[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1582 Engrossed in Senate (ES)]

<DOC>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
119th CONGRESS
  1st Session
                                S. 1582

_______________________________________________________________________

                                 AN ACT


 
  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 ``Guiding and Establishing National 
Innovation for U.S. Stablecoins Act'' or the ``GENIUS Act''.

SEC. 2. 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
                    (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--
                    (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;
                            (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
                    (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. 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) 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) 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 
        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) 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) 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--
                    (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. 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) 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) 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
                                    (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) 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) publicly disclose the issuer's redemption 
                policy, which shall--
                            (i) 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) 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) 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) 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
                            (ii) 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) 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
                            (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).
                            (iv) 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) 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) maintenance of an effective anti-money 
                        laundering program, which shall include 
                        appropriate risk assessments and designation of 
                        an officer to supervise the program;
                            (ii) retention of appropriate records;
                            (iii) monitoring and reporting of any 
                        suspicious transaction relevant to a possible 
                        violation of law or regulation;
                            (iv) technical capabilities, policies, and 
                        procedures to block, freeze, and reject 
                        specific or impermissible transactions that 
                        violate Federal or State laws, rules, or 
                        regulations;
                            (v) 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) 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 
                        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.
                    (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--
                            (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) 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) 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).
                            (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) 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) 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.
            (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) 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) 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) 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) 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 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) 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) 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) 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) 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) 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, 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) 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 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) 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.--
                    (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) 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) 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.--
                    (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.--
            (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. 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) 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) 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.--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).
            (3) 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) 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 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) 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) 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) 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 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) 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) 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 
        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. 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 
                Bank Secrecy Act and with laws authorizing the 
                imposition of sanctions and implemented by the 
                Secretary of the Treasury.
            (3) 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) 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.
            (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) 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 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 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.--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. 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.--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) 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) 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 circumstances in which the Board may act under 
                this paragraph.
                    (C) 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) 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.--
                    (A) 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) 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) 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 
                                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) 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. ANTI-MONEY LAUNDERING PROTECTIONS.

    (a) Payment Stablecoins Issued by a Foreign Payment Stablecoin 
Issuer.--
            (1) 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) Designation as noncompliant.--Not later than 30 
                days after the Department of the Treasury has 
                identified a foreign payment stablecoin issuer of any 
                payment 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) Publication of Designation; Prohibition on Secondary Trading.--
            (1) 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) 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) 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 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) 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
                    (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. ANTI-MONEY LAUNDERING INNOVATION.

    (a) 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) 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 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) 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 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. 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) 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
            (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) 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 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) 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;
                    (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) 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) 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) 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) 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, 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. INTEROPERABILITY STANDARDS.

    The 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. RULEMAKING.

    (a) 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 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. 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;
            (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. 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. 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.
    (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) 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 
        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. 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.--
            (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). 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 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) 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. Prior to such rescission taking effect, the 
                Secretary of the Treasury shall publish in the Federal 
                Register a justification for the rescission.
                    (B) 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) 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) 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) 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 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) 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) 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) consent to United States jurisdiction relating 
                to the enforcement of this Act.
            (3) Lack of compliance.--
                    (A) 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. Prior to such rescission 
                taking effect, the Comptroller shall publish in the 
                Federal Register a justification for the rescission.
                    (B) 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.
    (d) Reciprocity.--
            (1) 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) 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. 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.

            Passed the Senate June 17, 2025.

            Attest:

                                                             Secretary.
119th CONGRESS

  1st Session

                                S. 1582

_______________________________________________________________________

                                 AN ACT

  To provide for the regulation of payment stablecoins, and for other 
                               purposes.