragraph (1) shall not be
construed as waiving, destroying, or otherwise affecting any
privilege applicable to such information under Federal or State
law as to any person or entity other than the State payment
stablecoin regulator, the Comptroller, the Board, the
Corporation, and the National Credit Union Administration.
(d) Rulemaking.--A State payment stablecoin regulator may, to the
same extent as the primary Federal payment stablecoin regulators issue
orders and rules under section 4 applicable to a permitted payment
stablecoin issuer that is not a State qualified payment stablecoin
issuer, issue orders and rules related to the requirements under
section 4 applicable to State qualified payment stablecoin issuers.
(e) Back-Up Enforcement Authority.--
(1) By the primary federal banking agency.--
(A) In general.--Subject to subparagraph (C), the
primary Federal banking agency may, after not less than
48 hours prior written notice to any applicable State
payment stablecoin regulator, take an enforcement
action against a State qualified payment stablecoin
issuer that is a subsidiary of an insured depository
institution or an institution-affiliated party thereof
for violations of this Act if--
(i) the applicable State payment stablecoin
regulator has not commenced an enforcement
action to correct such violation; and
(ii) failure to take such action would
create a material risk of loss to holders of
such issuer's stablecoins or create a material
threat to U.S. financial stability.
(B) Rulemaking.--Not later than the end of the 180-
day period beginning on the date of enactment of this
Act, the primary Federal banking agencies shall issue
rules to set forth the standards that would be used by
the primary Federal bank agencies to exercise the back-
up authority under this paragraph.
(C) Back-up authority under section 6(b).--Solely
for purposes of carrying out this paragraph, section
6(b) shall apply to a State qualified payment
stablecoin issuer that is a subsidiary of an insured
depository institution as if the primary Federal
banking agency were the primary Federal payment
stablecoin regulator with respect to the State
qualified payment stablecoin issuer.
(D) Primary federal banking agency defined.--In
this section--
(i) the term ``primary Federal banking
agency'' means--
(I) the appropriate Federal banking
agency; and
(II) the National Credit Union
Administration, in the case of an
insured credit union; and
(ii) the term ``primary Federal banking
agencies'' means the Board, the Comptroller,
the Corporation, and the National Credit Union
Administration.
(2) By the comptroller.--
(A) In general.--Subject to subparagraph (C), the
Comptroller may, after not less than 48 hours prior
written notice to any applicable State payment
stablecoin regulator, take an enforcement action
against a State qualified payment stablecoin issuer
that is a nonbank entity or an institution-affiliated
party thereof for violations of this Act if--
(i) the applicable State payment stablecoin
regulator has not commenced an enforcement
action to correct such violation; and
(ii) failure to take such action would
create a material risk of loss to holders of
such issuer's stablecoins or create a material
threat to U.S. financial stability.
(B) Rulemaking.--Not later than the end of the 180-
day period beginning on the date of enactment of this
Act, the Comptroller shall issue rules to set forth the
standards that would be used by the Comptroller to
exercise the back-up authority under this paragraph.
(C) Back-up authority under section 6(b).--Solely
for purposes of carrying out this paragraph, section
6(b) shall apply to a State qualified payment
stablecoin issuer that is a nonbank entity as if the
Comptroller were the primary Federal payment stablecoin
regulator with respect to the State qualified payment
stablecoin issuer.
(f) Gramm-Leach-Bliley Act.--For purposes of title V of the Gramm-
Leach-Bliley Act (15 U.S.C. 6801 et seq.) a State qualified payment
stablecoin issuer is deemed a financial institution.
(g) Interstate Payment Stablecoin Market.--
(1) Definitions.--For the purposes of this subsection--
(A) the term ``home State'' means the State of a
State qualified payment stablecoin issuer's State
payment stablecoin regulator; and
(B) the term ``host State'' means a State other
than that of the State qualified payment stablecoin
issuer's State payment stablecoin regulator.
(2) Authority to issue payment stablecoins in host
states.--Subject to the requirements of paragraph (3), a State
qualified payment stablecoin issuer may issue payment
stablecoins in a host State without a charter or license to
issue payment stablecoins from such host State.
(3) State obligations.--Where a State qualified payment
stablecoin issuer issues a payment stablecoin in a host State
pursuant to paragraph (2)--
(A) such State qualified payment stablecoin issuer
shall notify any State payment stablecoin regulator in
such host State of the issuer's intention to do
business in the host State no less than 30 days before
such issuer commences business in the host State and in
a manner prescribed by the host State's State payment
stablecoin regulator or State banking regulator if such
State does not have a regime certified under section
4(b), provided that such notice does not impose a de
facto licensure or chartering requirement on such State
qualified payment stablecoin issuer;
(B) such State qualified payment stablecoin issuer
shall comply with all requirements of the issuer's home
State regulatory regime when conducting business in the
host State, and where the host State maintains a
payment stablecoin regulatory regime that is certified
under section 4(b), such issuer shall comply with any
obligations of the host State's payment stablecoin
regulatory regime that exceed those of such issuer's
home State regulatory regime;
(C) where the host State does not maintain a
payment stablecoin regulatory regime that is certified
under section 4(b), such State qualified payment
stablecoin issuer shall remain subject to all
applicable consumer protection laws of such host State;
and
(D) where the host State maintains a payment
stablecoin regulatory regime that is certified under
section 4(b), such State qualified payment stablecoin
issuer shall remain subject to applicable consumer
protection laws of such host State, but only to the
same extent as State qualified payment stablecoin
issuers chartered or licensed in that host State.
SEC. 8. CUSTOMER PROTECTION.
(a) In General.--A person may only engage in the business of
providing custodial or safekeeping services for permitted payment
stablecoins, reserves described in section 4(a)(1)(A), or private keys
of permitted payment stablecoins, if the person--
(1) is subject to--
(A) supervision or regulation by a primary Federal
payment stablecoin regulator or a primary financial
regulatory agency described under subparagraph (B) or
(C) of section 2(12) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (12 U.S.C.
5301(12)); or
(B) supervision by a State bank supervisor, as
defined in section 3 of the Federal Deposit Insurance
Act (12 U.S.C. 1813) or a State credit union
supervisor, as defined in 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) complies with the segregation requirements under
subsections (b), (c), and (d), unless such person complies with
similar requirements as required by the Board, the Comptroller,
the Corporation, the Securities and Exchange Commission, or the
Commodity Futures Trading Commission, as applicable.
(b) Customer Property Requirements.--A person described in
subsection (a) shall--
(1) treat and deal with the payment stablecoins, private
keys, cash, and other property of another person for whom or on
whose behalf the person receives, acquires, or holds payment
stablecoins, private keys, cash, and other property
(hereinafter in this section referred to as the ``customer'')
as belonging to such customer and not as the property of such
person; and
(2) take such steps as are appropriate to protect the
payment stablecoins, private keys, cash, and other property of
a customer from the claims of creditors of the person.
(c) Commingling Prohibited.--
(1) In general.--Payment stablecoins, cash, and other
property of a customer shall be separately accounted for by a
person described in subsection (a) and shall not be commingled
with the funds of the person.
(2) Customer priority.--The claims of a customer with
respect to property of the customer shall have priority over
the claims of a payment stablecoin issuer or any creditor of a
payment stablecoin issuer unless the customer expressly
consents otherwise.
(3) Exception.--Notwithstanding paragraph (1)--
(A) the payment stablecoins, cash, and other
property of a customer may be commingled and deposited
in an omnibus account holding the payment stablecoins,
cash, and other property of more than 1 customer at an
insured depository institution or trust company;
(B) such share of the payment stablecoins, cash,
and other property of the customer that shall be
necessary to transfer, adjust, or settle a transaction
or transfer of assets may be withdrawn and applied to
such purposes, including the payment of commissions,
taxes, storage, and other charges lawfully accruing in
connection with the provision of services by a person
described in subsection (a); and
(C) in accordance with such terms and conditions as
the Board may prescribe by rule, regulation, or order,
any customer payment stablecoin, cash, and other
property described in this subsection may be commingled
and deposited in customer accounts with payment
stablecoins, cash, and other property received by the
person and required by the Board to be separately
accounted for, treated, and dealt with as belonging to
customers.
(d) Regulatory Information.--A person described under subsection
(a) shall submit to the primary Federal payment stablecoin regulator
(or, if the person does not have a primary Federal payment stablecoin
regulator, to the Board) information concerning the person's business
operations and processes to protect customer payment stablecoins, cash,
and other property, in such form and manner as the primary Federal
payment stablecoin regulator (or, if the person does not have a primary
Federal payment stablecoin regulator, the Board) 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. 9. RULE OF CONSTRUCTION.
A digital asset shall not be construed to be a payment stablecoin,
if it is--
(1) redeemable by the issuer exclusively for other digital
assets, provided that such digital assets for which it is
redeemable are not primarily--
(A) payment stablecoins; or
(B) representations of permissible reserves
described under section 4(a)(1)(A) or similar such
assets; or
(2) primarily used within a system controlled by such
digital asset's issuer as a means of accessing products,
services, or loyalty rewards.
SEC. 10. INTEROPERABILITY STANDARDS.
(a) In General.--The primary Federal payment stablecoin regulators,
in consultation with the National Institute of Standards and
Technology, other relevant standard setting organizations, and State
governments--
(1) shall assess compatibility and interoperability
standards for permitted payment stablecoin issuers; and
(2) if necessary, may, pursuant to section 553 of title 5
and in a manner consistent with the National Technology
Transfer and Advancement Act of 1995 (Public Law 104-113),
prescribe standards for payment stablecoin issuers to promote
compatibility and interoperability.
(b) Agreements With Foreign Regulators.--The Secretary of the
Treasury shall seek to enter into agreements with foreign jurisdictions
with comparable payment stablecoin regulatory regimes to facilitate
international transactions and interoperability with any United States
dollar-denominated payment stablecoins issued overseas.
SEC. 11. MORATORIUM ON ENDOGENOUSLY COLLATERALIZED STABLECOINS.
(a) Moratorium.--During the 2-year period beginning on the date of
enactment of this Act, it shall be unlawful to issue an endogenously
collateralized stablecoin not in existence on the date of enactment of
this Act.
(b) Endogenously Collateralized Stablecoin Defined.--In this
section, the term ``endogenously collateralized stablecoin'' means any
digital asset--
(1) in which its issuer 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. 12. STUDIES AND REPORTS.
(a) Study by Treasury.--The Secretary of the Treasury, in
consultation with the Board, the Comptroller, the Corporation, the
National Credit Union Administration, and the Securities and Exchange
Commission, shall carry out a study of non-payment stablecoins,
including decentralized stablecoins.
(b) Report.--Not later than 365 days after the date of the
enactment of this Act, the Secretary shall provide to the Committee on
Financial Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate a report that
contains all findings made in carrying out the study under subsection
(a), including an analysis of--
(1) the categories of non-payment stablecoins, including
the benefits and risks of technological design features;
(2) the participants in non-payment stablecoin
arrangements;
(3) utilization and potential utilization of non-payment
stablecoins;
(4) nature of reserve compositions;
(5) governance structure, including aspects of
decentralization;
(6) nature of public promotion and advertising; and
(7) clarity and availability of consumer notices
disclosures.
SEC. 13. REPORT ON RULEMAKING STATUS.
Not later than 6 months after the date of enactment of this Act,
the primary Federal payment stablecoin regulators shall provide a
status update on the development of the rulemaking under this Act to
the Committee on Financial Services of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs of the Senate.
SEC. 14. AUTHORITY OF BANKING INSTITUTIONS.
(a) Rule of Construction.--Nothing in this Act may be construed to
limit the authority of a depository institution, Federal credit union,
State credit union, or trust company to engage in activities
permissible pursuant to applicable State and Federal law, including--
(1) accepting or receiving deposits and issuing digital
assets that represent deposits;
(2) utilizing a distributed ledger for the books and
records of the entity and to affect intrabank transfers; and
(3) providing custodial services for payment stablecoins,
private keys of payment stablecoins, or reserves backing
payment stablecoins.
(b) Regulatory Review.--The primary Federal payment stablecoin
regulators shall review all existing regulations and guidance and, if
necessary, amend such regulations or guidance or issue new regulations
or guidance to clarify that regulated entities can engage in the
payment stablecoin activities contemplated in, and in accordance with,
this Act.
(c) Treatment of Custody Activities.--The appropriate Federal
banking agency, 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 (the
``entity'')--
(1) to include assets held in custody that are not owned by
the entity as a liability on the financial statement or balance
sheet of the entity, including payment stablecoin custody or
safekeeping activities;
(2) to hold additional regulatory capital against assets in
custody or safekeeping, except as necessary to mitigate against
operational risks inherent with the custody or safekeeping
services, as determined by--
(A) the appropriate Federal banking agency;
(B) the National Credit Union Administration (in
the case of a credit union);
(C) a State bank supervisor (as defined in section
3 of the Federal Deposit Insurance Act (12 U.S.C.
1813)); or
(D) a State credit union supervisor (as defined in
section 6003 of the Anti-Money Laundering Act of 2020
(31 U.S.C. 5311 note));
(3) to recognize a liability for any obligations related to
activities or services performed for digital assets that the
entity does not own if that liability would exceed the expense
recognized in the income statement as a result of the
corresponding obligation.
(d) Depository Institution Defined.--In this section, the term
``depository institution'' has the meaning given that term in section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813).
SEC. 15. AMENDMENTS TO CLARIFY THAT PAYMENT STABLECOINS ARE NOT
SECURITIES.
(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, respectively, in section 2 of the STABLE Act
of 2025.''.
(b) Investment Company Act of 1940.--The Investment Company Act of
1940 is amended--
(1) in section 2(a)(36) (15 U.S.C. 80a-2(a)(36)), 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, respectively, in
section 2 of the STABLE Act of 2025.''; and
(2) in section 3(c) (15 U.S.C. 80a-3(c)), by adding at the
end the following:
``(15) Any permitted payment stablecoin issuer, as such
term is defined in section 2 of the STABLE Act of 2025.''.
(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, respectively, in section 2 of the STABLE Act of 2025.''.
(d) Securities Exchange Act of 1934.--Section 3(a)(10) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended by
adding at the end the following: ``The term `security' does not include
a payment stablecoin issued by a permitted payment stablecoin issuer,
as such terms are defined, respectively, in section 2 of the STABLE Act
of 2025.''.
(e) Securities Investor Protection Act of 1970.--Section 16(14) of
the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll(14)) is
amended by adding at the end the following: ``The term `security' does
not include a payment stablecoin issued by a permitted payment
stablecoin issuer, as such terms are defined, respectively, in section
2 of the STABLE Act of 2025.''.
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